10 Tips to Business for Surviving an Economic Downturn (Overview)

It is no secret, the coronavirus pandemic is finally here at home, and it brings with it some very serious repercussions. It is a fact that around the world the financial markets are literally tumbling down. Numbers are at their lowest ever in terms of value and making matters worse, no productivity is going on in view of the fact that several nations world-wide with very large economies are on lock down. That means productivity is at an all-time low. As you may imagine, this is having a serious knock on effect which we too as Zambia are feeling.

When you add to that the fact that our country has been struggling with all our fundamentals through what can best be now aptly termed as “galloping inflation” and a kwacha almost on free fall, we are without a shadow of a doubt definitely in “tough times”.

​So then if this be the case, what is one to do?

I have repeatedly mentioned in this blog that people must seriously begin to overcome their “pay check” or “salary” addiction. I know that could be construed as being insensitive, but ask yourself this question, where are the jobs? With so many companies on the verge of collapse, serious financial upheaval, challenges with cash flow, and worse, galloping inflation, our salaries just cannot sustain us anymore. And with Coronavirus as the catalyst, the shutdown for many businesses over the next 60 days or for as long as only God knows, this could mean the end of income for many people.

As such, now whether you like it or not, you need to seriously start thinking outside the box and seek the opportunities that will be available in the midst of this crisis. And remember, every calamity and crisis always brings with it great leaders because they offer solutions to the problems people are facing. Coronavirus plus all its economic upheavals equals great challenging season for us, but is simultaneously providing a great opportunity to rise to the occasion and offer solutions that go on to become significant in whichever discipline you belong to.

So, let’s assume you decide to get into business (you almost have no choice if you asked me). Let me outline ten tips for you in brief, and then commencing next week, delve deeper into each one in more detail to help give you concrete information that can really help you make some serious progress.

​1. Never Borrow to Start
With statistics at over 95% of businesses failing in their first 5 years, this is a definite red zone and a no-go area. Borrowing already pits you for guaranteed failure in more ways than the already bad statistics

2. Master the 1-3-5-7 Principle
That simply means the following, it takes one year to break even, three years to become sustainable, five years to become profitable and seven years to world class. Don’t be deceived to think you’ll make money earlier or faster – this simply isn’t true for any genuine brick-and-mortar business.

3. Work on your systems, processes and tools
The success of any business lies in automation and efficiency in their operations. Systems are therefore the lifeline of any great business. Most times than not, it’s the inefficiency of these systems that have a direct impact on how much revenue a business can generate.

4. Cash flow is your lifeline (guard it jealously)
Every great business remains that way because of its ability to manage its income and expenses.  Cash flow management is the difference between remaining operational or closing down due to insolvency.

5. Focus on your low hanging fruit first - and seriously build that
What aspect of your business or what opportunities are your cash cows? Which ones generate the highest number of transactions? That is your cash cow – exploit it.

6. Minimize all your overheads
Any overheads that are static and have no bearing on your products or services in terms of their production should be kept minimal to non-existent, especially at the start of your business.

7. Have a passion driven business - not just opportunity
Is what you plan to do a drag? Is it born out of copying others because you think they are making money, or is it because you are very passionate about it? You want to focus on business that is a direct result of a labor of love on your part. In short, take your hobby and find a way to monetize it.

8. Master how to build a winning team (your HR issues)
Your staff is the difference between growing exponentially or remaining mediocre. Choose your team carefully.

9. Create strategic alliances for business
Outsource, create joint ventures and incorporate agencies and distributorships – it’s cheaper and far more effective and efficient than doing it all yourself!

10. Exploit your network thoroughly
It is true that your network determines your net worth. So, who are you hanging around with? How powerful is their net worth with regard to your business and its ability to exploit those connections for money making opportunities?