Proven ways to set your business up for success ahead of a recession
As the guiding light of The Entourage, Australia’s largest business coaching provider, Jack Delosa navigated his biggest career challenge in 2016 when the government cut back on funding for students – a decision that forced the founder to make drastic changes in order to survive.
"We were three months away from losing A$900,000 [US$622,900] a month and we had to go from 90 people down to 40 people, which we had to do in a matter of days," he explains. "It was a torturous process to go through, particularly, when you’ve got a culture like ours."
Three years later the entrepreneur and investor recalls that the business was more profitable than ever despite these enormous setbacks. And, while the COVID-19 pandemic presented its own obstacles, Delosa has become well versed at overcoming any business challenge that crosses his path.
With a member base close to 500,000 and contributing more than US$1.4 billion to these businesses, The Entourage is highly competent at recognising a company’s core constraints and helping it to become more profitable.
"The fundamental thing to understand is that recessions are good for businesses," Delosa affirms. "Recessions are good for business owners because it’s never about what’s going on out there. It’s always about what’s going on in here and how well are you strategising and how well are you executing?" he shares.
Challenging economic environments can act as catalysts, prompting business leaders to focus their attention on aspects that were previously pushed under the carpet, which are now taken more seriously.
With the right strategy and execution Delosa has helped businesses triple their revenue when the reality couldn’t look any bleaker.
Delosa’s tips for navigating challenging times
Some of the biggest concerns of business owners at this time, according to the entrepreneur, is a desire for their company to grow at a faster pace while not having to wear multiple hats that can lead to fatigue and burnout.
The customer is king
Regardless of whether your business is online or offline, or a combination of both, Delosa encourages every business to intimately understand the hearts and minds of its customers at each stage of the customer journey.
"If you’re adopting a strategy that’s more online driven, the best thing you can do is develop an empathy map for your customer," he suggests.
Once you’ve gained an understanding of this it becomes easier to tailor your communication and your product or service in response to the customer’s frustrations, desires and needs at a particular moment in time.
All growth is sales and marketing led
The next step is to place a greater emphasis on revenue generating activities by being proactive in your approach towards marketing and sales.
"There’s a misconception with business owners that if my product is great, if I care about my customers, my business will grow exponentially. That’s not what happens," Delosa says.
Delegate to elevate
With surplus revenue, the possibilities to invest in a team that can take care of operational matters creates space for the founder to focus on fulfilling their highest potential.
"When you build a marketing engine that can generate leads without you being operationally involved, and you build a sales process that you can train and delegate others on. Well, now you can market and sell without the founder being operationally involved," Delosa points out.
This is a critical step in transitioning from a business operator to a business owner who leads rather than performs every task which can create a culture that is overly dependent on the founder.
Think like an entrepreneur
While pivoting has become a bit of a cliche in today’s world, it speaks to the entrepreneurial mindset that is needed in order to adapt to changes in the external environment.
"It’s about how well do we pivot to the changes that are going on around us? That’s the art, that’s the skill of the entrepreneur," Delosa argues.
The classic example are the bricks and mortar businesses that were either forced to close their doors during the pandemic or execute an alternative strategy that could increase their revenue beyond what they thought was possible.
Hire great people
A great culture becomes self-fulfilling with a clearly defined vision, mission and values that unites staff as well as filling senior roles with the best talent, who embody this.
"When you start to bring on senior people who are exceptional at what they do, put them in charge of your recruitment because the people that they hire will be exceptional at what they do," he explains.