Keep your arms and legs inside the car and hold on tight! This ride is not for those with weak stomachs, but if you love excitement and thrills, your ticket will be well worth it. Here are economic rollercoaster tips to help your business make it through to the end of the ride.
Economic cycles are a bit like a rollercoaster ride. The ups and downs are inevitable, whether they’re national, regional or local — but if you hang on tight and expect the unexpected, you’ll be in for a fast, wild and rewarding ride!
Businesses and entire industries can also be cyclical. One season (or year) you’re up, and another you’re down. Hopefully, you’ve had a string of good quarters in between.
The causes of this economic rollercoaster vary. Technology can make a product or service obsolete, an important client can go out of business, or maybe a new and aggressive competitor has moved into your territory. More recently, it may have to do with the global pandemic, which was almost impossible to predict. Even still, companies can prepare a defence for the unexpected.
Prepare for the ride of your life
Regardless of the timing or cause, preparation can mitigate negative effects. Strategic Marketing Consultant Neville Pokroy offers Six Steps To Overcoming The Economic Roller Coaster in his Mastermind Solutions article. Being proactive is one of his most prolific tips.
“If you plan for your next downturn, you’ll be in great shape when it comes,” Pokroy says. “In fact, if you’ve already put plans in place, and are executing those plans, you could prevent the next downturn from coming at all.”
Don’t close your eyes
Within his six steps, Pokroy outlines a customer-building process called AIDA. Even if you’re currently at capacity, he recommends following the steps to keep your sales funnel active.
- Catch their ATTENTION
- Raise their INTEREST with reasons your product or service is what they want
- Create a DESIRE in them to buy from you
- Prompt buying ACTION when they’re ready
The idea is to build up your customer base in advance, and have opportunities at different stages in place. The more customers and prospects you’ve invested time in during good times will provide more cushion for your business during downtimes. If there are personnel changes or cutbacks within some accounts, you’ll have a broader base to make up for the loss.
Stay on the rails
Accenture Strategy’s Warren Parry helps organizations navigate complex organizational change using ground-breaking modelling to understand success and failure — and to learn from it to become more agile and resilient. In his book, Big Change, Best Path, he discusses various ways that companies can make changes to their structure and keep things from falling apart when they steer off course.
In the white paper, Turning Change Upside Down, Accenture Strategy addresses the “inherently messy, chaotic process” of change — whether it’s due to a downturn or an organizational evolution. Parry and his colleague Randy Wandmacher encourage “Fitness for Change,” describing it as “a requirement to be in business – not something you pay attention to only when change comes along.”
“Developing this ‘fitness for change’ is similar to athletes training for a competition. Training in the right way – focusing on specific muscle groups for strength and flexibility, for example – will build up their conditioning, enabling them to withstand greater exertion without any drop in performance.”
When you prepare for change in good times and bad, you steady your business to take advantage of growth when it occurs and to strengthen your staff and loyal customers in the face of difficulties.
Get the fast pass
When businesses are faced with economic challenges, cash flow often becomes a factor. Some businesses will face fading sales revenue and fewer opportunities on the horizon. Others will see expenses rise with inflation, debt coming due, increasing payroll, or inventory issues. No matter what the challenge, owners and CFOs will need to find funding.
The fast pass to funding is often through a lender you’ve worked with before. Many companies will work with their bank, through a traditional loan or line of credit already in place. What if that’s not enough?
Having an alternative lending partner on your side is the ticket. They can provide funding opportunities even if your traditional financial institution cannot release additional funds, or if you don’t qualify for certain types of funding. At Liquid Capital, we work with businesses and their banks to help supplement funding. Through products such as Invoice Factoring, Asset-Based Lending and PO Financing, you can improve your cash flow immediately and limit any further debt. Now that is a fast pass to success!