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The coronavirus pandemic has created a need for businesses to become more focused than ever on their business expenditures and daily operations. The same can be said for the financial crisis of 2008 — when the economy takes a hit, organizations dial things in. Implementing the right survival strategy allowed many businesses to come out of the recession stronger than they were before. Here’s how they did it:
Focusing more on internal functions during an economic downturn is the key to coming out ahead of the curve as things go back to normal. Companies who had success in 2008 took the time to focus on their balance sheets, reduce their debt, sell off any businesses that were not performing, and put their efforts toward creating operational effectiveness.
The companies who were most resilient during the 2008 financial crisis also reduced their operating costs by at least 1% in order to increase overall cash flow and maintain important client relations.
While these are great ideas to consider as a small business, there still is not an exact blueprint for what companies should be doing right now. How can you plan for business resilience through an unprecedented global event?
Businesses have already started adjusting to keep their businesses running by implementing video conferences and remote work instead of holding in-person meetings. Building a resilient business takes more time and focus, this is how much volatility your business can weather while remaining afloat.
Begin with a business continuity plan. Usually called a disaster recovery plan or crisis management plan that will outline how your company will react to any unforeseen circumstances. These plans typically include a guide to layoffs, furloughs, or termination, as well as operational changes and compensation adjustments.
Businesses should also consider a contingency plan to manage security risks and cyberattacks, along with supply chain disruptions. While these plans likely don’t consider all of the specificities of the COVID-19 pandemic, the basic philosophies and guidance are still relevant.
Another way to build business resilience is to create a business impact analysis. This analysis gives many different ways disruptive events can affect your business operations. This along with a risk assessment will help your business continuity planning immensely.
So far, some businesses have already pivoted their functionality to become more essential in today’s world and have implemented new strategies like curbside delivery and pickup to continue bringing in revenue. As we continue to navigate this unfamiliar territory, the best thing you can do for your business is to make a well-researched plan and adjust as you go. At TGG, we want to help your company come out on top. Contact us for more information on how we can help your company survive and thrive during these times.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
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