My counter-intuitive advice for surviving a financial crisis

They spread tarpaulin over openings and then placed wooden strips – called battens – on top of the coverings, to stop them blowing off.

This measure was known as “battening down the hatches.”

And colloquially, it’s come to mean turning away from the world and acting defensively, until the danger has passed.

Today I’m worried that businesses will take this approach in order to survive the financial crisis.

What we’re facing right now is increasingly serious and for many individuals and businesses, it’s becoming very frightening.

The temptation is to look at your business and shrink it, by cutting expenses, cutting staff, cutting services…

Or alternately, to play it incredibly safe, spending nothing and taking no major initiatives for the time being.

I understand this drive, because the atmosphere is one of doom, gloom and panic. It’s only natural that business owners want to tread cautiously until we’re on safer economic ground.

But it’s a mistake.

If your business stands still, you’ll go backwards. You can’t afford to cut, cut, cut, because that takes away your ability to deliver better services, and bring on new clients. You can’t be resilient when you’re on a downwards spiral. On the contrary, you’ll enter a death spiral.

That’s why, despite everything, you can’t lose your ambition! You need to continue thinking about ways to grow and develop your business.

Growth will be harder than in the past, but adverse situations also generate opportunities.

For example, some of your competitors may be struggling – is there an opportunity to acquire them? Markets change under these conditions – has this created a new set of buyers? Are there opportunities for you to introduce a new service?

Think of how you can pivot, if necessary. Businesses showed remarkable initiative and innovation during COVID, and the same may be called for now.

Now, I know what you might be thinking…

“Garry, you’re contradicting yourself! Over your past few blogs, you’ve urged business owners to take this crisis seriously, to be cautious, to prepare for the worst case scenario…

“Well, which is it? Hold our horses, or full steam ahead? Make up your mind!”

But it’s not a contradiction. Just like a football team plays both offence and defence at the same time, you need to do both concurrently, both planning for the worst and thinking innovatively about how to grow.

And it’s about balance. You need to make your business more efficient right now, not strangle it. Subtle difference…

To get back to the maritime metaphors, adjust your sails rather than return to port until the storm passes. And definitely don’t batten down the hatches.

Here at Insight Associates, we can help you do all this in a financially responsible way…

…So that the decisions you make about your future are based on real financial data, not gut feeling…

…So you understand the financial implications of your decisions…

…And so you can chart the next phase of your business with complete confidence, no matter how choppy the waters.

-> Click here to find out more about how we can professionalise your financial management.

Then hit ‘reply’ to this blog, or call us on 01279 647 447 to arrange a no-obligation chat about how we can work together. I’ll get right back to you.

Warmly,

Garry