How To Weather a Business Drought
Are you a new or seasoned business owner? Then let's hit one of the business truths no one wants to talk about: your business will likely face a drought in the future.
Before you go running, screaming and hiding, just know there are 3 easy ways you can prepare today for a business drought!
Before we dive in, let's first break down a business drought. There are two main ways a drought happens:
Internal Changes - This stuff is in your control. Maybe you raised your price or you completely pivoted your business goals. Perhaps you slowed down your marketing campaign 3-9 months ago. Other times you just needed a break to tend to your some personal life changes, causing you to step away for longer than intended.
External Changes - This stuff is out of your control. There might be market shifts, rising expenses, clientele changes or even more/easier competition swaying your customers' decisions! There could even be a large political landscape slowing down buyers from making decisions.
Sometimes external changes mean you need to pivot internally to keep up with trends, or learn new techniques to compete in the current market. Other times, you just need to weather the storm (like during the slow side of your business season)!
In order to set yourself up for success, I have three steps to help you survive (and thrive) the season. Because once a drought creeps in, you'll find other ways to doubt yourself if you're not prepared!
Step 1: Save for a Rainy Day - Collect a rainfall of money when business is doing well, to use when business isn't doing so well! Put away extra money during your full seasons to help you get through your lean seasons. I setup a separate business emergency fund account for myself. Only use your "oh shit" money for legitimate "oh shit" reasons. Not just because you want to go on that business retreat that you haven't planned on....
Step 2: Revisit your Expenses - A dollar saved is dollar earned. Ever heard that before? The fastest way to give yourself a raise is to cut your expenses, so every 3-6 months reassess your business expenses and see if any bills can be consolidated, reduced or eliminated. I notice most customer relationship management systems (CRM systems) make updates every few months, so it's a good time to see what can be re-evaluated and brought together on a schedule as a team!
Step 3: Know your Bare Bones Minimum Expenses for your Business and your Personal Life - This is key. Sometimes there's nothing left to cut, and maybe you know a project will be coming to fruition shortly. This usually happens after we have to make a bigger risk into a new line or facet of our business or if we're trying to pivot business directions. Know when to keep putting forth the energy (and resources) into a new idea. It's OK to cut down your paycheck temporarily if you can handle the reduction in pay AND if you have a separate emergency fund for yourself too! Knowing your business and personal numbers is key to making step 3 work without losing your sanity or running out of money too quickly!
Just remember, a lean year on paper doesn't mean a "less" year for you! You can still have a full year if you've planned ahead in both your business and personal life! For many of us, the worst time to make a decision on cutting back within the business is if we're skirting too close to the edge. There are a lot of ways to save money and create more margin within your business before you need to start completely changing processes!
Brooke Olsen Consulting is a pricing and business strategist team. We specialize in pricing + profitability, financial education and business strategy for creative business owners and entrepreneurs just like you! We're focused on creating an intentional business and life by breaking down the black box of your financials and system processes. Check out our core values for more of the heart behind our corner!