The last few years have been very crazy for entrepreneurs. Some were going out of business and are just keeping their heads above water while others are really truly thriving out there. Well, some of my clients are having some of their best years ever.
So the business climate out there seems to be getting better, but we're not out of the woods yet. It seems like the governmentand the economist out there keep throwing that “R” word around… Recession, right?
So why do some businesses thrive while others implode during these economic recessions? This remains puzzling to too many business owners and entrepreneurs out there. But I'm here to tell you that not all businesseshave to suffer during a down business cycle.
An overwhelming majority of my clients, as I mentioned, not only survived but thrived as well. In fact, one of my clients likes to introduce me by saying that "If it wasn't for Steve, we'd be out of business."
So what separates these successful businesses from those that sort of failed during economic downtimes? The key is here…They have planned for the future and have contingencies to confront whatever challenges that arise. And really, basically,they had the ability to pivot quickly. This has really been the difference between those who have thrived and those of just barely survived over the past few years.
I believe that what helped my clients the most is for years, we've been taking a step back every 90 days to see how or if they need to pivot, to stay on track to their goals. Then when covid hit, we were doing these pivot reviews on a weekly, or bi-weekly basis and then eventually went to monthly and eventually went back up to quarterly. That really helped them to stay one step ahead of what's happening out there and also their competition as well.
So an economic downturn can be overly challenging and devastating if you don't put it into the proper perspective. In fact, for most business owners today I don't think I've ever really lived through a true recession. If you think about it, the business cycle closely resembles that of the natural cycles of spring, summer, fall, and winter.
I've talked about this many times. Think about it this way, think about a farmer in their spring. He's planting his crops to get ready for harvest and in the summer his crops are growing. And later, he begins to start to harvest the crop. In the fall, he's beginning to prepare for winter awaits ahead.
Let's now compare this analogy to the cycle of business. In the spring, you need to be cultivating business and getting ready for the growth of summer. This is where we're feeling great because we think that our business is doing great. But we also understand that fall and winter are ahead.So we need to plan and start paying down debt or start saving cash for when things actually start to slow down. In the fall is when you need to be able to start getting ready for winter. You have to start looking at where can you cut the fatthat might have sort of grown on or attached itself to your business over those fat summer months.
In the winter, we are in survival mode. We begin to start planning for spring which we know is just around the corner. Also, something to take note of is in the winter, you also need to be able to look for opportunities to grow because it's a fact that during down economic times is when true entrepreneurs begin to really create their wealth. Down economic times are really times in which you can gain market share over our competition. It's a great time to grow through acquisition and start buying up poorly managed competitors.
Currently, we seem to be coming out of an economic winter. A severe one for that matter. And if you didn't prepare, how can you survive and get yourself in a position to take advantage of those next business cycles?
Jack Canfield, in his book Success Principles, has a very simple formula for success that can help us overcome this winter business cycle. It's E + R = O which stands for, Event + our Response = Outcome.
You see, we all have a goal and expected outcome. But some events always seem to just pop up and get in our way and make us lose our focus and invert our attention. That's because our response gets refocused on reacting to the event instead of focusing on what our desired outcome is.
ActionCOACH founder, Brad Sugars, actually outlined five steps on how to focus our attention to look for the opportunities that are available, instead of complaining about how bad the economy is during our downtimes.
The first point is you really have to start with getting your mind straight. If you are focusing on all the negative things, all you will ever see is the negative. So we need to start looking for the positive. Look for the opportunities that are available.
The second step is to set new goals because, during downtimes, the playing field is changed. You need to reassess where your business is and where you want to go. Are your clients' needs to same? Will current goals still realistically get us to our final destination? Or do we need to revise our short-term goals and strategies to make sure we are heading towards our long-term goals?
Lastly, we need to get around the right people. We need to surround ourselves with positive people who share our vision for success. Do you have the right people working for you? Do they have the skills that will help you navigate your business during difficult times? What about even your business associates? Are they bringing you up or are they taking you down?
This leads us to step four which is really important. We need to create quiet time to think of new ideas. It's hard to stay focused during these turbulent times.You need to create a quiet time and a space each day to focus on your goals to help your mind to focus on what you need to do to get there.
The fifth step is planning. It all starts with a plan. When you have a plan, you can determine what you need to do or most importantly, what do you need to learnto be able to achieve those goals?
So you have to ask yourself, did your business survive this far because you just rode the wave of a good economy? Or is it because you have a well-run business?
Now is the time to take action before we get a hit with another economic winter again. If you'd like to learn how to create a plan to recession-proof your business, schedule a free strategy session with me and let's unlock your potential.