May 20, 2020

Managing a Business Crisis over the Long Term

Fix This Next
By: Ronald B. Allen

The keys to successful business crisis management are accurate assessment of the problems involved and the prompt institution of effective measures to deal with each of those problems. The role of Fix This Next in managing a business crisis is increasingly important as crisis conditions endure for months or even years.

V, U, and L-shaped Recession Recoveries

When a business crisis occurs because the economy goes into a recession, there are three possible recovery scenarios. These are the rapid V shape, the prolonged U shape, and the L shape in which a business, business sector, or the entire economy never really comes back to where it was. While many of the tools for surviving a business crisis are the same for each of these scenarios, the aggressiveness and duration of your response will vary with the scenario type. When a business downturn lasts and lasts you will need to address issues somewhat differently than when you can reasonably expect a rapid recovery.

Managing a Short-term Business Crisis

What a business crisis hits hard and fast it is important to avoid making fatal mistakes due to the shock and sense of desperation that can occur. Sound evaluation, prompt institution of corrective or remedial measures, and effective business practices to track your problems and the changes that you institute will get you through the crisis.

Dealing with a Long-term Business Crisis

While you can often get through a short-term crisis in your business by using your savings and your line of credit as well as making adjustments to keep sales going and profits reasonable, a long-term crisis may well exhaust your cash reserve and your credit. It will be important to have a realistic sense of just how long a downturn will last. Then the issue will make making your business successful under different circumstances for months or even years. The Great Depression lasted a decade. In this sort of situation a Fix This Next can help you maintain or even improve sales while managing profits. The Fix This Next method of business management is ideal for this circumstance as it drills down to the core issues in your business, devises effect measures to solve problems, and institutes tracking programs that alert you whenever an issue threatens to re-emerge.

What if a Crisis Causes Lasting Damage?

Before you start thinking that nothing will drive the US economy down forever, think about Japan in the 1980s when their industries and businesses seemed set to dominate the world. Their hidden and excessive loan network was a soft underbelly that led to three decades now of economic stagnation. While a long-lasting crisis will have its victims and its survivors, those businesses that act promptly and effectively are likely to be among the winners in years to come.

Fix This Next is usually used to improve performance of a normal business. It is an excellent tool to get through a short-term or medium-term business crisis as well. But, where this system holds the most value is when the nature of your market, your business, and your income will change for years or even forever.

Fix This Next helps you find and stamp out the hidden costs that stymy your business in the good times and can kill it during a long term business downturn. Profit First is another business approach that can help you in both good times and bad. When things are going to be bad in your business sector for a long time, problems that are amenable to quick fixes in a short-term crisis require permanent solutions when the entire business landscape changes for years or forever.

When you have a Fix This Next coach like Exigo Business Solutions with years of accounting and business experience at your side, you will be better prepared to deal with the possibility of a long-term business crisis.

For more information about Fix This Next and how we can help you through a business crisis or at any time, contact us at Exigo Business Solutions today.

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