10 Things You Need to Do to Keep Your Business Afloat in a Downturn

Image credit: Microsoft 365 via Unsplash

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Casual Films was barely two years old when Lehman Brothers went under in September 2008. And so began our first major macroeconomic cataclysm as a business.

In the following weeks and months, we saw clients pause and cancel dozens of projects. Our fledgling business stumbles and our pipeline dried up.

In some ways it helped us as we were small and scrappy and for a number of clients - who were looking for new ways of getting work done - we provided a cheaper, simpler solution.

That still wasn’t enough to stop us from letting all our staff go and having to consider just how far we could cut costs. We worked out that if we each didn’t take a salary, then we could reduce our monthly burn rate to just under £2,500. Now we burn significantly more than that in every hour.

Unfortunately, the Great Financial Crash of 2008 wasn’t going to be our last dance with the financial squeeze.

Talking to our CFO at the end of last year, I suggested that all we needed was a clear run at a year, free from one macro catastrophe after another. He said, sagely, that we now live in an era where we have to expect disruption. The only certainty now is uncertainty.

We’re too early to tell just what the impact of the current economic madness will be. Since it is going to have an effect, I thought I would share some of the things that creative business owners can do to ensure they get through to the broad sunlit uplands on the other side.

1. Tighten financial controls

We live in an age of permacrises, so if you haven’t tightened your financial controls already, you’re probably already in serious trouble. Because of this, it’s kind of a given that you need to be very strict on these. Even so, it’s always useful to review your expenses.

I know business owners who periodically cancel all their company credit cards. All the unnecessary subscriptions that have built up over the years go with them. If that subscription is still being used, then the user will reinstate it. One entrepreneur I spoke to said that he managed to save $60k per month from his costs by doing this! That is real cheddar.

Now is a good time to do this if you haven’t already.

2. Get close to your clients

Understanding what your clients are thinking is more important now than ever. What are they thinking about the service you provide? What is their most significant priority? What pressures are they under internally? Knowing these things will help you tailor your offering to them. The more useful you can be at this time, the better.

3. Do the very best work you possibly can

For the same reason, it is extremely important to do the very best work you can. I always say to the team that we are extremely lucky to have clients who are willing to put their trust in us to deliver for them. Given the scale of the projects we work on those clients are often risking their jobs by choosing one supplier or another. We have to reward that trust by delivering the best possible work every time – without fail. Given the backdrop of financial disruption, this is not a good time for anyone to be messing up on a project. Don’t let that happen.

4. Examine operational efficiency

Sometimes, the best ideas are simple. You don’t always need huge crews and layers and layers of complexity to do a good job for your clients. Break down the workflow and look for inefficiencies and opportunities to be smoother and faster. Is everyone clear on their roles and responsibilities? Can you cut down on back-and-forth? Now is not the time to waste valuable time on inefficient processes.

5. Lean into sales and marketing

When the broader economy wobbles, it’s easy to hunker down and wait for the storm to pass. We’ve found this is one of the best times to be marketing though. Demand will come back and you want to be top of mind when it does. If you have staff who are underutilised, get them to work on additional marketing assets. What kind of marketing cadence can you hit?

Are there marketing projects that you have had in the offing for months that you haven’t found time for? Get them going. Chase up on past leads. We hold sales ‘power hours’ where client-facing staff have clear time to focus on following up on discussions or people that they have met. Get the whole business pulling together to keep the pipeline stocked.

6. Communicate

For a communications business, I hate to say that we can be pretty poor at communication ourselves - the ‘cobbler’s shoes’ - or something like that. Whether it’s your team, your suppliers, or your clients, the more open you are about the realities of the situation, the easier it becomes for everyone to adapt.

If a project needs to pivot, say so early. If timelines need to shift, get that out in the open. As leaders, communication is a two-way street. So, we need to be good listeners, hearing the concerns and questions people have, and addressing them head-on.

7. Look after your team and prioritise morale

People can sense uncertainty in the air, and it can make them anxious. Make time to check in with your team. Remember, they’re the ones providing the service that keeps the lights on. Their happiness translates directly to the quality of the work and the experience your clients have in working with you. Don’t give up on social activities and the support that they have come to know you for. People like working with happy people, so keeping morale high is a major step towards getting through any downturn.

8. Look for partners

Collaboration can be a powerful way to weather the storm. If you find a partner with complementary expertise, you can offer a wider suite of services without inflating your costs.

It might open you up to new markets or give you access to a broader client base. We’ve teamed up with other agencies and freelancers in the past to handle overflow work or bring extra capabilities to a project. It helped us stay nimble and meant we could pivot more quickly when necessary

9. Think: How could this be the best thing that ever happened to us?

In times of crisis, it’s easy to be consumed by the negative. But these can be some of the most opportune times for growing market share and evolving your business. When everything is rosy, it’s easy to become fat and happy. Inefficiencies multiply.

Tougher trading conditions push us to innovate and refine our businesses in ways we might never have done otherwise. In 2008, we found new ways to deliver high-quality work more cost-effectively – making sure more value shone on the screen. This ended up shaping our approach and our identity to this day.

The question “How could this be the best thing that ever happened to us?” is a good one to ask because it forces you to look for the silver linings and adapt creatively. You will emerge with a leaner, stronger proposition and a talent-dense team that’s fired up to tackle whatever comes next

10. Act now

It’s easy to think that you need to wait to see how things will shake out. Action is an amazing antidote to the stress of running a business in times of challenge. Waiting a month or two just moves you further down the road, burning more important cash. Cash which could be the difference between your survival and your demise. If you act and things turn out to be not as bad as you thought, then you have still honed the business. And that’s always worth doing.