As we spring forward into a new season of opportunity, business owners are still experiencing pressures of an uncertain economy. Resiliency is the name of the game, but what are the business rules that apply when dealing with great disruption and prolonged uncertainty? With recent bank failures we see that volatility will continue. Traditional guidance would instruct business owners to focus on cost cutting and preserving cash and while this is sage advice to extend cashflow runways, it does not create a sustainable position for most small and mid-sized businesses. What is needed is new revenue and a path to new revenue is to build a new business.
Cash is oxygen for business and with more conservative lending and investing, business owners have to rely on new and growing customer relationships to ensure viability. Business building can be your critical path to surviving and thriving while everyone braces for a rough economic ride. While others contract their businesses, what if you diversified and expanded?
As an existing business you have some advantages over brand new companies. You have customers, talent, a sense of urgency and an established brand. Your new business will not have legacy costs and thus can yield higher profit margins and be less susceptible to cash flow pressures. You already have established customer relationships so you can bring a new business to market faster and cost effectively and you may be diversifying away from inflationary exposures. Finding pockets of new revenue opportunities within your business can be critical to survival and growth but it won’t happen if you are too narrowly focused on cost.
Making business building a habit can result in greater resilience and a stronger, more financially stable business in the long run. Having a creative mindset will be important to seeing the opportunities that are right in front of you. If you can ignite internal entrepreneurship at your company you can catalyze your team to amplify a growth mindset. Creating new and innovative offerings for your clients, or bringing your existing products and services to new markets can do wonders for the mental health of your team as well. The energy of business building can inspire teamwork and foster corporate resilience much more than cost cutting measures that most often negatively impact employee morale.
Asking ‘what if’ in an uncertain economy
Don’t let these tough times be an excuse to stop innovation. Create optionality to grow now. Business building helped companies weather pandemic disruptions and kept revenues from shrinking as compared to companies that focused on cost cutting measures. Activate a creative mindset by asking ‘what if?’
- What if we launched a new product?
- What if we added a new market?
- What if we could relaunch all over again?
- What would we do differently?
- What if we created more options for new client solutions?
- What if we sold adjacent products to our existing clients?
- What if we joined forces with another business to launch a new business?
- What if we created valuable new products for our favorite customers?
- What if we became our own suppliers?
- What if we created a more eco-friendly offering?
- What if we broke down our end-to-end solution into separate smaller and more affordable solutions?
What if….
Committing to build new businesses can be a risky endeavour but a sense of urgency is great fuel for inspired energy and the successes of tomorrow will stem from the ideas that are seeded today. Mitigate risks by ensuring you have a financial co-pilot helping you plot your refreshed strategic roadmap and recalibrating as required. A new business requires a hipster, hacker and a hustler, but a sustainable business needs a numbercruncher in there too.
