Given the global pandemic, businesses have to adapt to the changing times in order to stay afloat. Starting or running a business in a fluctuating economy and unstable market conditions may be challenging, but it may also present opportunities for growth.
Tips to Navigate Business Uncertainty
Business uncertainty refers to situations in which businesses face risks that can’t be foreseen or measured, for instance, the global pandemic.
Although pandemics are uncommon, businesses have always had to deal with uncertainty to a certain extent, particularly new businesses and startups. While there’s no one-size-fits-all approach to dealing with business uncertainty, following these tips below can help you and your team navigate difficult times with more ease.
Develop a dynamic business strategy
A dynamic business strategy helps keep your business on track while allowing you to remain flexible and change directions as necessary.
A huge cause for startup failure is running out of funding, so it’s crucial to monitor your finances. Calculate your burn rate and document your cash flow in order to extend your runway and prepare for when you run out of funds.
To develop a dynamic business plan, use scenario analysis to define a set of possible futures based on anticipated challenges. Then, develop strategies to respond to each scenario.
Prioritize transparent communication
During uncertain times, it’s important to maintain effective and clear communication with your team. Ensure your team is informed on the current state of the business and your plan of action.
It’s equally important to maintain external communication with your customers, stakeholders, and investors so that they’re kept up-to-date. Address their concerns and relay your business strategies to external parties so they can continue to put confidence and trust in your company.
Transparent communication is crucial in building trust among your staff and maintaining positive client relations.
Create a risk management plan
In order to prepare for worst-case scenarios, it’s good to have a risk management plan in place, which can help mitigate consequences when issues arise.
To create a risk management plan, outline all the potential risks facing your business, and measure their level of risk based on likelihood and amount of impact. Then, use one of these four common strategies to respond to the risks:
- Avoid the risk entirely
- Reduce the level of risk by finding ways to minimize the consequences or reduce the probability of a negative outcome
- Accept the risk as a regular business occurrence and proceed with the plan
- Transfer a portion of the risk to an insurance company
A risk management plan prepares you for unexpected circumstances that may arise.
Agility and flexibility are key when it comes to running a business, since it not only helps you to preserve the longevity of your business, but also allows you to seek potential growth opportunities during uncertain times.
In the midst of a shifting business landscape, don’t be afraid to test out new business strategies, whether it’s experimenting with digital marketing platforms, expanding your product offerings, or reaching out to new markets. The feedback you receive may surprise you.
Once you embrace the trial and nature of business, and you may discover opportunities to grow your business.
Support your team
In times of uncertainty, your team needs a strong leader more than ever. Lead your team with empathy by checking up with team members individually and creating a supportive workplace environment.
By building a resilient team, you’ll be able to tackle challenges together and come up with strategies to overcome them.
Additional strategies to combat business uncertainty can be found in the infographic below.
Business risks can’t always be predicted, but if you prioritize communication, flexibility, and transparency, you’ll be better prepared to respond to unexpected situations when they occur.