If you’re like most business owners, your typical day is likely consumed with putting out fires. You’re trying to appease that vocal customer ranting about your product. Payroll’s due at the end of the week, but you have a cash-flow problem. And once again, you’ve missed a deadline for an important client proposal. No matter how hard you work, your business never moves beyond crisis mode. What you need is a tool that’ll end the fire fighting and put you on the path of sustainability. Below are some tips.
The importance of crisis management planning for your business.
In an ideal world, a business would run smoothly without any unwanted interruptions or distractions to its productivity and success. However, in reality, no business is crisis-proof and a business of any size can be susceptible to a crisis or emergency. A crisis is an unexpected and disruptive event or set of events that could potentially damage an organisation’s brand and the associated reputations. Advance planning is key and every company should have a crisis management plan, devised by a communications expert, to minimise the possible fallout. You must tend to your business needs from the foundation up.
Are you familiar with Maslow’s hierarchy of needs? Maslow’s hierarchy of needs is a theory by Abraham Maslow, which puts forward that people are motivated by five basic categories of needs: physiological, safety, love, esteem, and self-actualization.
How does this apply to business? Well, businesses also have a hierarchy of needs. And by understanding this hierarchy, you can make strategic decisions that take you out of crisis mode and retire your fire-fighter role.
Find and fix your biggest business problems to move it forward.
When operating in crisis mode, you feel pressured to fix all your issues at once, from growing sales and recruiting staff to squashing your competition. But this won’t necessarily make your business thrive. In fact, you’ll likely find yourself in even more debt, as you become stretched even thinner. So, resist the urge to act. Rather than trying to do everything at once, take a moment to locate your businesses’ s weakest link.
The importance of cashflow for start-ups.
Keeping a healthy cashflow going is vital to making your business work – but for many small businesses it’s easier said than done! However, cashflow problems can easily result in your business going under. A basic cash flow forecast will help you identify where your business is going to need support, either from your own pocket or from another source of finance. Forecasting is seen by many as educated guesswork, but with some effort you will find evidence to support the numbers you calculate. It’s hard work, but there’s no getting around it!
Reach a state of permanent profitability by reframing how you think about profit.
Profit – the second layer of needs in the pyramid – isn’t just about making money. It’s about creating financial stability, which is crucial if you want to scale your business without being overwhelmed by debt. With additional money up your sleeve, you have a financial buffer to get you through any unexpected changes. This gives both you and your employees the confidence to shift out of survival mode.
Foster a culture of autonomy in your business.
A culture of autonomy can provide your business with many advantages. Gone are the days of micromanaging or babysitting in the workplace (unless you work in a crèche). Employees need to feel respected and trusted while wanting to be left alone to do their work to the best of their ability. This will then allow you to carry on with your workload rather than having to continuously handhold or problem solve.
Your business creates impact by evolving from the purely transactional to transformative.
Transactional businesses inspire no loyalty. Most businesses fall into this category. It’s a purely economic exchange. The official definition of a transaction is “a one-time instance of buying or selling something; a business deal. Transformational businesses create a new identity. At the next level, as a transformational business, you stand for something. A set of principles, a cause, a world view – something that unites people behind a common vision. This impacts both your customers and your employees.
Legacy ensures your vision will live on.
Leaving a legacy means living a legacy. The day-to-day actions of you and your business will be the bricks on which the legacy is built. It starts with a long-term mind-set. Define what matters and make sure that you have long-term visions that match it. That vision will become your business’ guiding light. All decisions, all product development, all marketing campaigns will come back relate back to the vision, which is related to what matters most to your business legacy.
Just like humans, businesses have a Hierarchy of Needs. But this hierarchy is rarely taken into consideration when entrepreneurs seek to move their business forward. Instead, they usually get preoccupied with trying to solve every problem at once, giving them all equal weight. But this doesn’t necessarily lead to progress since the most crucial problem may go undressed. By understanding which issue to prioritize first, entrepreneurs can successfully address their business needs in order of importance.