HOW TO SURVIVE
DURING PERIOD OF CRISIS 💪
In the recent weeks, we have experienced something that has not been seen for decades. The crisis brought by the coronavirus has not only taken away many lives, but it has also close down many businesses.
In this article, we are going to provide you with a brief summary of some actions that you could take in order to diminish your probability of going bankrupt during a financial crisis.
FOCUS ON YOUR CORE ACTIVITIES 🔥
One of the main mantra of businesses nowadays is diversification. Companies tend to diversify their activities as they are told that diversification is key, and is only by expanding your business in different segments that you will be able to reduce risk and grow in the long run. However, this is not always the case. Indeed, during a period of recession it is important to cut all the non-core activities of a business, and focus only on performing the key activities that bring the highest revenue.
This may not be difficult for a large number of business that focus only on one specific task. However, it may be more problematic for larger firms that started to diversify their activities in order to reduce risks and expand. However, in periods of economic difficulties one of the most effective ways in order to survive is to cut one of your arms/limbs, so that the rest of the body can survive and continue to function.
OPTIMIZE YOUR OPERATIONS AND REDUCE WORKFORCE 🔋
Even if this may seem as a simplistic option, being able to optimize your processes is fundament in order to survive during difficult times. The ability of the companies to use their resources more efficiently can mean the difference between closing down and surviving. You can try to see this current situation as an opportunity for you to learn how to optimize your resources and achieve the greatest results using your limited budget.
Sometimes, companies need to undertake some drastic measures like reducing the workforce or adapting it to the current conditions of the market. This may imply changing the workers from fulltime to part-time, reduce their salaries or relying on some subsidies provided by the governments
TAKE ADVANTAGE EXTERNAL SOURCE OF FINANCING IF NEEDED, BUT REFRAIN FROM OVER USING THEM ↗️
One of the most popular ways to survive is by relying on external sources of capital, such as loans and other specific forms of debt. Especially during these period of economic crisis, governments tend to help out their companies by offering loans with special condition that allow firms to raise new capital at a low interest rate. However, as appealing as it may seem, companies need to be careful when deciding if to rely on this external source of financing. Indeed, it is important to carefully examine the current financial situation of your firm, and subsequently decide if you would benefit from taking on this new debt. In fact, while receiving cash may seem as a good strategy, numerous firms have done the mistake of excessively increasing their level of debt. This made them unable to pay their dues, thereby leading to their bankruptcy
TRACK YOUR PROGRESS AND LOOK FOR THE LIGHT AT THE END OF THE TUNNEL ✨
Lastly, it is important that you remain focus throughout this negative period and understand what are the key activities you need to carry out and how to perform them in the most efficient way. Creating a report where you track your progresses may help you in doing this and it will also allow you remain focus on the core part of your business.
By following these guidelines, will hopefully be able to survive during a period of economic uncertainty. Do not let fear take over you, focus on yourself and on your business and know that there is always a light at the end of the tunnel, and this negative period that seems infinite will soon pass and new opportunities will arise! Keep up!