The Essential Entrepreneur, 2nd Edition

CHAPTER 15Tuning and restructuring

In business you need to be constantly watching the horizon as it's inevitable the market you're serving will change at some point, whether that's through government policy changes, technological changes, changes in trends or simply changes in people's needs. It's therefore super important to continually ‘tune’ your business to the market. If the market has undergone a fundamental change, you may need a significant restructure — and quickly — to preserve capital so that you live to play another day.

Market adaptability

There's an old saying: ‘Hire slow and fire fast’. Take the time to find the right people to create the culture you're after in your business (this should be a higher priority than skills alone). With people who are passionate about the business and its mission you'll be in a much stronger position to weather any storm. These people will pitch in to cover more of the load in difficult times. And it goes both ways: make sure you support your team when times are good as well.

Nevertheless, if the market undergoes a fundamental change, you may need to cut staff fast. This is an incredibly difficult task for entrepreneurs, who will likely have become very close to their team members and will always fight to save their jobs — sometimes at the detriment of the entire business.

Demonstrating market adaptability to your bankers will give them confidence in you, and they, in turn, will be more likely to provide temporary financial flexibility ...