If your business is currently experiencing a downturn, the number one thing to remember is: Don’t panic. Look at the history of many businesses, and you’ll see a series of peaks and valleys. Slow periods, stagnant growth, inefficiencies, and even scandals have plagued many business owners.
While it’s important to address the issues bogging down your business, know that a downturn isn’t a death knell for your venture. While it’s easy to say you should stay positive, the ability to maintain that positive attitude is another story.
Rather than worrying or getting caught in a cycle of negativity, here are six tips for how to stay focused, driven, and positive:
1. Meet with your mentor
When your business is going through a tough time, there aren’t many people you can turn to who understand your plight. One notable exception is other business owners who have seen it all. That’s just one of the benefits of having a mentor.
Mentoring is invaluable to small business owners. A survey conducted by UPS says that the success rate of businesses with a mentor after five years is double that of those without a mentor. According to the national nonprofit SCORE, small business owners who receive 3+ hours of mentoring report both higher revenues and increased growth.
A mentor might be able to help you find a solution to your issue or connect you with someone who can. Most importantly, they’ll act as a sounding board and provide accountability in a way that non-business owners simply can’t.
2. Don’t burn yourself out working harder
One of the most common pitfalls for small business owners is failing to give themselves an adequate work-life balance. It only becomes more difficult to maintain that balance when business is slow. Some people think that the answer to flagging sales is to redouble their efforts in an attempt to right the ship.
If things were going well before the downturn, your issue isn’t one of effort. Working twice as many hours won’t suddenly produce twice the profits.
For example, not getting enough sleep (4-6 hours a night, as opposed to the recommended 7-9 per night) produces cognitive performance deficits, meaning you’re more likely to make mistakes while you work. On the other hand, research shows that people who are “more engaged in creative activity often scored 15 to 30 percent higher on performance rankings than those who were less engaged.”
The takeaway: Having hobbies and getting sleep–rather than burning the candle on both ends–makes you better at your job. Keep in mind that entrepreneurs are generally more prone than employees to feeling stressed, worried and depressed, and are more likely to experience addiction and mental health disorders. Take care of yourself, or no one will be able to take care of your business.
“The land of burnout is not a place I ever want to go back to.” – Arianna Huffington
3. Don’t sacrifice your quality
When sales are slumping, it’s tempting to switch up your business model in a way that sacrifices long-term goals for short-term happiness. Typically, this means discounting the prices of your products and services–and, subsequently, often lowering the quality in order to keep your share of the profits. However, aggressive discounting isn’t the way to build a loyal customer base.
An analysis by Price Intelligently showed that deep discounts led to a 30% drop in the lifetime value of a customer. That’s because slashing prices makes customers less likely to agree to pay the full amount for your product once you raise it again, increasing your churn rate and forcing you to spend more on acquiring new customers.
Stick to your business plan, or consider making alterations that reflect the realities you’ve come up against. Simply slashing prices to get in people’s good graces isn’t a tactic–it’s a race to the bottom.
4. Look into a form of flexible financing
Cash flow management is a frequent hazard for small business owners. When business is slow, your vendors and creditors still need to get paid–and failing to pay up when required is what tends to sink a business.
Give yourself a little breathing room by looking into flexible forms of financing. Revolving forms of credit, such as lines of credit or business credit cards, are excellent lifelines to have in your back pocket when unexpected expenses arise, or when you need a little extra time to square up a bill before an invoice you’re owed pays off.
Qualifying for financing isn’t always a given, but if you are eligible, having these financial tools at your disposal helps you stay in control of your cash flow.
5. Shift your focus to what you’ve been neglecting
When business is slow, look for the silver lining: Now you have time to work on the projects you typically don’t have time for. Whether it’s consolidating workflows, writing blog posts, networking, or any other tasks you let fall by the wayside, you can now direct your efforts towards addressing them.
When business picks back up again, you’ll be glad you had time to perform tasks that would otherwise continue to bog you down.
“Life is like riding a bicycle. To keep your balance, you must keep moving.” – Albert Einstein
6. Pivot towards a new direction
There are a number of reasons why your business might be slowing down. If you’ve identified an opportunity to pivot your company in a new direction as a result of this downturn, that’s a good thing. There’s no better time to consider the logistics of a pivot than when you’re not as distracted by the everyday bustle of the busy season.
Remember, a pivot–as famously described by entrepreneur Eric Ries–isn’t jumping to a new vision entirely. It’s keeping one foot grounded in what you’ve already validated, while applying those lessons in a new way.
You might pivot to a new set of customers, or to solving a different problem for the same customers you’ve been serving. You might pivot by spinning out one feature of your services into its own product, or adding more features to what you offer.
Making this change can be time- and resource-consuming, which is why you’ll once again appreciate the silver lining of a downturn. Now you can focus on what you can do better, rather than thinking of it as what you’ve done wrong.
Staying positive when your business is on the ropes is always easier said than done. As we’ve seen, however, these moments are actually excellent opportunities for improvement, growth, and strengthening your own resolve. Entrepreneurship is always bound to have its ups and downs–it’s how you respond to those changes that will dictate the level of your success.