It is always easier for entrepreneurs to start and run a business when the economy’s in an upturn. Starting an enterprise in a favourable economic climate will less stressful as it is relatively easy to get business plans and credit applications approved. However, businesses go through ups and downs, depending on what happens in the economy. As the Eurozone and the USA readjust and recover, the Singapore economy is also feeling the impact.
‘Tough times don’t last, tough people do’ is a popular and timeless adage that has inspired many to keep the faith and not back down when the going gets tough. Here are some suggestions for startups to steer their ship safely and keep it on course even in choppy waters.
Risk and cost analysis
Carry out an analysis of the risks that your business might have to go through and formulate a plan to mitigate them effectively. Strategize how you will retain your customers in the face of increased competition and how your business will adapt to the ever changing market conditions and global economy.
It is also important to anticipate issues related to capital flow that might crop up in the future. Always keep a track of your spending and be aware of how much money you have, how much is owed to you and how much you owe to others. Additionally, you will also have to ensure that confidential information about your finances and other business plans are adequately protected. If possible, always have a Plan B in store to deal with unpleasant surprises.
Working with the right business model
The right type of business model will help you decipher your market and also help you gain clarity on how you can press for a competitive advantage in today’s economic scenario. This has to be done at a strategic level so you will do well to consult experienced entrepreneurs or engage the services of someone who has designed successful business models. This is going to be a crucial step in determining business success as it covers all the key aspects of activities related to the business including partnerships, revenue and cost structures, and resources, among others.
More often than not, you will be tempted to grab every opportunity that you come across. But don’t fall for such enticements. Stick to the basics and focus on your business model to stay consistent in your approach to your business and delivery of products, services and ideas.
Cut down on unnecessary costs
This is one of the first methods that even large multinationals and corporate giants resort to during a downturn. You will have to be very careful while setting the budget for your business to avoid unnecessary expenses. When it comes to expansion plans, you will need to put it on hold or take it very slowly. Recruitment and investments will need to be looked into or stalled.
Do not fall prey to marketing gimmicks that ask you to deposit your money with them with the promise of doubling it in a very short span of time. Be patient, keep tabs on the market, invest wisely and concentrate on getting rid of your debts.
Network and build relationships
In a foreign land, your internal (employees) as well as external stakeholders can work as your best or worst brand ambassadors. Focus on strengthening your relationship with existing customers and keep your eyes open for new ones.
While you look for new business, don’t forget the relationships with the people who work hard for you. No matter how small your team is, without your employees, you will have no business left to run.
Remember, slow and steady wins the race! Running your business in a tough economy might seem like an uphill task and you might be finding it difficult to be patient in raking in the profits, but always bear in mind that it usually takes a great deal of time and effort to establish a successful business, especially during a downturn.
The Bottom Line
Tough times call for some tough decision making. The key to stay afloat when business is slow is by turning your business challenges into opportunities. You can rest assured that there will be many lessons to be learnt, experiences to be savoured, many interesting people to meet, and insights to be gained. On a positive note, think of it this way – if you can surf along this tide, then success will come easily to you once the tough times wane.
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