“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Charles Darwin wrote the quote above talking about animal evolution, but he may as well have been talking about business. The businesses that excel and thrive over time are not the strongest or smartest, but the most adaptable ones.
Even if you’re not in a seasonal industry, you’ll face good years and bad years. Being prepared is essential. How can you keep things as stable as possible but still make your company resilient when it comes to ebbs and flows? Let’s take a look.
Keep An Eye on the Big Picture
You probably have an overall vision for your business and know what you hope to achieve in the future. Unfortunately, when the market takes a downturn, it’s easy to panic and focus too much on solving immediate problems, leading you to lose sight of your long-term goals.
You may even overreact to the down cycle and give up too soon. Instead, keep your eyes on your larger vision even when the market fluctuates. You’ll be able to stay level-headed and keep your business on course.
Save Money in Good Times
If you have a great year — or five — it can be tempting to take the extra income and spend it on growing or improving your business. That’s wise, but only to an extent. You want to ensure you also put aside money to get you through slower times as well.
Keeping a buffer of several months of expenses is a great way to weather the ups and downs of any market. Then, if things slow down, you have the cash to get you through until you can take advantage of new opportunities. This is especially important for businesses in a seasonal industry. You need to be ready for peaks — say, the winter holidays — and save money for the slower months.
See Opportunities in Any Circumstance
Most ebbs and flows in business are temporary. Sometimes, though, the change is more long-lasting. When you’ve weathered a shift for more than six months, it’s time to start adapting. That doesn’t mean you should throw away your business model and start over. It simply means you should look for new opportunities in the changes that have taken place.
During the pandemic in 2020, gyms weren’t able to operate. But, rather than throw in the towel, they saw a new opportunity and began to offer online fitness classes. Online classes cost less for consumers, but they had far fewer expenses for gyms. That means the profit margin on online classes was higher than their everyday business.
By adapting to change and avoiding common mistakes, you, too, can bounce back from anything.
Stay Connected to Your Target Audience
One thing that may cause a significant change in your business is a long-term or permanent shift in consumer behavior. Many of these shifts happen slowly over time, but companies are still caught off-guard.
Blockbuster Video operated in pretty much the same way from 1985 to its peak in the late ’90s. They excelled because their barcode system allowed them to carry a much wider range of titles than any competitor. And, of course, charge late fees.
But things shifted. Cable television allowed people to watch more for free, including movies. Technology allowed Netflix to send DVDs by mail with no late fees, a service people loved. Blockbuster had the opportunity to buy Netflix but passed — missing the change in how their customers were consuming movies. Within a few years, Blockbuster’s profits began to dwindle, and by 2010 they filed for bankruptcy.
Don’t make the same mistake. Instead, keep a finger on the pulse of your target customer market and use analytics to make sure you’re aware of any changes — fast or slow — in how they’re approaching your industry. Just because something works well today doesn’t mean it will be lucrative forever.
Are You Ready for Change?
Ebbs and flows in business are normal, but it can be easy to overreact. By following the tips above, you’ll be well-positioned to weather any storm and take advantage of great business cycles. When you do, you’ll be more profitable and successful, no matter what the market does!