“There are three constants in life… change, choice and principles”
– Stephen R. Covey
The fast-paced business world requires each and every small business owner to be ready to change, because changes are part of our and our business life. Without an ability to respond to changes well, your business will, more sooner than latter, become obsolete.
A case study: me, myself and my failing business
I did respond to changes on turtle-pace. I feel that my businesses can withstand the “wind of change” – I was proved to be wrong. Part of me enjoys staying inside the comfort zone that is disguised as “status quo” and “proven business model” – The fact is this: There is no such thing as status quo and proven business model in today’s business world.
“Status quo” fails General Motors and “prove business model” fails some promising franchises.
How to build a resilient small business
It is challenging to build a resilient small business – You need to embrace changes so that they are part of your business plan. Here are some tips on how to build one or at least, direct your business to embrace changes better than ever:
- Enhance your mindset
Your business can adapt well to changes if you view changes as inevitable and necessary to grow your business. You can make the mindset changes less painful by seeking mentors, attending seminars and training, and reading books on personal development.
- Always seek new ways to do things better
Things that worked well in the past don’t always stay that way today, let alone in the future. Unless you can evolve well, you should eliminate or liquidate your established but non-performing business units; Although business life cycle will repeat itself somehow, someday, hanging on resource-consuming business units as long as you could is not a good business strategy these days (trust me on this – I’ve done my trials-and-errors so you don’t have to.)
- Lean your business operation and cut your business overheads
Making your business operation lean and mean can help your business to embrace changes easily – This can be done in conservative and radical ways… your choice – One of my favourite non-conservative tips: Send your employees to work at home to cut overheads. Also, you can be environmentally-friendly and cut your business overheads considerably: Throw away your old, non-efficient, copier with new ones; Change your CRT monitors with LCDs; Use air conditioners and ceiling fans combo to cut electricity consumption.
- Better your financial ratios
Conserve your business hard earned cash by taking a long hard look into your small business financial ratios: How’s your liquidity ratios? What about your financial leverage ratios? Your finance people are indispensable – Learn to read your business financial statements, because they indicate the health of your business – Read them just like reading your very own blood test results: Knowing what HDL/LDL or SGOT/SGPT signifies can help you better your health the right way.
- Eye on product development
Sure, selling a delicious coffee bun through establishing a chain of stores can make your extremely wealthy. But the question is, for how long? How can a single product thrive in the midst of changes in competition and economic situation? You’ve got to think and re-think about differentiation, and how it can give your business an edge to keep itself above the competition consistently, days in and days out.
Last but not least: You should know when to quit. When your business turns out not that resilient, you have to get ready to exit, preferably in a way that bring the most of your business. It’s not effective trying to prove your point by hanging on to an ailing business as long as you could. Quitting or divesting is probably the smartest decision you can make for your and your business future.
Of course, Going out of business or bankruptcy is the least desirable exit strategy you might want to employ. In the other hands, selling yours to an entrepreneur who has all the tools to better the business is probably the most desirable exit strategy.
Know your “signs of times” and decide according to them.
Resilient small business
Image by Shayne Kaye.