How to manage your small business through tough times
Saying the past several years have been challenging for businesses might be an understatement. Small business owners have weathered a lot, and now face a looming recession. While there’s no ideal time to run a business, we can walk you through how to manage your business during tough times. That way, when silver linings appear again, you’ll be battle-tested with the skills to succeed in the toughest circumstances.
In this article, we’ll share our tips to navigate tough times, including:
Adopt a growth mindset
“Growth mindset” might seem like one of those buzzword management tools that come and go. But, this evergreen idea can help you build a culture that can support a successful business.
A growth mindset is the belief that you can develop talents through learning, hard work, using good strategy and guidance. This is different than a fixed mindset, which believes you either have talent or you don’t — which can limit success.
It’s important to note that a growth mindset is more than just a positive outlook or rewards and praise. Outcomes and the bottom line matter — but instead of just rewarding positive outcomes or effort, you reward the learning, progress and processes that help lead to wins — including seeking help from others, trying new strategies and capitalizing on setbacks.
Having a growth mindset doesn’t mean you can’t or won’t sometimes fall into a fixed mindset. It’s easy to be triggered into a fixed mindset when facing challenges, receiving criticism or facing stiff competition. Fixed mindsets can cause insecurity or defensiveness, which limits growth and fosters discord.
According to the Harvard Business Review, employees report feeling far more empowered and committed in organizations that adopt a growth mindet. They also report better collaboration and innovation due to the organization’s support for growth.
Adopting a growth mindset means that your business’ culture can nurture the motivation, innovation and productivity that can get you through the toughest of times.
Delegate, but don’t abdicate
As a small business owner, you might have to wear many different hats as you tackle a business plan and build a startup. But at a certain point, you may need (or want!) to be less involved in day-to-day operations so you can focus on what you do best.
This is where finding and hiring new employees comes into play. Find people who you trust and have the skills and talents that your business needs (and might not be your biggest strengths).
Are you so-so on bookkeeping? Find a CPA who can help keep track of cash flow with ease. Not a marketing guru? Find folks who can do content marketing, social media or draft you a killer marketing strategy. It’s all about trust and building a team that can help you make the best business decisions, especially in tough times.
Building the right team doesn’t necessarily mean staffing up, either. You can leverage gig economy apps and sites to find freelancers with expertise to take on particular projects with distinct scopes of work and timeframes that can get you what you need on your timetable without taking on the overhead costs of staffing up.
When you have people you trust in place, you can give them the autonomy to act. That way, you can stop trying to do everything yourself and give up time-consuming tasks on your to-do list. Improving your time management can help you focus on thriving, not just surviving.
Commit to a vision, not ideas
It’s easy to get mired down in day-to-day business operations. But it’s important as an entrepreneur that you’re setting the vision and shared goals for your team. Your vision is all about what you want to achieve as an organization, deliver to your customers and how to stand out from competitors.
But don’t be afraid to get creative regarding how you get there. With a growth mindset and strong vision, initiatives and new business ideas may come and go, but they won’t disrupt your ability to deliver the basics of good business: quality, service and responsiveness.
Don’t let fear hold you back
There’s been a lot going on in the last five years. Small business owners have weathered the COVID-19 pandemic, supply chain and hiring crises with basically no breaks in between. In these moments of uncertainty, not knowing what to do can feel terrifying. Plus, there isn’t a way to plan for all contingencies and scenarios that could ever come into play. But don’t get stuck.
Fear is a feeling like any other, and our feelings are like the weather — wait five minutes and it’ll change. Your feelings are no different. When you can recognize fear and process it, you can recenter yourself so you can take action to keep your business running smoothly.
Hire people who can roll with the punches
We’ve established that trust and a growth mindset can help people and organizations go far together. Another key ingredient is resilience.
Resilience can look like comfort with paradoxes, crisis or high-pressure situations. Resilience is knowing you might not have all the answers, but you’re willing to ask questions. It can look like the ability to see situations not as right or wrong, black or white, but as they are. Resilience paired with the right skill set can help you build a team that’s highly adaptable and can roll with the punches when you need to pivot because of the market, or because you’re ready to tackle a new challenge.
It’s possible to train people on practical skills and knowledge on the job. That said, teaching resilience and a growth mindset can be much tougher. So when building your team, it’s worth it to find and hire employees with grit, creativity and commitment to your mission — not just the right skill set.
Manage your resources well
You’ve set a vision and have a team you trust in place. You’ve built a culture where growth mindsets can thrive. Next? Realize that all of your business - from the inventory, location, team, workflows, down to the equipment and brand - isn’t set in stone.
With a little strategy, you can reallocate and streamline your resources to tackle new trends head-on or capitalize on new opportunities. Whether it’s new product development, automation or new functionality, you can put people and tech together in new ways to learn and move fast with creative small business management.
Diversify your business
“Don’t put all of your eggs in one basket” is a saying for a reason. During times of uncertainty, businesses often have to go with one of two strategies: Stay lean and mean or double down on growth. There’s no right or wrong answer. You can look at your business’ overall health, finances and risk tolerance to create a path forward that makes sense for now and the future.
Whether you stay lean or choose growth, you’ll look at many ways you can diversify and change up your business. You’ll want to review your business finances and operations, thinking critically about every tool and service you’re paying for and make sure you’re getting ROI. You’ll want to look at productivity to make sure you’re focused on finding new customers to enhance your business’ financial health.
Instead of battening down the hatches, taking out a small business loan or line of credit might help you fund growth. If you’ve done work to build your business credit and feel comfortable taking on debt, you can fund projects that will grow your business. Taking on debt during higher inflation with higher interest rates can be risky — so you may want to consult with a financial advisor before looking for lenders. If you’re a sole proprietor, you may want to weigh the potential risks to your personal finances.
Look at the data
Rely on your customers to tell you what they want and what they’re thinking. New opportunities for revenue and retention lie within what your customers want. Plus, times of uncertainty can create new customer segments.
Prices shift and as your competitors lower prices, you’ll need a strategy to be competitive in a price war. Adding price options or tiers can help you retain customers or find new ones. Lower tiers can help repeat customers who are struggling financially, while higher tiers/packages can be marketed as “premium,” which can appeal to customers looking for exclusivity.
Diversifying and adding products at lower price points or bundling services can help you find new customers and keep your loyal customers happy as they navigate inflation. Continuing with marketing efforts such as growing your Instagram followers and selling on social media can help you find your target customers.
Navigating tough times doesn’t mean doing it alone
It helps to lean on your community when facing hardship. While it’s great to have a personal support network that consists of family and friends, it also pays to have a community of like-minded entrepreneurs who know what you’re going through.
Helping entrepreneurs build, run and grow better businesses is Heartland’s core principle. We’ve got the tech that can help you succeed, but we wanted to do even more. It’s why we developed The Entrepreneur’s Studio, an on-demand suite of lessons, tools and tips from entrepreneurs who have been in your shoes. Our courses, podcast and community can help inspire and equip entrepreneurs like you with the resources and support you need to overcome everyday challenges.
Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us