Forget About Bouncing Back—Bounce Forward!

A pandemic viral infection stalking the earth is not the only beast that can give any business a deadly wallop. An aggressive competitor, economic instability, technological advances that makes your biggest product obsolete, or the bankruptcy of an important client can take a business under like a riptide.

It’s a scary moment and no business is immune to a set-back. How can the business founders or leaders right the ship and head for calmer waters? Let’s take a couple of deep cleansing breaths, tap into your storehouse of resilience and figure out how to not just bounce back from business troubles, but bounce forward and stage a re-entry on higher ground.

When the realization sets in that the business is in a perhaps irreversible tailspin, the most common emotions the business founders/ leaders will ordinarily feel are fear and panic, followed closely by sadness and feeling like a failure. The enterprise that once made them so proud has been wrenched away. The body and soul ache.

You are encouraged to own your feelings. Denial, as revealed by a “take it in stride, carry on as usual” attitude is not recommended, but it is inadvisable to wallow in sorrow for an extended period. Recovery, personal and professional, lie in a rational examination of what went wrong and an informed decision about what to do next.

Start with SWOT

The old chestnut strategic planning technique that was first popularized in the early 1970s is still relevant today. Use SWOT to tally and measure the value of resources available to the company, assess current and projected business conditions and decide how to rebuild. A well-chosen and executed pivot or strengthening of the original business model, perhaps with the addition of an untapped niche market or infusion of capital, may be the healing recipe.

Strengths are valuable resources that can be leveraged—-still popular products or services; skills held by the founder and team members; the company brand/ reputation; strategic relationships; the client list; the email list; well-developed social media networks; cash reserves. Bundle the right set of strengths and propel your enterprise toward a profitable bounce forward.

Weaknesses are gaps and shortcomings that put the company at a disadvantage relative to competitors. Some organizational weaknesses cannot be eliminated because attempting to do so would not be practical. Instead, do what is possible in the near term to shore up, minimize, spin, or work around them. Primarily, it’s important to honestly and fully take stock of and plan around what has the potential to derail a forward bounce.

Opportunities are developments or circumstances in the environment that the company may be able to use to its advantage. Pursuing an opportunity is an offensive strategy that facilitates a bounce forward. However, one may search the horizon and find not a single lifeboat in sight. It may be necessary to pause and figure out how to create an opportunity, or wait for one to arrive.

While in limbo, finding a part-time j.o.b. may be the stopgap solution you need. I’ve been there and can testify that the strategy can aid a bounce forward. Search for a low-visibility gig that offers a desirable benefit in addition to money (which is probably inadequate). The idea is to get paid to discover and learn something that can contribute to the relaunch of the business and your professional life.

At my low-paid, part-time j.o.b., I eventually realized that my public speaking skills were greatly improving. That led me to search for and obtain a teaching position that continues to provide an intermittent but helpful revenue stream. Teaching enhances the brand and the cash-flow of Freelancers and business owners. That same j.o.b. required me to work with groups and I also came to realize that I could lead mastermind groups, where non-competing business owners and independent consultants meet each week or month to share experiences and insights that serve to support and inspire one other to achieve goals and become more effective leaders.

Threats are obstacles, challenges, or other developments in the environment that stand to undermine a company’s profitability and survival. Changing demographics, tornadoes and earthquakes, political or economic developments, computer hacking or data breach and the coronavirus pandemic are examples of threats. A company typically has little or no control over these events, which are external.

Guarding against threats is a risk management, defensive strategy. The best offense is a good defense. Keeping an eye on technology developments that may impact the desirability of the company’s products and services as well as being aware of potentially influential direct or indirect competitors who could cut into the client list are essential defensive actions. The idea is to limit or avoid the impact of harmful business conditions.

Market research

When you’ve discovered what appears to be the best direction for the company, curb your enthusiasm and take time to investigate the most advantageous business strategy before taking action. You owe it to yourself to lay the groundwork for sustainable success.

Research the market size, target market purchasing habits, the competitive landscape and your ability to access customers. Confirm that demand for your products or services is growing and not flat or shrinking. Consider business model possibilities that could work well. Talk to someone at the Small Business Association’s (free) SCORE business development mentoring program and discuss your restart plan with experienced business leaders before investing time and money.

Market strategy

Articulate an appealing marketing message and pencil in the olaunch campaign. Will the business have a new name? How will you introduce this newly configured venture? How will you describe and explain your pivot or redesign to current customers? A from the ground up marketing plan must expertly package, explain, persuade and promote to enable the bounce forward.

Budget

Whether it becomes necessary to build a new website, order new business cards, or take a workshop that will enhance your credentials and perceived credibility in the minds of new and original customers, it’s important to project business start- up costs.

Develop a 24-36 month financial plan and ensure that working capital will be available. Plan to have income as the new business ramps up. This could mean remaining employed in the j.o.b. for another year. When escaping a set-back, one must do what one must do to nail a successful bounce forward.

Thanks for reading,

Kim

Photograph: Kim Clark

Business Building Essentials

While you’re thinking about how to give your business an injection of growth hormone, uniquely formulated to push your billable hours up and out of the doldrums, it’s also a good idea to reconsider some ground level business building essential practices that will confirm what you’re doing right and reveal what needs an edit.

