This past summer, Rick Bisio wrote an article for Entrepreneur.com about the economic impacts of 2020. He mentions that in June, a quarter of the workforce filed for unemployment, 40 million people total. We have seen businesses close their doors. However, we have also seen them adapt. The challenge was finding a way to make consumers feel safe, so they continued to support your business. 

During the pandemic, many people felt isolated and scared for the future. In the article, Bisio cited the quote, “Those who cannot learn from history are doomed to repeat it." So, he looked into history to answer the uncertainties we all faced. He then compared today’s challenges to the Great Recession we encountered only a decade ago.

At one point, the Great Recession was the most prominent economic downturn we faced in our lifetimes. Unemployment rates took several more years to balance, making people wonder what will happen after the pandemic. 

Tips for Franchise Success

What are the long-term financial and physical effects of the pandemic? Unfortunately, we still don’t know what else to expect from the pandemic’s effects or how long its impacts will last. However, Bisio says there are five lessons we can take away from the recession that are still relevant today and could help business owners adapt to today’s climate.

• Transform your customer base.

Consider diversifying your customer base as we would you stock portfolio. A diverse customer base reduces business risk just as a diverse investment portfolio mitigates investment risk. If we put all our eggs in one basket, we run the danger of losing our investment.

By making sure we have a spectrum of different customers, we can earn a diversified income. Your service should apply to people involved in various industries with diverse interests to ensure that your business should survive if some customers leave. 

• Establish an effective strategy.

The businesses that survived the recession had strong operating systems. A strong foundation and strategy is the key to success. You need to establish an effective plan or surround your business with people who use the best practices.

Weaker franchisees and mom-and-pop businesses without solid operating systems had a lower survival rate during the recession. Those with sturdy internal organizations typically survived. 

• Preserve your Cash.

Cash can give your business more control during an economic downturn. Some franchisees go into debt to get into business. While this can be an effective strategy, it is vital to start paying off debt as soon as you have revenue. 

During the recession, many business owners who were over leveraged faced bankruptcy. Reducing your debt load can help your business survive and have a cushion during economic downturns. 

• Play a few steps ahead. 

Franchisees should never get too comfortable and expect everything to operate smoothly. Even though we can’t predict the future, we know it will be different than the present. So, an effective business strategy is to remain adaptable, think about the future, and continue to change with the times.

Even the best business practices continue to develop and improve over time. There will come a moment when one approach will no longer serve you in the current market. Be prepared for change by making a contingency plan. 

Business owners facing challenges today can find optimism in that situations improve over time. The downturns pass, and the economy picks back up. 

• See challenge as an opportunity.

Finally, Bisio reminds us to take this challenge as an opportunity to make your franchise business stronger.

To learn more about lessons from the recession that still apply today, click here to read the full article. If you are interested in learning more about franchise opportunities, don’t hesitate to utilize our services. 

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