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.
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.
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.
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.