The crisis hits many entrepreneurs hard. A sudden drop in demand of 30% or more. Responding quickly is a must for survival. Where possible, costs are immediately reduced and cash is king. Customers are cherished and all creativity is used to generate extra turnover.
But how far does your creativity go? You keep doing what you always did and what you are good at; what you were so successful with until recently? What people know and value about your company? Will you stick to the stategy or will you radically change course under pressure?
Need to change?
First of all, take a good look if you really need to change. Is your company able to survive despite less demand for your products or services? Keep in mind that current government support are temporary and partly mean a shift in costs. After that you really have to be able to stand on your own two feet again.
Try to estimate as fair as possible how your market will develop in the slightly longer term. Super difficult at this time! So work out a few scenarios and think about the consequences for your company.
Change is necessary!
Many entrepreneurs have to choose a change of course. To generate sufficient cash in the short term. Or to have a right to exist in the slightly longer term in a market that we had not thought possible two months ago.
It is inspiring to organize a creative brainstorm with others. Of course in the short term and in a limited time box; after all, something must be done quickly! My tip is to go back to good old Ansoff with its growth matrix. This is still a great way to discuss a few variants and ultimately make your choice:
1. You remain active in your current market with your current product. For example, you are going to deliver your product in a slightly different way. Think of providing an online training instead of in class. Or have your meals delivered instead of served in the restaurant. This variant is the least risky, but the question is whether this will offer enough new opportunities for your company.
2. You are going to sell your current product in new markets. A secondment company of software developers active in the travel industry is now seeing demand drop. The same software developers may still be desirable in a different sector, with companies that work with the same software. This variant can be an attractive solution, but it does require the right contacts in the market. And are not all kinds of other competitors going to consider the same step?
3. Maybe you should decide to stick to your current clients and market. Build on your good relationships with them. But then come up with a completely different product or service. A good example of this are the online shops that are rapidly expanding their range. In addition, they offer (temporarily) very different products that their customers are looking for nowadays.
4. Finally, the most radical variant in which you choose to focus on a new market with a new product. Obviously, this is the most risky variant and often also requires the largest investments. Look at TryLikes and Harver. In a few weeks, they came with a device to help companies keep the 1.5 meter distance between visitors and employees.
While brainstorming, many ideas will come to your mind, helped by the four variants of Ansoff. Try to map out the best results for each idea. On what term is causes effect. How much investment it takes. What it does to the image of your company. What about the competition. After you have put the pluses and minuses of a number of fresh ideas together, you make your choice and it is time for action.