Here we are again: uncertainty! Welcome to the real world, folks! But have we ever lived in an easy and predictable world? Most of us, entrepreneurs, would answer by the negative. Yet, deep down, it is human nature to hate the unknown.
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Inflation, interest rate hikes, stock market volatility, energy crisis, climate changes, product shortages, and more- whether we want it or not, these days a pessimistic outlook is constantly spread over news and social media. As such, we can’t help but take some of these aspects into consideration, and get ourselves prepared for a storm that may or may not come. Having said that, the no-panic mode should always be on- there are always things to be optimistic about, and staying calm and clear minded is key. Once that mindset is achieved, entrepreneurs, business owners, and company leaders should consider a few actions to conduct their businesses and mitigate their risks.
Some of us may have started to feel what I call “the post-post-COVID-19 downturn.” After all, let’s face it: 2020 and 2021 were never normal years. This was a time where our fundamentals and human behavior changed, temporarily or permanently, and it created opportunities for many businesses (i.e. in finance, technology, e-commerce, and logistics) while putting others in difficulties (i.e. aviation, travel, and tourism). But now, the truth is that the world’s economies have rebounded better than any economist has predicted, but very few listened to the not so loud voices on the concerns over the mid- to long-term consequences. With money and cash flowing to markets at unbelievable rates, investments flourished, company valuations boomed. Expectations on returns were falsely based on continuous rational consumer patterns, stable markets, and exceptional balance sheets. Among other macro-economic factors, this has led to some of the instabilities that we should now be prepared for.
So, how can we, as entrepreneurs, survive -and perhaps even thrive- during these tumultuous times? Here are a few of my tips:
1. Do not obsess over things you can’t control The first advice to my fellow entrepreneurs is to forget what you just read in the lines above, and to not obsess with things that you can’t control: in other words, mind your own business. It does not mean that you should ignore the driving forces of the world’s economics, but in reality, you can’t overload your mind with too much information that may distort your reality. You need to filter. To do that, assess and refine your company’s competitive advantages, and take it as an opportunity to pause and update your SWOT (strengths, weaknesses, opportunities, and threats) and PESTEL (political, economic, social, technological, environmental, and legal) models. Know your ecosystem inside out. Only take into consideration the elements that have a direct impact on your business, and create a range of different scenarios to guide you in your strategic decision-making.
2. Do not avoid uncertainty- confront it! For entrepreneurs, risk is part of the process. Starting a new business and working to achieve success with it creates difficult situations and obstacles that we must overcome. Now, it is normal to try to narrow things down to certainties by applying prior experience, logical prediction, planning, and analysis. But, instead, we need to be able to shift our mindsets, and open things up to the possibilities inherent in uncertainty by being creative and imagining the new opportunities that will arise. Trust yourself, your knowledge of your industry, as well as the market trends and competitor habits. Get yourself comfortable for a rollercoaster ride, and be ready to flex, adapt, and pivot as required.
3. Choose your battles wisely Whether it is in media, fintech, e-commerce, beauty, hospitality, or any other sector, we all have our own industry-specific challenges, and it is sometimes overwhelming to address them all in a short period of time. Entrepreneurs take an endless number of decisions on daily basis, but if you have a team of trusted partners, do not hesitate to ask for their support. It takes a lot of effort to step back and let others recommend choices, but it is rewarding to operate as part of a team. Remember that good leaders are not just good decision-makers, they also listen better and encourage others to lead and grow. If you don’t have a team and/or your resources are limited, you need to identify and prioritize what is important and urgent with the end goal always in mind. When prioritization is managed well, you will be less reactive and more focused. Agility and flexibility are key to adapt to landscape changes.
4. Protect your cash Sun Tzu has famously said: “He who wishes to fight must first count the cost.” High inflation, talent shortage, erosion of purchasing power, etc. may pressure your cash flow by lowering your revenues and increasing your operating costs. Given this scenario, much like the tech industry is doing, adopt a frugal (economical) mindset from now for your business. Be smart in your spendings, and cut where necessary for the short term. As you develop a deep understanding of your economics and non-financial metrics, you will prioritise resources that directly contribute to the long-term vision of your venture.
5. Stay connected to stakeholders Our society is fastpaced, heavily automated, and digitally driven. Businesses that stand out are the one that put their humanity forward, and the customers and their staff at the centre of what they do. Remember that employees are people, investors are people, clients are people, and lenders are people too. Ultimately, people do business with people. During uncertainty, people need reassurances to maintain their trust. Take this opportunity to review your communication to make it concise, precise, honest, and transparent. You need to demonstrate your consistency and resilience by regularly engaging with your network, explain where you are going, and how you are going to navigate the storm. In the end, your network is your net worth.
6. Never let a (potential) crisis go to waste- innovate! Entrepreneurs who spot problems on the horizon and respond quickly to them tend to do well. Successful entrepreneurs are experts in adapting to new situations and innovating through adversity. This may be the time for you to do a strategic review of your processes, products/services, and innovations. The world has changed, and the accelerated digitalization is transforming many sectors at a rapid pace. Whether it is artificial intelligence, machine learning, 5G, fintech, or simply data-rich collecting tasks, you will need to understand how these technologies impact your industry, customer experience, your consumers’ behavior, and how you respond to that. This is your opportunity to build a more robust and innovative business model to thrive when the storm will pass. And it will pass.
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7. Work on yourself and stay positive Although your business may require you to steer the ship in troubled waters, you need to know how to manage and mitigate the anxiety and stress that will arise from the uncertainty. By adopting a healthy lifestyle and a good work/life balance, your body will effectively recharge its batteries, and help you reduce the negative impact of stress. If you are an entrepreneur, chances are that you are an energetic individual and passionate about what you are doing. This aspect is crucial to maintain self-motivation and developing the right mindset for success; so, look after it. Staying positive, even when setbacks arise, is key to moving forward and pushing through. A positive mindset can help you turn a bad situation into a good one in a short time, with better results.
