To say that the COVID-19 pandemic and ensuing economic crisis has created immense challenges for entrepreneurs and business owners is an understatement. Like the 2007 to 2009 economic collapse, the downturn happened so quickly. Both have been compared to the Great Depression in its catastrophic impact, but that’s where the similarities end.
This is my second financial downturn, and the lessons I learned from growing my business during the Great Recession have prepared me to be a better leader in this current crisis – a time when companies must radically pivot to keep their businesses viable and employees must reexamine their roles in a rapidly evolving workplace.
There are very few industries that haven’t been severely impacted by the pandemic. Among those hit hardest have been transportation, sports, entertainment, retail and restaurants. Earlier this summer, for example, United Airlines announced it could be laying off or furloughing up to half of its workforce—a staggering 36,000 employees—this fall, and an ESPN analysis projects that sports leagues will lose $ 12 billion in revenue. Experts predict that it will be a matter of years before businesses recover to pre-pandemic benchmarks.
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Leading during times of uncertainty
In 2007, I was in my mid-20s and a small-time developer. I saw many major players get wiped out and learned just how quickly things could go bad. But in the aftermath, I developed several principals and strategies for succeeding after a downturn. I learned the necessity of being proactive so I could be best positioned to take what the world had to give as the business climate improved.
In business, the fundamentals still apply in good times, but especially in bad times.
If you are an entrepreneur just now staring out, it’s essential that your business fills a basic need with its product or service.
Also, do not set your goals too low. Consider all of your ideas and laser focus on one or two that may not be the easiest to get done but will have the biggest payoff when they do.
One of the most important things you can do is to stay motivated and not just settle for returning to the status quo once the pandemic has passed. A key question you should be asking yourself is, “How will I come out of this downturn and set myself up for more growth?”
You need to develop a proactive mentality. It is never easy to make a change or to reinvent yourself (I’ve been recreating myself all my life!), but now is an ideal time to take stock. Is your company growing? How are you continuing to manage this current crisis?
I strongly recommend that you lean on your employee base. This is their time to shine, to step up and participate. We pick our employees because they are passionate self-starters. They have been conditioned to thrive during hard times, because out of a downturn comes opportunities for huge growth.
The best investment you can make in this time of uncertainty is to hire good people. The current crisis is part of the story you tell about where your company is now and where it is going to be. Investors want to hear how you will meet the new demands of a changing world.
If there is anything that 2020 has reminded us, it is that you cannot and must not freeze up. If you do, the world passes by. That was my takeaway from 2008. At that time, many people could not operate or make a decision, but I aggressively bought apartments. I knew that people were being foreclosed on and would have to rent, meaning rentals were a great place to invest. I am operating under the same mentality today.
Above all, the utmost responsibility of an entrepreneur, especially in a downturn, is to communicate that everything is going to be fine. This hit home for me when I tested positive for COVID-19. I presented a calm and positive attitude across the board, even when I was experiencing fears. You cannot just pray for the downturn to go away. At the peak, when everybody was concerned about the effects of the pandemic, I considered it important to keep a level head and lead with a positive message. Your employees, investors, and especially your family, need reassurance that you have faith in your business plan, vision and ultimately, yourself.
Leading in times of uncertainty is all about persistence. So, how will you react?
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