Resilience is often defined as the ability to bounce back from a setback. It is essential that every manager and owner master this ability in order to survive in the business field, regardless of how difficult it may seem. In this blog, I have listed out six experiences that sometimes feel like the end for managers and owners. However, being prepared for these experiences can help aid you in mastering the art of resilience.
1. Losing a Large Customer
If you have been in business for any period of time, you know how this feels. Getting a call or email that informs you of your client’s decision to move on is not an easily forgotten day. Clients are often very complimentary in the “firing” process, yet, you are aware of what is really happening. After the shock wears off, the important thing for owners and managers to remember is the concept of moving forward.
In my personal experience, this situation happened to me after about 5 years into my business. I was so dependent on this customer that I actually had fears of shutting my business down and getting a new job. Luckily, I was too stubborn to give up and I ended up building a bigger and more financially-sound company equipped with a solid foundation for the future.
When this happens, you have to see this as an opportunity that you may have been too dependent on one customer. You cannot base your company’s future off of decisions you have no control over. You may have great relationships with that customer, but people move, quit, experience change, and even go out of business.
Make sure your business is diversified enough that you are never dependent on one business. Learning to treat each client as if they were your only client will get you far in the field of business.
2. Losing a Key Employee
I have had the privilege of working with some terrific people over the years, and unfortunately, a few of them have left for one reason or another. The process of losing a key employee is often difficult and hard to prepare for.
If you have key personnel you want to make sure to always invest in them, show them appreciation, and acknowledge their importance within the business. Nevertheless, you must always remember that they are individuals and they may have to move on for one reason or another. Don’t sweat it! You will still be fine.
Building a company that is able to recover quickly from the loss of a key employee is essential. Your other employees and clients should not be dependent on one person staying there. Make sure to build in redundancy and transition plans for the day this happens. Lastly, remember that people are subject to the Six D’s in life (Death, Divorce, Drugs, Drinking, Departure, and Desires).
3. Data Loss
Think about what would happen if you lost all of your data. Things like your customer database (CRM), primary application, intellectual property, POS system, or other mission critical applications. Maybe you rely on all cloud-based services and the internet goes out. How would your business function? Could it function?
Often times these events can trigger all sorts of emotions that result in poor decision making. You may not have proper backups in place, maybe your data is stolen by cybercriminals, or maybe a construction crew knocked down a light pole taking out the electricity. You need to be prepared and ready to handle situations that could result in the loss of your data.
Making sure you have taken the proper steps to prepare for a disaster is key. You need to identify the key assets inside the organization and walk through scenarios of how you would handle a situation if something happened to them. You should create a Disaster Recovery Plan, which is a printed copy of key contacts and locations of the backup data. Additionally, you can install a second internet connection (from another carrier) to make sure that you have backup service. You can even use mobile carriers as the backup if you purchase the right firewall.
There are multiple ways managers and owners can prepare for these events. The key is being able to only have a temporary, if any, setback from a data loss issue. For example, I remember one time a fire broke out at a restaurant that was in the same building as my business. Due to the smoke, the fire department shut down the building, preventing access for anyone. Since our business had a redundant phone system, we just had to find a place for our employees to work and we only lost about an hour of productivity!
4. Vendor Changes
Is your business dependent on one or a few vendors? What would happen if they went out of business? What if they were bought by a competitor? What if their partner program changed and you no longer qualified?
Managers and owners should be prepared for the risks associated with supply-chains. Never become overly dependent on one vendor. Doing so could be disastrous. Remember that your primary role is to take care of your customers, not being a loyal vendor. I think having deep relationships inside of vendors is a strategic advantage to any business. However, you are not in charge of their decision making and therefore don’t let them dictate the future success of your business.
Vendors should be looked at as a tool but not your toolbox. Be prepared to change out any tool on short notice. Don’t lose your clients because of disruptions.
5. Political Decisions
If there was one area where you have little to no say so, it is in the political decisions made by the people we elect. We all have a voice, but there is no say the majority will agree with you or the politician will even do what they say once elected. In the course of running my companies I have seen markets shift, slowdowns, booms, busts, and more. I have recently seen the down effects of tariffs and the benefits of lower tax rates. If I were to rely on politicians for my decisions I would have started and closed a business in the same year!
Regardless of what politicians do, ready your company. Stockpile cash in good times and make investments during bad times. Never base your business off of the politician of the day or off of their policies. Additionally, never think that once a law is enforced it will continue to be enforced, remember prohibition?
Governments can have a huge effect on a business and its ability to operate. So be prepared and never rely solely on state, local, or federal government for your sales.
6. Local Communities
The resurgence of older neighborhoods, the creation of new areas, revitalization projects, and the unfortunate decline of others tells us one thing, change is always occurring. I recently drove through where I grew up, and the land looked nothing like it did when I was a kid. The old open fields are now full of retail and restaurant areas. My old school was gone as well as the McDonalds we would go to after school had moved to a different area where there is a Burger King nearby.
What would happen if your area declined? What if the road was widened and they prevented left turns into your building? What would the effects be if unrest broke out like we saw in Baltimore and Ferguson? Is your business dynamic enough to adjust?
Consider these questions throughout your business model and be aware of what is going on around you. If you see changes decide if they are for the better or worse and execute your decisions around that. Maybe there is a market opportunity there to capitalize on the changes? Or maybe you can sell a property before the decline starts? Keeping abreast of local issues is key to whether you run 1 location or 10.