Business plan

Put away the COVID business plan – find the one you used in 2008

Doug Lighthouses | for editor and editor

If you’re reading this and your organization is still standing, congratulations! The worst of the pandemic, physically speaking, is behind you and you have weathered an unpredictable global crisis for over two years.

And your reward is an impending recession.

Obviously, there is still much debate and speculation about the details and severity of this economic downturn. But once an idea is firmly entrenched in the cultural zeitgeist like this, people start to make changes, and those changes will have real impacts on your organization, regardless of how economic factors underlying end up playing.

For my part, I am already seeing reports of people spending less, individuals running out of COVID cash, and the obvious inflation on food and gas. So even though this is not a classic recession and it is never officially designated as such, it is undeniable that changes in consumption habits will have real, tangible effects, I cannot not believe that this is not a recession on your organization. .

Of course, how it hits you has a lot to do with how your industry fares in this new, more subdued phase of the pandemic. Over the past two years, many people have made changes to their products and services, the scale of their offerings, and all aspects of their business. By now these changes have probably become normal for you.

If that sounds familiar, congratulations, because you’ll need those same skills to weather this recession. You can follow one of two paths – the typical Hunker Down, which is the most easily accessible or the Market Grab, which has a much bigger risk/reward bet.

Leaders looking for the safest direction often make extreme and drastic changes to navigate a recession, and this approach could be seen as a left turn.

The underlying logic of this strategy is to cut, pull back and weather the storm as consumer spending declines. This means no longer looking for someone to fill the position you were looking to fill, reducing product offerings and opening hours or maybe even reassessing your supply chain and seeing where you can cut the fat – if indeed you still even have a supply chain.

If you’re taking this approach, now is a great time to consider any remaining ideas you have about the pandemic. What did you have on the whiteboard but never really tried? Now might be a good time to give it a try and see how much you can tighten your belt over the next few months until the situation stabilizes again.

Of course, if it’s a left turn, the other popular alternative could be considered a right turn.

This playbook is probably older than my source, but I first came across this approach while reading about Sam Walton. During tough times, Walton would overinvest and seek to expand market share. It expanded discounts, offered more products, and generally did everything it could to offer more to its customers.

Walton could do this because he knew his competitors were cutting back in response to outside pressure. And the economy, like nature, abhors a vacuum, which gave Walton the perfect opportunity to fill the roles from which its competitors timidly backed away.

It is important to remember, however, that important factors influence the viability of this strategy. This kind of hyper-investment requires the ability to take temporary losses without flinching.

The general tone of your industry will also influence the effectiveness of this manual during a recession. If you see the demand for your products increasing, then of course lean into it and increase your market share. But if clients are pulling out and you’re working on a tight budget, maybe you should walk away with them.

I would say, however, that for most people, the “perfect” solution meets these approaches somewhere in the middle. Even if you’re not approaching “Walmart founder’s” cash flow levels, you can probably afford a few select investments to grow your market share right now.

And at the same time, saving money is never a bad idea. Most operators can benefit from reduced overhead without significantly reducing what they bring to market.

If you want to ride out the storm and find an effective middle path, then it’s time to start doing it now. The pandemic has given you a master’s degree in crisis management, so get off the old drawing board and start executing for the next 12-18 months of disruption and opportunity.

Let me know what angles you plan to work on throughout the recession. Where are you downsizing and where are you taking the opportunity to grow? You’ve already got years of crisis management under your belt, so there’s no reason to let this one catch you off guard.

Doug Phares is the former CEO of Sandusky News Group. He is currently Managing Director of Silverwind Enterprises, which owns and provides management services to small businesses. He can be contacted at [email protected]