It's an understatement to say that businesses suffered
immense losses during the global pandemic. Enterprises worldwide had to shut
down operations because of the drought in their revenue streams.
However, the few that continue operations post-pandemic face
another challenge: recovery. Coming back from drained financial accounts is
tough, and it will take time to rebuild your business to what it was. But as
you keep going, you'll slowly begin to taste the sweetness of stability again.
This article talks about the actions you should take during
the bitter moments of recovery. You'll learn how to make it more manageable and
help you get back on your feet faster.
9 Things Your Business Can Do to Recover From a Loss
Coming back from a loss is easier said than done. But if you
take it a day, week, and month at a time, you'll be surprised at how far your
business will have come.
1. Assess where things went wrong
How much have you lost? What contributed the most to your
losses? Assessment is the time to pour through all your accounting documents to
paint a clear picture of your current financial standing. Look through your
cash flow statements and balance sheets. Review your expenses.
Assessing where things went wrong establishes how far you
are from your goal and what steps you should focus on to reach your goals.
2. Seriously rethink your spending
Recovering from a loss is a matter of your company's
survival. It's why you may need to take drastic action, especially regarding
your finances. Once you've understood your past expenses and identified where
you might've overspent, it's time to make adjustments and ensure you only spend
on necessities.
A new approach to your company's spending can start in many
ways. For example, you can talk to creditors to renegotiate the terms of loans.
Refinancing loans often come up in financial circles to pay down debts. It's
also an option to consolidate your debts to streamline repayments.
What's important is that you're finding ways to alleviate
immediate financial burdens. A double take on your spending gives you a vantage
point to see other strategic maneuvers you can pull to get out of your
financial hole.
3. Scatter your risk
One of the pandemic's effects on businesses is the revelation of how brittle operations are. No
one considered in-person arrangements or traffic fragile until the government
imposed social distancing protocols.
It's even more important to diversify what your business
offers and how you operate to create a safety net against future losses.
For example, consider expanding your product line to include
items you can manufacture elsewhere or for cheaper. Services you can perform
remotely also hedge against unexpected physical constraints. The less reliant
you are on a sole revenue stream, the better prepared you'll be to overcome
unexpected events.
4. Engage with loyal customers
Recovery is easier if your customers remain loyal to you.
Since cash is the lifeblood of any thriving organization, you must prioritize
engaging with paying customers.
Place a greater emphasis on building strong relationships,
especially with customers with the highest value. They just might be able to
keep your business afloat for now.
What does engaging your customers look like? It can mean
personalizing your marketing even more. It can also mean improving your loyalty
program. Simply asking customers what they want from you is an excellent place
to start. Their feedback will guide you toward what initiatives to tackle
first.
5. Cut wasteful systems
When recovering from a loss, efficiency is imperative. You
can't afford systems with no returns.
Evaluate your current processes to look for areas to
optimize further. It could involve automating tasks to allow employees more
time to focus on critical operations. You may also need to invest in
productivity software to help align the team better. It's a worthwhile
investment if it enhances performance.
6. Let the market know you're still here
Strategic marketing and branding reignite interest in your
business. You'll need that if you want your revenue to start climbing again.
The travel sector was among the most impacted by the
pandemic. Everyone was immobile, and planes were grounded for the time being.
What did many travel agencies do? They ran campaigns showcasing dream
destinations travelers could visit once things eased up. This approach kept a
line of customers waiting for their doors to reopen.
A similar option would be to rebrand or pivot your
strategies. It refreshes your image and establishes a new chapter in your
brand's life.
7. Team up with other businesses
You don't have to recover from losses alone. A partnership
can be a win-win situation. For example, if you're a gym owner, a health food
store brand as a partner could elevate both businesses and enhance your
advocacies for a healthier future.
The key is to find a business that complements yours. What
else would your customers need if they were paying for your business? What
pairs well with your products?
Collaborating with another brand can also mean sharing your
resources, depending on your agreement. You can tap into their customer base
while they tap into yours, growing your potential sales simultaneously.
8. Nurture your employees
Your employees are your business' backbone. Their combined
performance dictates how soon you recover. Nurture them and show how much you
value their efforts. You can do this in many ways.
Be transparent with your communications. Let them know what
you're up to and what they can look forward to. Moreover, it's also a great
idea to take their opinions before you settle on a decision. These practices
involve your employees, giving them a sense of ownership over their role and
the company itself. That sense motivates them to work harder and innovate more.
9. Seek guidance from experts
During recovery, seeking expert advice can be a
game-changer. Consult legal and financial professionals who can provide
insights tailored to your situation. They can help you navigate complex
regulations, negotiate contracts, and optimize financial strategies,
safeguarding your business's recovery trajectory.
To illustrate, suppose a small law firm is recovering from
financial setbacks. It could hire a financial consultant to reevaluate billing
structures and implement cost-saving measures, ensuring long-term
sustainability.
Case Studies and Success Stories
It's easier to understand the impact of strategies when you
have examples to follow. The businesses below show that climbing out of losses
is possible”and can be a turning point.
Apple
Before Apple was the tech behemoth it was today, it was
fighting for market share with IBM and Microsoft in the late 20th century. They
suffered a significant loss when Steve Jobs was fired in 1985. The cultural
innovations Apple became known for today left with him.
Once Jobs returned, the company was on the rise again. They
focused on delivering new value to customers and the industry. Although
groundbreaking products such as the iPod and iPhone are rare, they shouldn't
stop you from entertaining bold new ideas to shake up the competition.
Kodak
For years before the 2000s, Kodak was the top-of-mind brand
whenever people talked about photography. But cameras became thinner, lighter,
and more advanced; the brand knew they were in trouble.
Instead of succumbing
to the digital revolution, Kodak pivoted strategies. Instead of cameras being
its key driver, the business focused on developing imaging technology. While
the brand might no longer be the dominant force it once was, it still escaped
long-term bankruptcy.
Starbucks
The sales of this coffee giant weren't always so energizing.
It suffered immense losses during the 2008 financial crisis, similar to many
other companies worldwide. When CEO Howard Schultz returned, he made difficult
decisions to save the company. This included closing branches and rethinking
their online marketing strategies.
The efforts worked. This underscores the importance of
returning to the drawing board, finding better ways to optimize your processes,
and rethinking your spending and marketing.
Fight for Your Renaissance
As painful as losses are, they can mark an important moment
in your business' timeline. You'll likely be an even tighter and more resilient
company once you've climbed out of it. Immense loss can lead to immense growth
if you persevere.
It's a matter of taking it a day at a time, a step at a
time. Your first step should be assessing the damage. Take another look at how
your business spends money and prioritize essential functions. The weaknesses
you find are growth opportunities. Your books can also show you the trends in
your past finances and the impact of your losses, which will direct your next
steps.
You don't have to be alone on your path to recovery. Find
businesses to partner with to leverage each other's resources and help you
climb faster. It won't only help you recover, but it can also forge a lasting
relationship that benefits you even after you're out of the storm.
Now isn't a time to wait for miracles. It's necessary to be
proactive with your business' recovery. Whether restructuring your finances or
diversifying your offers to mitigate risk, develop a bias for action. Every
step is a learning opportunity and gets you closer to freedom and stability.
