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How to run a business during economic uncertainty

By Wade Foster · May 23, 2022
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Adversity is nothing new for most business owners. But there's a difference between running a business and running a business during a time of economic uncertainty. On top of the impostor syndrome, burnout, and nonstop push to deliver, there's now a chance of economic downturn and perhaps recession.

It's only been two years since we last had to face this kind of economic uncertainty, and folks are looking for answers. Let me start by saying: I don't have answers. But having run a business through the pandemic—and having seen so many of Zapier's customers do the same—I do have some insights into what we can do to weather this storm.

1. Focus on your customers

Focus on creating something that truly adds value for your customers—often, during a downturn, your customers will rely on you more than ever. Figure out how you can take even better care of them.

If you're not sure what your customers need right now, ask them. During the pandemic, Liz Morrow, a creative interior designer out of Tacoma, Washington, took to Instagram to ask folks what they'd like her help with. 

Letting your customers guide your crisis strategy ensures that you're providing products and services people want. It also allows you to continue to market and connect with your customers even if they're not making purchases then and there.

2. Automate

You might have to change, or even freeze, your hiring plans during an economic downturn, but that doesn't mean you have to halt your growth. Automation can help fill the gaps. This is especially important for small businesses that may not have the resources to compete with larger competitors.

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In fact, while businesses everywhere struggled during the pandemic, companies that used automation software were a lot more confident about their plans going forward. 74% of businesses surveyed in a 2021 survey said that automation helped them feel prepared to handle unexpected crises.

Some businesses, like The Perk coffee shop in Colorado and The Ruby Tap wine bar in Wisconsin, used automation to keep things running during the early days of the pandemic. By setting up a few automated workflows, they were able to develop an online ordering system and enable curbside pickup—without overwhelming already-exhausted front-line workers.

Automation can also free up your existing team to do more (like taking care of those customers). Identify the repetitive tasks that folks are doing, and then assign those tasks to the computers, so humans can focus on what matters most. At Zapier, one of our values is "Don't be a robot, build the robot." It allows us to make the most of every team member's time, which is good for the business and for the people inside it.

3. Cut the red tape

Bigger businesses can learn a lot from freelancers—folks who don't get paid unless they're actively producing. As Zapier has scaled from a three-person startup to over 600 employees in about a decade, I've seen how hard it can be to stay lean as you grow. Processes can become bloated, approval workflows can get convoluted, and you might end up talking about work more than actually doing work.

It's cliched, but it's true: done is better than perfect.

You need to prioritize effectiveness and impact over perfection and precision. When things are going well, you might not notice inefficiencies, but when every dollar matters, so does every second. Encourage your team to default to action so that you're making the most of the one resource you have complete control over: your own time.

4. Work together

When there's economic uncertainty, it's more important than ever to support your partners and rely on them to support you too.

Early in the pandemic, City Home, a home decor and design business out of Portland, Oregon, partnered with a local florist to offer an incentive to customers: three City Home customers received a surprise bouquet from local florist Old Town Florist with their delivery. For City Home, the promotion served as an incentive to purchase. But Old Town Florist benefited too: it was a new marketing channel, targeting customers who had a vested interest in home decor and would be likely to purchase flowers to brighten a room.

When customers are cutting back, they want to be sure they're getting the biggest bang for their buck, so working with other businesses to serve your shared customers is a win-win. It will also help you build deep relationships that'll still be there when the crisis is over.

5. Read the tea leaves

Leadership development advisor and Zapier customer L. Michelle Smith shared with us one simple but overlooked tactic for navigating uncertainty.

"I learned that looking at what was happening with other companies in the headlines was a great way to anticipate what could be next."

Read the headlines or, even better, talk to your fellow entrepreneurs and see what's happening to other folks—and how they're responding. You're unlikely to be the only business of your kind to fare differently. So, as Michelle puts it, "read the tea leaves."

Large corporations like Meta, Netflix, and Amazon, among plenty of others, are reacting to the current market by canceling events, instituting hiring freezes, and in some cases, laying off large numbers of employees. It's scary to acknowledge it, but ignore reality at your own peril.

6. Create a contingency plan 

When the pandemic started, Michelle also devised contingencies. She knew that she couldn't rely on just one line of business, so she brainstormed what else she could offer her customers: what would they need at this specific moment in time? Diversifying her offerings was what helped her adapt and thrive through the uncertainty.

Jacob Edwards-Bytom, the director of eCommerce at Made4Fighters, agrees: "Your business should never be dependent on one customer, one product, or one location. Just like you wouldn't want to invest your life savings in a single stock, your company shouldn't take that approach either."

Some businesses will even pivot completely—that's what Michael Alexis did when his business lost almost $3 million in revenue overnight in March 2020. But even if you don't end up with a complete pivot, you'll need to be flexible and get creative with your business plans.

7. Focus on leadership

Michael is one of Zapier's long-time customers, and after his pivot, he wrote on our blog about "how to lead your team through the fiery pits of economic doom." I'll pass the mic:

I'm still learning what it means to lead well through a pandemic, massive economic fluctuations, and everything else that comes along with it. I want to share some of what I've learned.

First, commit to patience, listening, and understanding. Even on the best days, you don't have the entire picture of what your staff is feeling, or what is affecting their performance and decision-making. During a period of rapid transition, assume best intentions and support your people as people.

Next, take action on your gratitude. Your people choose to work with you, and you are fortunate for every minute of attention and effort. In addition to being grateful, find ways to show your gratitude. We have a #you-are-awesome channel in Slack to shower team members with praise, and we also give surprise bonuses, raise pay as we can, and tell the team we appreciate them often.

Next, be willing to do the work. Leading from the front lines is one of the strongest ways to show your people the work they do matters. Get involved with marketing, sales, operations, and every other department where you can make a meaningful contribution. Work absurd hours if you have to, and definitely do it before you ask anyone else to.

Finally, operate at level 10 integrity. If the market shift is large enough, then your team, your suppliers, your competitors, and their families and communities are all working through it too. Continue to operate with integrity, put in the time to do things right, and don't cut corners. Your legacy goes beyond the weeks, months, or years of a crisis: it lasts forever."

During any crisis, people look to their leaders for how to react, how to make decisions, and how to power through. Managing through a crisis will never be easy, but it's your responsibility to lead your people with empathy.

We don't know what's coming our way over the next few weeks and months, but it's likely to have a lasting impact on lots of businesses and the folks they serve. Now's the time to acknowledge the uncertainty—and start doing something about it.

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