4 Crisis-Proofing Lessons for Small Business Owners
A crisis is not all-together bad, it helps us think deeper, stretch our imagination, restructure our organizations, and discern the real needs of our business.
We have all had to re-invent our approach to business in the wake of the crisis created by the Covid-19 pandemic. But we have learned during the pandemic that crisis is not all-together bad. Crisis helps us think deeper, stretch our imagination, restructure our organizations, and discern the real needs of our business.
But how do we, as business owners, crisis-proof our business? We may not be able to stop the crisis from coming, but our business can cope with it better when that crisis does arrive.
Avoid false advertising
Many small businesses constantly grapple with the crisis of customer defection or a consistent inability to attract and keep new customers. The problem is often with their marketing strategy.
A leisurely scroll through your timeline on social media will expose you to a myriad of ads from small and medium-sized businesses all vying for your attention. In many of these ads, you will find one nasty feature; false advertising. While these ads promise astonishing freebies or cut-price deals, the reality behind often reveals something totally different.
I once received mail from an advertising business I had almost patronized. It read, “I noticed you stopped short of making the purchase. Hey, I know the ad was a bit deceptive but...” Needless to say, that put me off from the business.
One key feature of Forex trading is the risk factor. It is one of the most glaring features of the market, so glaring that Donald Trump’s Covid-19 diagnosis caused quite a stir. Every serious-minded Forex trader, trainer, or broker reveals the nature of risk involved in trading while advertising their services or teaching their courses.
My early foray into Forex trading brought me in contact with FxBro, a sibling run Forex trading community where they were so vocal about the risks of trading Forex that it almost seemed like it was their marketing strategy.
However, I noticed I was drawn to Maksim and Nina Konstantinov's strategy (Fx Bro Co-founders), because their clear warnings made me appreciate even further their offer of guidance.
While taking advantage of PPC campaigns and ad marketing that social media provides, you must realize that building a loyal following does not involve sacrificing the truth on the altar of appeal.
It is pertinent that you market nothing beyond what you can offer, and though you must engage your creativity in marketing, you must also draw the line just before creativity begins to drift into dishonesty.
In co-founder of Fxbro Maksim Konstantinov’s words, “When we fall downstream, we always say it loud and explain to our customers that even after the 15 years experience I have garnered trading Forex, we can still make losses and so would they”. Konstantinov finds that having begun from scratch himself and experiencing all the downturns, it is great to always be clear about the risks while advertising.
This is the attitude that marketers should have across the board and is one of the most powerful ways to avert the crisis of customer defection.
Spin the wheel, don’t reinvent it
Two years ago, I served on the panel for a grant-issuing body for upcoming African entrepreneurs. As I sat on that panel, I discovered that almost 90% of those who were unsuccessful were failing because they were trying hard to reinvent the wheel. They were trying to run a business that was novel in every single aspect. Their crisis was a "lack-of capital," and it was self-engineered.
Granted, innovation and invention are generally good for business, but they are not always necessary, especially when there already exists verified working systems that are yielding massive results in your industry.
Forex trading platforms realize that many people are not going to sit down to study the technicalities of the market, so to enable the largest number of people to invest, they have to integrate a “Mirror Trading System."
Alex Campbell, Chief Executive Officer of Vast Triumph, in explaining their “mirror trading” and AI strategies that have been used to great effect, explained it as “a system that minimizes the need for vast knowledge and experience of the market. Mirror trading pairs investors and new traders with our top-earning traders, yielding results for investors without the exertion of personal trading."
No system guarantees success, but if you can find working, proven systems for your business to adopt, I often advocate the “Ctrl C, Ctrl V” approach. There is no shame in copying working systems. Given the same circumstances, there is no reason they won’t work for you.
Upcoming entrepreneurs can stand out with their company culture, values, and mission, but when it comes to business strategy, learn what works and spin the wheel. When you insist on constantly treading uncharted waters you are easily prone to unforeseen errors.
Protect today with yesterday
My first attempt at trading the Forex market saw me obliterate a $300 account in one day. It hurt, and I learned. Crises are unavoidable in business, but if you are keen on documenting your experiences and adjusting your business to become resistant to that same crisis, you’ll win in the long term.
The human body becomes more and more immune to the diseases it has survived before, Hurricane-prone areas of the state begin to re-imagine its infrastructure to withstand such a harsh climate.
Likewise, in Forex, every successful firm or trader has a “trading journal,” where they document all their moves in the market to further understand how it moves and reacts.
For small business owners, it is necessary to know that to become crisis-proof, you may have to cherish and document all wrong business steps as well as the right ones. Not moaning over losses and failures is the best way to understand business and, more specifically, your industry.
Nothing you read in books will prepare you for the business experience you gain firsthand, so write your own books by keeping records, and make sure your business evolves with this knowledge.
Balanced risk-reward ratio
The question I get asked often from young entrepreneurs is “How do I maximize profit?" This question is vital, but becomes a bit worrying when I see these businesses trying a little too hard to make money from every margin in their business.
Often, profit maximization can become the direct opposite of customer satisfaction. Small businesses must be satisfied with bearing a lot of risks. To do this, you would have to find a balance between profit and risk.
This place of balance is a place where you do not overextend yourself as a business, yet offer the customers enough satisfaction to warrant their continued investment.
In currency trading, a trade is considered bad when the risk far outweighs the profit potential, and a trade is safe to engage in when the risk-reward ratio is at least balanced. This is an invaluable tool for all successful currency traders and firms: risk management.
To prevent a crisis, you need to become analytical, patient, alert, balanced, truthful, and customer-centered. This makes it far easier to evolve positively as a business and grow a thicker skin in the wake of a crisis.
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