Sustaining a business in a struggling economy

In a struggling economy, the key is to be proactive, innovative and customer-focused to navigate challenges and seize opportunities.

By Valden Findlay.

Lusaka, Aug. 13 – I saw a quote once upon a time which said; “It’s alright even if all you did today is survive.” I think it is the best angle from which I can begin this article. Accepting the realities on the ground.

It is not a secret. Zambia is going through a rough patch right now and entrepreneurs, from large scale to small scale; We are the ones being affected the most. It’s not the first time, especially for me, and it’s not the last time, especially for you. These cycles come about from time to time due to combinations of factors.

However, I would be selfish if I don’t equip you my friends with the understanding and methodologies I have acquired over the years to traverse times such as these.

Also Read: Most painful business failure personally experienced.

The key principle to note is that maintaining a business in a struggling economy requires adaptability and strategic decision-making.

Here are the principles you should focus on:

1. Frugal Management:
Cut unnecessary expenses and optimize resources to improve profitability.

2. Diversification:
Explore new markets, products, or services to reduce dependency on a single revenue stream.

3. Customer Relationships:
Prioritize customer satisfaction and retention to maintain a loyal customer base. It is harder to acquire new customers in difficult times and the few ones are hard fought for.

4. Innovation:
Develop creative solutions to address changing customer needs and stand out from competitors.

5. Agility:
Be quick to adjust your business model and strategies as the economic landscape evolves.

Avoid these pitfalls:

1. Rigid Plans:
Being inflexible can hinder your ability to adapt to market changes.

2. Excessive Debt:
Taking on too much debt can strain your finances in a tough economy. You can’t solve systemic problems with money. Be very careful.

3. Ignoring Data:
Not leveraging data to make informed decisions can lead to poor choices. This includes several clients and how much you make per client, old and new, types of engagement and delay times.

4. Cutting Quality:
Sacrificing product or service quality may harm your reputation and long-term success.

Also Read: How to handle risks, criticism, and negativity in business.

Opportunities:

1. Cost-Effective Marketing:
Leverage digital marketing and social media to reach a wider audience cost-effectively.

2. Acquisitions:
Acquiring distressed assets can lead to expansion and diversification at a lower cost.

3. Affordable Workforce:
Embrace the fact that layoffs may provide you with very skilled labour at affordable rates, you can even take advantage of remote work to reduce overhead costs and attract a wider talent pool. Remember, people are trying to make ends meet so they may accommodate developing products and services for you as a side hustle and you don’t have to cover their full costs.

You should consider these very real existential threats:

1. Decreased Consumer Spending: Economic uncertainty leads to reduced consumer spending. Meaning your clients will naturally evolve to be more cost aware, affecting your cashflows

2. Competitive Pressure:
Rivals might intensify competition to survive, affecting your market share. Study what they are doing carefully and see how you may counter without hurting your venture.

3. Supply Chain Disruptions:

Disruptions can lead to product delays or shortages, impacting customer satisfaction. Be ready for that

Remember, the key is to be proactive, innovative and customer-focused to navigate challenges and seize opportunities. The economy is struggling for everyone. So in essence, it’s just a shifted paradigm. You can win.

To make well-informed and thoughtful decisions, one must be able to see things from perspectives other than one’s own. Gain new perspectives by following Woodpecker’s Digest! Reading does open up a world of possibilities.