4 Steps to Surviving an Economic Storm

The economic crisis of 2008-09 caused massive damage to a large portion of the population, but the COVID-19 crisis exempts no one. Each of us is being impacted in some way. Working amidst a pandemic has become our new normal, for now, and the adjustments we make to adapt to these challenges are not likely to be short-term.

For business owners, it is a test of character and leadership; we find out a lot about people, and ourselves, in a crisis. As threats come and go, some bigger and more complex than others, like those we are going through now — leadership skills are sifted and refined. This is when the most growth takes place.

We can’t control when these “storms” come, but what we can do is prepare for them. While some business took the time to prepare for the current storm, many others did not and are likely suffering the consequences. But regardless of your current state of affairs, it is a season of reflection, resolution and action as we look toward the next season of “normal,” whatever that turns out to be.

Consider these four actions in response to an economic storm:

1. Assess
   • It takes discipline to stop and carefully study a stressful situation when everything seems to be shouting “Do something quickly!” To make the best long-term decisions, requires first knowing as much as possible about what is going on.
   • Where are we right now? Where do we need to be (breakeven revenue or available cash)? What are our core capabilities and how can we leverage them to create alternate revenue streams? What are our constraints or limiting factors? How can we pivot and overcome them?
   • Make a list of your answers and take them to your team for feedback and suggestions. It's often surprising how insight like this can change the whole picture and instantly relieve stress.
2. Possess
   • Take ownership of the current reality. Problems don’t solve themselves and we cannot simply wish them away. Leaders must possess ownership of that principle along with a couple of additional key factors:
     
     • Numbers. Know them and own them. At the very least, know how to calculate your break even revenue and how to manage that number.
     • Creative dissatisfaction. Practice the art of contempt for failure.
3. Test
   • Find out what you don’t know. Beyond speaking with your own staff and close associations, reach out to new people or industry colleagues you don’t know very well. Sharing insights with each other could prove to be a game changer. You can also turn to your customers to see things from a reverse perspective. The intellectual capital of others is often yours for the taking if you just ask.
   • Another great strategy is to ask yourself “What would have to be true?” to develop a new revenue stream, or modify an existing one. Then, systematically test it via market surveys or conduct small-scale trials to gauge a new tactic’s long-term viability. Some examples might include:
     
     • Engaging in new strategic partnerships with other builders, designers, remodelers, architects, commercial construction, insurance companies, etc.
     • Adopting or modifying service contracts
     • Implementing creative discounting, contests, giveaways or other incentives
     • Incorporating contingency contracts, delayed starts, deferred or reimbursed financing costs
4. Transcend
   • Survival is an action word. Your future success will be a direct reflection of the actions you are taking today. Get your team involved today (if they aren’t already) and set clear goals with actionable steps and deadlines.
   • Those who survive and thrive will be those who choose to lead with creative and constructive determination, undaunted by the unknown.

Fred Reikowsky is a certified professional business coach and principal of Legacy Business Leaders LLC. He has more than 30 years of experience as a business owner in the residential construction industry, and has led numerous educational presentations at the NAHB International Builders.