1. Set aside an emergency fund.
Emergency funds can save your business from going down completely should an unexpected market change happen before you could see it coming. You must have a cash buffer to protect your business in dire times.
Although it can be difficult to put away money (especially if your company is still growing and needs all the cash it can get), you must not neglect this point. Aim to have an emergency fund that will keep you going for six months to a year, at the minimum.
2. Identify new markets you could expand into.
If you’ve got your brokerage focused on only one market, you’re more likely to be negatively affected on a deep level. For that reason, you don’t want to put all your eggs into one basket.
Instead, diversify your business and find new markets that you could tap into. For example, if you have specialized in FHA lending, look to Non-QM possibilities. Or, if you’re active in a limited geography, look for opportunities by expanding your lending footprint.
Entering new markets is also an excellent way to grow your small business and give yourself a competitive advantage.
3. Don’t stop innovating.
Small business owners know that innovation keeps them alive and thriving among the competition. If you want to prepare for sudden market changes, innovation is a core element to focus on.
Your business must never stand still; it must be ever-changing and evolving. Listen to your clients and find new ways to do business in a way that keeps them satisfied and coming back for more. Can you start selling your services through social media platforms like Facebook, Instagram, and Pinterest? Or, can you build a website that changes the way you sell?
Get creative and think outside the box.
4. Take care of staff health.
Your staff is what carries your business, and you must keep their health in mind. Make sure you give your workers a good work/life balance. Your business should never be the reason why your employees are unhappy or unhealthy.
Happy workers will be more productive and loyal, improving not only sales and customer relationships, but helping your business thrive so market changes won’t affect it as fundamentally. On the other hand, it has been proven that poor health can make employees unhappy, which will negatively affect their productivity.
5. Keep costs low.
Cutting costs will help you set aside an emergency fund and keep your business’s cash flow going if market changes start suddenly.
There are several ways to keep costs low, like expanding your website’s functionality with an order form to reduce the amount of work staff need to do on phones. You could also consider taking small business loans only with low-interest rates, limiting excessive marketing investments, and using the right business software and tools.
Additionally, you can limit your focus to only the most important things: providing excellent products and dedicated customer service.
6. Create a contingency plan.
Last, but not least, be prepared for the worst and embrace the risk. Plan for disappointing and difficult cash flows and sales dry spells. Don’t give up when things get challenging, and prepare contingency plans. Will you lower prices? Seek new customers? Try new marketing tactics?
Your plan depends on your unique business and circumstances, so make sure you keep yourself and your employees in mind.
Sudden market changes don’t have to be scary. Unexpected market changes can be stressful for small business owners, but now that you know how to prepare for them, you can keep calm and rest assured your business will survive. Remember: always plan ahead, never stop innovating, and look for business opportunities.