Small business owners – how to survive a financial downturn

I am the owner of a small business and I think that I can safely speak for all SMEs in the country that we are very worried about the months ahead. But having been a business entrepreneur for over 20 years and ridden several tumultuous waves, I’m also confident we can get through this if we have a plan, stay agile and make wise decisions. 

At one time, my whole business was based on a financial model that relied on government funding and as soon as there was a change in political leadership at the top, the proverbial rug was pulled from under our feet. Coupled with the 2008 crisis, we’ve braved some challenges at Working Knowledge – but survived. Facing a hard time again, I felt compelled to share what I’ve learned about why some companies will rise phoenix-like from the flames, whilst others crash and burn.

1. Don’t axe your staff – retrain and repurpose

Right now you need to make use of your staff on downtime and turn this to your advantage. Do you have a valued front-of-house receptionist currently twiddling their thumbs at home? Or perhaps some bright and able staff elsewhere in your business who were once client/customer-facing, but now can’t get on with their job? Don’t lose these people – make use of them and give them a new sense of purpose!  

Humans as a species, are incredibly adaptive to new environments and challenges. The same person who once operated your front-of-house could, with a little coaching and training, be re-channelling their efforts to promoting your business online.

2. Be transparent and keep up morale

It’s more important than ever right now for your staff to feel like a team. They all need to have a sense of collective purpose. If you are struggling financially, don’t hide this from your team. They will be wondering anyway so it’s better to be honest and upfront. But of course don’t announce and financial insecurities in an alarmist way. Let them know you have a plan and a positive vision for the future. Let them be part of that plan and ensure they know you value them. 

If your company is new to the home-working model, your staff will need lots of regular positive interactions to feel at ease. Get on skype/zoom and make sure your conversations are effective but not overly clinical, allowing for a modest degree of chit-chat. I’ve been managing 80% of my team remotely for years and I would argue that the bonds are as strong as any team I’ve managed in our central office. There are many positives of home-working and I believe cutting out the exhausting commute and giving my team more flexibility around their daily lives actually results in them being much more energised and focused.

Don’t forget to ask “how are you?”. We need to be social animals more than ever right now so give people a chance to smile, laugh about something trivial and support each other! You’ll have to demonstrate a degree of trust that your staff will get things done. I would advise putting systems in place to track work and keep on top of outputs but avoid micromanaging – no one likes to feel watched.

How about setting up a virtual coffee time for your staff? In fact, why not join me for a virtual coffee?!  https://bit.ly/jameslott_DMA_calendar

3. Don’t stop marketing!

In times of hardship, the first thing often to get axed is the marketing budget. But this, I would argue, is the death knell for many a good company. You will now, more than ever, need to secure sales and keep broadcasting to the world that you can still provide something they need. You may find you need to switch your marketing mix to focus more heavily on digital outputs, but whatever you do DO NOT STOP marketing! 

A slowed economy could actually be used to your advantage – see it as an opportunity to get ahead of the competition. For example, as people panic and unwisely retract their pay per click (PPC) spend on Google, you may find the bidding price for top position reduces giving you a competitive edge. Confused by PPC? Don’t be – we can train you or your staff to be digitally savvy.

4. The new dawn of digital – don’t miss the curve

We are part of a massive global social experiment – can the world work from home? Servers are likely to be strained and virtual conferencing tools may need a bit of upgrading to cope with larger volumes, but ultimately I think we will find that for a lot of people, home working will be the new norm for 2020. As people ease into the home-working mindset, even more people will expect you to sell, communicate and interact online. We’ll see a rise of virtual events and virtual breakfast meetings so make sure you know how to operate in this new world.

5. Be agile

If I had to sum up in one sentence, how to be successful right now it’s this: Be agile. Think about how you can flex your business, tweak your services, turn the way you’ve always done things on its head. Streamline but streamline wisely.

Perhaps if business slows down, this is a perfect moment to “tweak your leaks” – a mantra used by Marketing Guru Bryony Thomas who has devised the Watertight Marketing methodology. In a nutshell, she tells us that we should change our view of the traditional single sales funnel and accept there is actually more than one funnel and in reality they are leaky! We lose customers along the sales journey so we need to fix these ‘leaks’ rather than trying to continually pour more in at the top. I’ve followed her sage advice for my own business and was so convinced by this approach that we now teach it to others via our digital marketing apprenticeship, which is open for staff in businesses who are in need of upskilling. Any age. Any seniority. 

6. Tap into government support 

The Bank of England has again this week urged business owners to use the financial support on offer to small businesses rather than axe their staff. Whilst it makes business sense to do this, it is also imperative to our economy and wellbeing that we keep the wheels turning. If you can, I recommend you keep your staff employed and avoid the temptation to farm work out to remote service providers elsewhere in the world who do not understand your business or your customers. Here’s the support available to you:

1. Upskilling – retrain your staff or yourself in digital marketing and the government will pay 95% of your training costs.
2.  Make use of the 12-month business rates holiday for all retail, hospitality and leisure businesses in England
3. Apply for small business grant funding of ￡10,000 for all business in receipt of small business rate relief or rural rate relief. 
4. Access grant funding of ￡25,000 for retail, hospitality and leisure businesses with property with a rateable value between ￡15,000 and ￡51,000
5. Make use of the Coronavirus Business Interruption Loan Scheme offering loans of up to ￡5 million for SMEs through the British Business Bank. This is available from the week commencing 23rd March. 

Finally, I wish you the best of luck throughout the coming months. My team of digital marketers will be sharing free tips and resources with you all as we navigate this journey together.

Stay safe and stay productive!

James and team HQ