Keeping your small business profitable can be difficult enough in the best of times. Unexpected events like economic downturns can make it downright impossible. If you want to protect your small business from the unexpected, you need to take action immediately. Making your small business strong and resilient enough to get through an emergency takes time. Fortunately, it doesn’t have to take a lot of money.
Your Employees Are the Key
Big businesses can sail through tough times by relying on massive savings and name recognition. Small businesses do not usually have these options. So instead, you need to maximize the value of the one resource you do have: your employees.
If you want to stay profitable during hard times, your business needs a stellar reputation, and it’s your employees who can give your business that reputation. Your employees are the ones who actually determine what your customers think of your business because they are the ones who interact with them directly. You need your employees to go above and beyond the call of duty for you, not just coast along on minimal effort until they find a job they like better. You need them to give truly excellent customer service. You could need them to do it even after you have had to cut their hours or benefits.
The way to get employees like that is to establish a good and trusting relationship with them. You need to get them to trust you, to feel like you have their backs. The thing that most employees want most of all is a sense of stability. When you prove to your employees they can trust you, they will feel like their jobs are secure, and will even fight to hold onto those jobs when times are tough. If your employees feel like they can’t trust you, like they could lose their jobs at any time, or like their jobs aren’t even worth keeping, they’ll just phone it in while keeping an eye on the job boards.
There are a few things you can do to earn your employees’ trust. The most important is to help your struggling employees do better instead of berating or punishing them. If you show them that you really want them to do better, they will try to do better. When you punish them, they concentrate instead on avoiding future punishments more than on improving their performance. You should also agree to any reasonable requests your employees make, such as time off to deal with a personal emergency. Doing so shows them that you value them and will look out for them. Finally, you should always keep them updated about what’s going on with the company, even if it’s bad news. Doing so can give them a sense of security, of being kept in the loop enough to make plans.
When you prove you will take care of your employees, they will want to take care of you too. When your company is going through hard times, your employees will work hard to help your company succeed because they will feel like they are helping themselves to succeed.
Keep Looking Ahead
Once every couple of months or so, you should try to see the road ahead for your business. Sit down with some of your staff, and maybe your accountant, and talk about what has been happening with the business lately, and what is going to probably happen as a result. Sometimes you should invite non-competing professionals from elsewhere in your industry so you can discuss trends and events that affect your industry as a whole. Spend some time speculating about all of the things that could happen. The purpose of these meetings is to give you the chance to make contingency plans for the things that are probably going to happen and even for some of the ones that are not that likely to happen, but could. These contingency plans will allow you to leap into action when the unexpected happens, instead of needing time to recover and figure out what you’re going to do.
Set Up an Emergency Fund
Most small businesses operate on a pretty tight margin, so one of the most important things you can do to protect your business from the unexpected is to create an emergency fund. You should set up a business savings account that you deposit into every month is ideal. Put some money into it every month no matter how tight the margin you operate on gets. At the very least, you put the change from business purchases into it.
A Final Word
To shield your small business against the unexpected, you need to maximize the resources you possess: your employees, your finances, and your business knowledge. If you develop strong employee relations, keep an emergency fund, and keep looking ahead, your small business should be well shielded against the unexpected.