Entrepreneurs will undoubtedly face obstacles on their path to success. As Adam Ferrari explains, it’s best to assume that problems will indeed arise at some point, and being prepared to handle those problems is crucial.
A critical skill that most entrepreneurs overlook is crisis management. The tools and abilities an entrepreneur can employ when a crisis arises — whether it comes on via internal forces, external forces, or both — will often determine whether the business will survive.
Here are some tips that will help any entrepreneur keep challenging situations under control.
Have a Solid Emergency Fund
Building a solid emergency fund is a good piece of financial advice that entrepreneurs should follow — both for their In business, it’s equally important to have a rainy day fund if an emergency comes along. You won’t have to dip into cash to pay for ordinary expenses when you have this money set aside.
This can prove crucial during a crisis, as many business owners found out at the start of the COVID-19 pandemic. Unfortunately, those businesses that didn’t have extra cash on hand were some of the first to be forced to close shop.
Business and personal finances are often intertwined for entrepreneurs, too. Keep in mind that if a crisis hits in the business, you may have to forego a paycheck for a while to keep it afloat. Likewise, if you don’t have your own personal emergency fund, you could suffer professionally and personally.
Make Objective Decisions
During a crisis, it can be easy to make emotional decisions. That, however, is perhaps the worst approach you can take.
All of your decisions in crisis time should be based on getting through the crisis. In other words, the moves you make should seek to get as close as possible to your break-even numbers every week. But, of course, this is a drastically different approach than is necessary when times are good, as you’re often looking to maximize profit.
If you don’t even understand what your break-even is, though, it’s going to be impossible to run your business with that in mind. That’s why you should prepare now so you know everything there is to know about your company’s data and hard numbers.
Pivot If Needed
One approach that often doesn’t work during a crisis is remaining stagnant. Instead, entrepreneurs need to be creative to stay ahead of the curve at all times, especially during challenging times. This may also require you to pivot, if necessary, to adjust to the times.
The COVID-19 pandemic is the perfect example of this. Most businesses needed to adjust to a virtual work environment. Some — like restaurants and grocery stores — focused on delivery services they may not have offered before then.
Sometimes, the pivots you make during crisis times could end up being huge profit makers for your company even after the crisis is over.
Don’t Give Up
No matter how bad it gets, you must never give up during a crisis no matter how bad it gets. Instead, as Adam Ferrari explains, entrepreneurs must be as dedicated — if not more so — during times of crisis as they were when they first started the business.
The passion, energy, excitement, and dedication entrepreneurs can display during a crisis can help weather any storm if the approach is right.