5 Tips For Your Firm To Survive Economic Uncertainty

blocks showing the word risk and how to be ready for anything

Coronavirus is what’s sometimes referred to as a “black swan event” – something that suddenly and drastically affects the economy, characterized, in part, by its unpredictability and rarity. Your firm will need to take steps to survive. Each company will differ in exactly which steps to take, but the five tips provided below should help any firm, regardless of industry:

Be Honest

Is there a chance employees will lose their jobs? Do you suspect your business may need to close for weeks, or even months? Are you going to have to discontinue some products or services, or raise prices? Let your stakeholders know. Honesty is bracing. Prepare for the worst, hope for the best, and be clear-eyed.

Think Small

In times of uncertainty, it’s a good idea to plan in relatively short steps. Easy wins are incredibly important for morale. With a constantly shifting market coupled with ever-changing government regulations, it’s important to avoid planning too far ahead. Banking on things going your way months in the future isn’t as realistic as it once was. Adapt your business plan for what’s happening right now, and stay flexible with your goals and metrics.

Short, Medium, and Long-Term Thinking

In the short-term, evaluate whether or not your firm should be focused on cash preservation or expansion. The latter is an unlikely option for most firms, but if you’ve been conservative with your cash in the past, you might find opportunities to expand at a lower cost. Keep in mind, however, that your customer base is almost certainly going to recede for the foreseeable future (depending on your industry).

In the medium-term, you want to focus on getting back to growth; this may only occur within about a year or two, once vaccines are readily accessible. Don’t put too many chips on a medium-term solution – things are still very up in the air.

Long-term planning is still important, though it may take a back seat. Continue to make optimistic, normal, and pessimistic estimates of cash flow and other metrics for years down the line.

Constant Communication

Keep in contact with your clients, through social media, e-blasts, or any other method you feel is acceptable. Keep them aware of any changes, thank them for their patronage, and tell them how things are going. Do the same with your team. Have regular meetings – via video conference, if necessary. Try to avoid making these meetings all about business; invite your team to join you for social games online, an at-home happy hour, or any other event you think might brighten their day.

Stay Positive

In every challenge, there’s a learning experience. Black swan events don’t happen every day, and when your firm comes through the other end, you’ll be stronger and wiser. Write down what you’ve learned as a result of this pandemic, try to imagine what the long-term future might look like. Stay adaptable, stay focused. You can do this.

Looking for advice on how to handle your finances during the pandemic? Talk to a CPA in Winnipeg.