The International Monetary Fund recently predicted that because of the “Great Lockdown,” the world would experience the worst economic downturn since the Great Depression. Countries all over the world have been taking drastic measures to “soften the blow” dealt by the COVID-19 crisis.
I vividly remember the last Great Recession. I was a recent law school graduate. The housing market had collapsed and the unemployment rate was nearly ten percent. I began to reflect on the lessons of the last economic downturn and what moves entrepreneurs and business owners can make to survive these trying times.
Below are four practical tips for entrepreneurs to not just survive, but to thrive in the times to come.
TIP #1: MANAGE YOUR EMOTIONS
Business owners are not unfamiliar with the emotional rollercoaster that is running a business. When we feel threatened, our “fight or flight” instinct tends to take over. However, the danger of “survival mode” is that we make short term decisions that have long-term implications. I have had numerous clients come to me hoping that I can fix a bad deal that they made.
In times like these, managing your emotions is half the battle. Thus, it is imperative to practice the discipline of self-care. Prioritize exercise, sleep, nutrition, and relationships. Make time to practice meditation/mindfulness so that you can tune out the “noise” outside.
TIP #2: EAT THE FROG
Mark Twain famously said that “if the first thing you do in the morning is to eat a live frog, it’s best to do it first thing in the morning. And if it’s your job to eat two frogs, it’s best to eat the biggest one first.” This means that if you get the worst part of your day done first, you can go through the rest of the day knowing that the worst is behind you.
Problems rarely, if ever, become better with time. Whether it is a difficult conversation with a lender, a vendor, a customer, or your employees, it is better to do the hard things first and put the “frogs” in the rearview.
TIP #3: PLAY DEFENSE, BUT LOOK FOR OPPORTUNITIES TO GET BACK ON OFFENSE WHEN YOU CAN
In “The Millionaire Booklet,” real estate investor Grant Cardone states that to get rich, you have to spend more time on offense than defense. In a recession, pundits often advise cutting costs and being cautious. While this is true, remember, downturns do not last forever.
Every downturn presents unique opportunities if we keep our eyes open. Remember, the purpose of defense is to provide the chance to go back on offense.
TIP #4: DOUBLE DOWN ON YOUR EFFORTS
In a recession, the first thing most businesses do is cut their sales and marketing budgets. This makes no sense when sales are the lifeblood of a business. In a downturn, the playing field is leveled. As such, it is time to double down on your efforts. Find ways to produce more content and to provide more value. Look for new niches and ways to expand your customer base. Reach out and remarket to existing customers.
“WHEN OTHERS ARE GREEDY, BE FEARFUL. WHEN OTHERS ARE FEARFUL, BE GREEDY.”-Warren Buffett
Recessions are a part of the game. This one is not the first and will not be the last. What matters is that we use this opportunity, as painful as it might be, to become stronger leaders and better entrepreneurs.
The DeVougas Law Group is here to help you take your business to the next level. Contact us for a free fifteen-minute consultation. We are honored to be your true partner and trusted counselors.