6 Ways You Can Make Your Business More Durable Now (and Sellable in the Future)
If you’re like most business owners, the first quarter of the year was progressing like any other.
A superbug starts terrorizing the world. Sporting events are canceled. And one by one, businesses begin to close their doors.
Covid-19 dealt a significant blow to most businesses. Perhaps you’ve stabilized your company, or you might still be experiencing the worst of it. Either way, you’re probably a different person as a result of this pandemic.
As things begin to slowly reopen, you may notice a change in your outlook.
Over the past couple of weeks, I've spoken with many business owners who are grappling with the mental health effects of the lockdown—particularly re-entry and the third quarter of isolation... when things get weird.
We entrepreneurs don't talk much about mental health. Instead, we surrounded by a culture of bravado that is celebrated by our peers and reinforced in the media. Unsustainable habits like endless workweeks or skipping meals, sleep, rest, and vacation time are worn like badges of honor. But as a group, we are more susceptible to mental-health struggles than most others.
Post-Traumatic Stress Disorder (PTSD) is a mental health condition triggered by experiencing a terrifying event. Although not at the level of enduring a war zone, the events of the past couple of months may leave you feeling similar symptoms.
The Mayo Clinic reports four symptoms of PTSD:
- Intrusive memories: recurrent, unwanted thoughts
- Avoidance: trying not to think about the trauma
- Negative changes in thinking and mood: destructive thoughts about yourself and other people
- Change in physical and emotional reactions: being easily frightened, overwhelming guilt, or substance abuse
Any of those sound familiar?
If so, you may be experiencing the psychological toll a catastrophic event can have on your psyche...
"Anybody who is experiencing anything difficult is a normal reaction to an abnormal environment."
If so, you may be experiencing the psychological toll a catastrophic event can have on your psyche. Fortunately, there are three constructive things you can do now.
Option #1: Talk to Someone
Soldiers deal with PTSD by talking to a psychotherapist. Speaking to an advisor about how this pandemic has impacted your business can be therapeutic, and I'm here to help.
Option #2: Rebuild a More Durable Business
This crisis has given us the opportunity to reset. A constructive reaction to this crisis is to commit to building a more durable business that can better withstand shocks to the system in the future.
Option #3: Sell
Many owners—especially those that experienced the brunt of the 2008–09 global financial crisis—have been so traumatized by this pandemic that they don’t have the stomach for another disaster. As a result, they’ve decided to start planning their exit proactively.
If you find yourself choosing option 2 or 3, your immediate action plan will be the same. There are some things you can do now that will make your business more durable in the long term as well as more sellable:
- Focus on your products and services where you have a point of differentiation. You’ll have more pricing authority in the short term, have better cash flow, and be more attractive to an acquirer in the long run.
- Create recurring revenue streams that generate sales while you sleep. These can be in the form of service contracts, subscriptions, or maintenance plans. Aim to get the majority of your revenue automatically.
- De-risk your business, ensuring you’re not too reliant on a single customer or supplier.
- Create an employee handbook and systematize your processes to lessen your dependence on a key employee (or you calling all of the shots).
- Clean up your bookkeeping.
- Generate as much cash as possible from customers upfront to create a positive cash flow cycle.
If you’re like a lot of the owners I work with, your business is part of who you are. When that gets threatened, it’s natural to feel traumatized. If you can redirect that energy into building a more durable business, you may never have to experience something like this again.
For more insights into how to build a valuable business, don't miss:
- How to remove yourself from the day-to-day running of your business (and why you need to)
- How to switch to a recurring revenue model (and why you need to)
- The Ultimate Dictionary of Business Exit Terms You Should Know
- 5 reasons to run your business like you plan to sell it (even if you don’t)
- Why increasing revenue doesn’t always make your business more valuable (and what you should focus on instead)
And subscribe to The Freedom Experience podcast for weekly episodes that pull back the curtain on how to transform your business into a valuable asset.
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