Six Steps to Surviving an Economic Crisis
The Dominican Republic has faced three financial crises, one in 2003, one in 2006 and the current slowdown. These economic crises, while unfortunate, have given me a lot to think about in terms of how I run my auto-detailing business. As an entrepreneur, it is not my ability to predict the future that helps me survive, but my ability to plan for it when it arrives. Here are six simple steps I’ve adopted to survive these tough times:
Return to the Beginning
In the face of industry troubles, I try to always remember what made me great. Business ideas usually start from a lack or a necessity; returning to that moment when it all began reminds me that I am in this business to satisfy a need. Looking back at my progress also gives me the confidence I need to overcome any challenges. I remember how tough it was in the beginning, so I use the experience and lessons learned to move forward and succeed.
Adjust to Customers’ Needs
In the face of adversity, creating customer loyalty is paramount. This requires a successful measure of efficiency. To survive in my industry, knowing the problems customers are facing and being prepared to offer solutions is essential. This implies listening to customers more frequently and becoming a more adament problem solver. In times of economic upheaval, auto-detailing firms need to provide added value in order to help customers solve their needs within their budgetary constraints.
Amidst a financial crisis, it is typical for employees to be unmotivated. With budgetary constraints rising, personnel reductions taking place and job responsibilities increasing as a result of layoffs, it’s easy for employees to lose hope. I have found that these times are critical for the employees, and they require special attention from management to help them through. The more I understand my employees, the more I can help them stay focused on the tasks at hand.
Maintain Quality of Service
An unhappy employee leads to poor service and results in unsatisfied customers. If cost reduction is eminent, then it must be properly structured to avoid compromising the quality of customer service. Also, I must avoid focusing solely on the financial part of my business and consider the humanitarian aspects, as well. By organizing my business around an employee-friendly environment, I can structure my business to anticipate the hard times and guarantee quality service.
The Power of Planning
Planning is essential in any organization. For instance, in my industry, higher oil prices raise the price of chemicals, a vital part of my business. Even though it is difficult to anticipate the exact price of oil next year, it is possible to channel our expenses in such a way that we can save and invest to mitigate this risk and diversify.
In other words, I make sure I have a reserve fund in place for the tough times. Also, dividing my expenses based on the necessity to maintain an ongoing business can facilitate the decision-making process and direct me more efficiently in moments of crisis.
Monitor the Financial Leverage
It’s no surprise that there are negative consequences of poorly managed financial leverage, especially during a financial crisis.
Extremely leveraged businesses have a higher risk of collapsing; however, I have discovered that leverage can sometimes be an advantage. It can increase shareholders’ return on their investment.
As such, leverage should not be entirely avoided, but carefully considered and monitored once acquired.