3 Ways Businesses Survive During a Crisis
Created on 5 July, 2024 • Scale Up Business • 81 views • 2 minutes read
In less than five years, the world has faced several crises, from the Covid-19 pandemic to the Russia-Ukraine war, and now the ongoing inflation crisis
3 Ways Businesses Survive During a Crisis
In less than five years, the world has faced several crises, from the Covid-19 pandemic to the Russia-Ukraine war, and now the ongoing inflation crisis.
Many sectors, directly or indirectly, have felt the impact of these crises, but businesses have been hit the hardest.
However, as these crises occurred relatively close together, many business owners have learned valuable lessons from each one. As a result, they have managed to keep their businesses afloat, and some have even seen growth.
3 Ways Businesses Survive During a Crisis
Here are three strategies businesses use to survive during a crisis:
- Becoming a Cost Leader A cost leader is a company that cuts costs across various areas, such as operational expenses, marketing costs, and other potential business expenses. By doing this, a business can increase its profit margin, allowing funds to be allocated to other important areas.
- Alternatively, businesses can lower their selling prices while still maintaining profitability, making them more competitive in terms of pricing. The key to becoming a cost leader is smart saving, not stinginess. Great business owners invest in human resources that can manage costs more efficiently during a crisis.
- Building and Expanding Networks The second strategy is to build or expand networks. This aims to broaden the supply chain. Before a crisis, a business might rely on a limited number of partners. During a crisis, it's essential to find new connections.
- Expanding your network can help you find cheaper suppliers, suppliers with longer payment terms, or those who can deliver products faster. This flexibility can be crucial during tough times.
- Investing in Human Capital and Technology Crises can weaken a company, so it's important to assess the company's performance and health. For this, you need the right tools and skilled experts.
- While many companies focus solely on survival, smart business owners also think about investing in technology. Technology and human capital are key to leveraging the company once the crisis is over. When other companies are just starting to recover, those who invested wisely will already be thriving.
These are the three ways businesses can survive during a crisis. Hopefully, this information is useful to you. See you in the next article!
Conclusion
Businesses can survive crises by becoming cost leaders, building and expanding networks, and investing in human capital and technology. These strategies help businesses remain competitive, flexible, and ready to thrive when the crisis ends.