The formula for Survival of Business in Economic Slowdown
Let us rephrase the old phrase given by Charles Darwin, “Only fittest can survive.” The complete survival story is just perfectly bound by just 4 words. In the upcoming tough era which can be termed as,
“2020: A nightmare for life and Economy.”
Few businesses and industries are going to survive in this era while few are going to suffer a drastic downfall. Few of the industries such as the tourism sector, real estate, automobiles, and airline industry are going to suffer a lot. With all the negative things going around, there are few value-adding business lessons from this lockdown to overcome the economic crisis.
1. Create a contingency plan
Contingency planning means creating a funnel pipeline of backup for the survival of your business. It means that you need to understand the impact which your company going to suffer due to this lockdown. And then start working out ‘Burning Rate’ and ‘Contingency Plans’ for your organization. Burn rate is the rate at which a company is losing money. While contingency planning is like ‘Plan B’ for your organization. For example, Rapido-India’s largest bike app cuts down the salaries of employees in such a way that they can get running time of their business for the next 30 months and they can manage their expenses. This gives them to overcome the crisis effectively. You will need to make certain changes in your business model, your product pricing, the way you operate in the market. The businesses that already had contingency planning with them will cover up this loss early as compared to others.
2. Always keep multiple revenue sources to your business
Having a single revenue source in the economic slowdown is a damaging thing for any organization. Multiple revenue streams make your survival easy and it reduces your dependency on a single factor or source. If your revenue model does not clearly focus on multiple streams of revenue then you need to change your revenue model. Because, following the same business model and revenue model even after knowing that we will be facing loss is like committing suicide. Many of the businesses will get shut down due to this single reason. If you have not developed multiple revenue sources yet then this is time to think and plan and build it.
3. Master the art of innovation, technology and automation
Every business now must have understood the importance of automation and technology in today’s business world. May what your business and industry is, you should have innovative ways to get done with your work with the help of technology. The one who adopted technological shift are the businesses which are comparatively going to cover up all the losses in a better way and as early as possible as compared to others. Adoption of the technology is the foremost important thing to take into the picture for any business. Having a remotely working strategy for maximum possible employees in the company and the most important thing is understanding how to track the performance of your remotely working employee and make your idea turn into execution is possible with the help of adopting latest technological advancement in all aspects of business including sales, marketing, training and development, meetings and discussion, etc. Technology and automation will change the complete face of business after this lockdown.
Every problem always opens up the new opportunities and the one who knows the path between how to identify it to grab it, is the business that is going to be fit for survival.