Pivoting Business Landscapes Efficiently
Plenty of business owners are known to have a high tolerance of risk, usually because they have to, especially when it comes to financial decisions for their businesses. Many business owners are innovators at the same time, which means they not only have to run a business, but they’re willing to try different things to figure out which one works best when breaking into a new market.
However, many business owners also tend to be smart decision makers, as that’s another essential skill when owning a company and having it become successful. When things aren’t going according to plan, business owners need to make difficult decisions if they want to keep their companies afloat, and that’s not always easy to do, or even to predict. That’s precisely what happened throughout the pandemic, as no one expected a virus to take the world by storm and shut down the life everyone used to know.
Fortunately, for business owners that don’t mind challenges and actually enjoy taking risks, the last year has been a great opportunity for both. While not many people liked, or even appreciated the unprecedented disruptions that came around in 2020, for savvy business owners it meant a brand new opportunity for more than growth, experimentation, and change. There were several essential points that made for navigating the new business landscape essentially, which made many businesses shift to survive.
Savings isn’t just important for individual people, because businesses should also have some money put aside for difficult times. That money is what made the difference last year between the businesses that managed to continue operating even at reduced capacities and operations, and those that had to close down a few months into the pandemic. Having savings means the business can be flexible, which was especially important during the pandemic. Even if those savings aren’t too big, at the very least, businesses should have money set aside to cover common disruptions such as replacing a broken piece of equipment. Savings are also important during emergencies where businesses are forced to close down for a period of time – like with the pandemic.
When business owners first create business plans, they also have to consider potential negative scenarios to develop better financial plans. Although many business owners believe that planning out negative situations and what to do during those times can be put off for later, no one really knows how much time there is before something bad ends up happening. Both big and small situations should be looked over, and the company should have a plan in place for what to do during those difficult or unprecedented times. Companies that had a plan in place for potential months-long closures managed to navigate the pandemic better than those who didn’t.
Finally, business owners or companies that don’t have a decent amount in savings should, instead, establish positive relationships with a bank or two. This way, they’ll be able to have access to funds which is a positive during difficult times. It doesn’t really matter if the funds are a line of credit or a loan from the bank, as long as it’s an available option. During the pandemic, the companies that had stronger relationships to banks actually had their applications for PPP loans approved at a faster rate according to the National Bureau of Economic Research.