Business founders must perfect not only the functionality and value of the products or services that are sold, but also create the organizational structure that will launch and support those products or services. You, founder and owner of the company, must ensure that you have your arms around each of these six elements discussed here. If ownership is shared by partners, then the responsibilities will be divided between you.

One division of labor method can be based on the percentage of the business owned, governed by abilities and preferences. Another method is to let ability and preference rule and choose a Managing Partner. That individual might own the largest share or the smallest share of the business, it doesn’t matter.

Managing Partners are compensated for the work they do, beyond the share of profit (or loss) that their ownership share entitles them to. Whether the business structure is Inc. or LLC, a W-2 salary can be paid to the Managing Partner. Discuss the matter of partner duties and compensation with your business attorney and put the agreement in writing.

A third option for monitoring and managing these responsibilities is to hire a W-2 employee or a 1099 Freelance consultant. There is no shame in calling in outside experts.

Positive cash- flow

The responsibility for positive cash flow belongs to the Finance Department, but the Sales Department is responsible for generating the revenue that keeps the business solvent. The Finance expert will monitor Accounts Receivable and Payable and enable a healthy cash-flow. In addition to generating sales, invoicing on time is critical to the process.

Operations

Inventory, quality control, managing employees and Freelancers, product manufacturing, delivery of core services, insurance and licenses and permits all land in this far- ranging category. IT, the telephone system and HVAC are other responsibilities that land in the Operations in- basket.

Operations functions are the nuts and bolts, where the rubber hits the road, hands-on aspects of the business. Excellent organizational ability is the key factor in successful operations management. Ownership of these duties can be assigned to whomever is best qualified to handle them. Sharing of theses duties by the partners and/ or hiring outside experts to oversee specific sectors will be wise.

Metrics to measure

The metrics used to measure business performance will change over time, but do some research of similar organizations and get insight into what numbers you should follow and the story they will tell, separately and together.

Plan to pivot

Doing business is so volatile now, it’s safe to say that a pivot is on your future, so why not anticipate it? Think about potential Plans B and C. Should your business venture falter, whether a flashy and well-funded competitor moves in or, gasp, you must contend with an unheard-of government mandated shutdown of your enterprise, how might your organization retool, pivot and survive?

You can help yourself by engaging and communicating with your customers to confirm why they buy from your company. You can also find out what competitive products and services may be appealing and why. In this way you can learn what you might adapt and hold on to customers should the business environment change. Staying abreast of new technologies on the horizon, new legislation, new competitors and even changes in local zoning

Culture and values

Bake into your business practices integrity, the expectation of excellence, first-rate customer service and, when necessary, the willingness to admit that a mistake has been made and an apology and/or a do over is in order. Let your customers, partners, suppliers, vendors, employees, Freelancers and most of all yourself see your humanity and your humor, too.

Coaching and mentoring

The founder(s), C-Suite leaders and staff deserve opportunities to sharpen their skills and even discover and nurture new competencies. Company sponsored professional development benefits a business in so many ways. Employees (and leaders) who feel confident about their skills and career possibilities and trajectories are nearly always happy to give back and do their best work.

Thanks for reading,

Kim

Photograph: Kim Clark. Construction site on Ipswich Street adjacent to Fenway Park.

Plan B: The Pivot

By now you have reviewed your 2013 numbers and you know how you feel about the results.  If your revenue has been less than stellar for two or more consecutive years,   it’s time to think seriously about how to respond more effectively to the business environment that you face.  You need to create a Plan B and pivot.

Or maybe your numbers were more than respectable,  but because you are a savvy business person you know to look three years down the road and follow the advice of hockey immortal Wayne Gretzky and skate not to where the puck has been,  but to where it’s going to be.  Scanning the horizon for potentially lucrative opportunities and a pivot is always a good idea for those in business.

To pivot is to tweak your business model in response to current or impending business conditions,  good or bad.  To increase the chance that you will successfully tweak your business model and pull off a good pivot,  planning is imperative.  Market research and reality  (i.e. market)  testing of what you think will work form the basis of your pivot plan.  Start with an analysis of which clients hired you and the projects you were asked to do.  Your successful pivot could entail expanding your outreach to those clients.  What other services can you provide to them and how might you persuade them to upgrade what they hired you to do previously? Also,  how can you obtain repeat business this year,  so that you can introduce the upgrade?

Conduct some informal market research and develop a pivot strategy.   You might get clues about which of your products and services clients value most,  services you might expand and upgrade,  or additional services you can develop and sell by reading blogs and newsletters followed by those in the industries that hire you.   Invite a favorite client out to lunch or coffee and ask about organizational initiatives or industry hot buttons.   I think you can afford to be frank and let the client know that you enjoy working with him/her and that you wonder how else you might be of service.   Don’t be shy! You need information to set up a marketing test so that you can identify the Plan B to pivot into,  along with a marketing message to announce and sell it.

Alan Spoon,  general partner at the Boston office of Polaris Venture Partners,  recommends that you closely study your customers’ broader behaviors around the use of your products and services.  Your research should help you address these questions:

  • What do I do that is perceived by clients as distinctly valuable and could potentially be extended to other client needs?
  •  Are there products and services that can have an ongoing use and thus extend billing beyond the initial project?

Thanks for reading,

Kim