All businesses will face a crisis periodically, and some will come through with a determination to succeed and others will fold in failure by Gary Shotton #000290
By Gary Shotton
Hello, my name is Gary Shotton. I’m here as a part of Inspiring Better Business. Today we’re going to talk about the word “Crisis”. As we enter into business a lot of people that are not knowing say and think that business is going to be a steady climb up you start at the bottom and you just progressively go up a step every year and everything works fine up till maybe 3040 years. That’s not reality. In reality, things go up and down, up and down in an erratic fashion. Normally there’s going to be some form of crisis involved with your business. At first, you can think I hope I never have a crisis but there’s really a reality that there’s a value in going and having a crisis because that gives you a chance to tackle that and come through it on the other side. On this climb up, it’s going to be a series of events that are sometimes plateaus of good but many times you come to a point and there’s going to be a crisis. There’s going to be times when you’re just totally unexpected.
What do you do when you have a crisis?
I’m going to read from a book here you’ll know if you listened very long that I’m not a very avid reader but I do read biographies. In this book called bread-and-butter is about the founders of a franchise here in town called great harvest breath. On page 42 it says this “I realize businesses are like relationships they aren’t really worth much until you have endured their first good crisis”. Think about that. Any relationship you’ve had especially one that leads to marriage is that close of a relationship. If everything is perfect everyone’s dressed nicely, you go out to dinner every night, everyone smells good, everyone has the right look, the right car and everything that’s not reality. I would be suggesting just a little bit of marital advice here that if you’re considering marriage and you still have that chance you want to see how your spouse handles things when things don’t go well. When there is a crisis it says here again on page 42, “Until a business has been tested no one can really be sure if it will last”. Let me rephrase that; “If you want a business that lasts you will feel a track record of issues that surface that are considered crisis”. I know this that most business banks do not loan money until you’ve been in business three years minimum. They’d like to see seven years really, if you’re going to get some real money it’s got to be several years in. Or you can borrow money when they ask that like if you have a hundred-thousand-dollar piece of equipment and you want to borrow like twenty thousand dollars. To buy the hundred thousand there’s plenty of equity there. So, they’ll probably give you that loan but when they’re going to reach out and risk something it’s because they have seen you come through a crisis. If we’re looking at this situation when I talk about growing step by step if you could say that a little bit differently at every step you would grow to that level stay at that level, work through the systems and processes, research everything we’re talking about on our website, work through it at that level. Then also hopefully have some kind of a crisis that you can come through and overcome that crisis really. Overcoming that crisis actually gives you the fortitude and the ability to grow to the next level or go to the next step now. I’m going to mention four strong crises in my life so I’m not talking about theory. So, you’re going to want to come through these situations that are building character in your life, building stamina in your life, the ability to come through analyze a situation when it’s not going well, and then succeed through that to the next level.
So, I’m going to give you four different situations where I had a crisis, how what happened, and then I’m going to give you some tips on how that you might look at a crisis and get through it.
- I was just getting started some thirty-five years ago in a trucking company where we move furniture. At that moment I had two trucks both old and both paid cash so I didn’t have a loan on them but they were not really good trucks. One of them was out on a job away from my shop and they called in and they said something’s wrong with the carburetor, and it won’t start and won’t run. Now I don’t have money for the tow bill. So, I decide I will send out my other smaller truck with a chain and pull that bigger truck in so that I don’t at least have a tow bill. Then I can get the mechanic to work on it back at my place of business. So, we do that and I pull back in. At that time I didn’t really have a business location, it was my house and I had a bigger yard. I made the mistake of pulling into an area that was soft and it had been raining and that smaller vehicle doing the towing got stuck. Now it’s stuck in the mud so trying to get it out I’m trying to rock it back and forth and I burn up the clutch. So, here’s the picture, here’s a crisis I’m just getting started and I have two vehicles both of them are down, both of them need to be repaired and both of them are out of service. I have a crisis and I wanted to quit. It was so discouraging.
- Later on, a few years later I’m doing better I buy my first brand new truck. It was going to go over the road specially designed for my business. With the anticipation that the drivers that have been with me are the ones going to operate and drive that truck, they are going to be a part of that since they helped me pick the truck. So, I’m thinking they are getting so excited about driving for me; but two weeks before the new truck arrives these people tell me I quit. I’m giving my two weeks’ notice about the time my new truck comes. I’m thinking they’re going to drive, they’re going to be gone and by the way, they go to work for one of my competitors. By the way, they didn’t know anything about the moving business when they started so I trained them with everything they know and they left me high and dry. That’s a crisis.
- Now in my current business, I’m getting started, I’m more experienced, I have a bigger business, I have more equipment, I buy my first piece of equipment about a half a million dollars. Now I don’t write a check for 1/2 million, I get a loan. In fact, I get a loan with no money down and it’s going to be paid in increments every month for five years. We get our new operator on that a brand-new piece of equipment and they make a miscalculation, a Miss entry in the computer. I now have a brand-new piece of equipment that’s been crashed. It’s been destroyed and I’m going to have $25,000 to fix my brand-new machine before I even put my first job on it. That’s a crisis.
- This crisis for me is the daddy of all daddies, as far as I’m concerned. I’m three years into my new business. I have lots of loans, I have lots of payments and we have the economy drop way out of sight. It’s so bad that I go from 65 employees down to 24. I have to fire 41 employees because of lack of work and I have loans like crazy I am in trouble.
I think I made it through all of those. I made it through all of those with a new sense of confidence, a new sense of accomplishment and I’m ready to tackle a bigger crisis when it comes now.
Here are a few tips.
- When you’re facing a crisis it’s not a time to expand. Some people are thinking well if I just get bigger I’m in trouble, but I just get bigger I surely will get better. My experience has been it’s time to trim it’s like a patch of strawberries in the strawberry patch. You trim back some of the blossoms so you have a bigger product. In this case, in most cases, it’s not a time to expand trim back in that last case when there’s a total economic downturn. I too brought my core people together, I asked them to buy in with me I told them we’re going to get through this together. I asked are you in? Are you willing to do anything that needs to? They’re all in because they’re good and their job counts on it too. We cut back every single unnecessary expense that there possibly was. I’ll just give a funny little one. We had paper towels you know you washed your hands in the bathroom you got a paper towel and you wipe it and put it in the trash. I had every day seemed like I had a whole bin full of paper towels. We discontinued that even to today. We wash our little hand clothes and everybody has their own hand cloth with their name on it. You use your own clock hand cloth every day until it’s dirty and then you go get another one and put the dirty one in the washing machine. We cut back everything. Every piece of paper, every pencil we bought, everything we did we cut back. Cut back on your expenses and don’t expand and believe God, that you’re going to get through this with every skillset that you have.
- I would always look for the end in sight. Where can I see the end? I can tell again with the big one, that I was anticipating being in an economic crisis for three or four years. Normally there’s a swing and up and down of your businesses. It doesn’t cycle out that fast, but I think due to technology and due to some things of the cycles are like shorter together. So, this crisis came on really fast but in one year that crisis was basically over. The orders start coming back in but I was kind of locked-in thinking this is going to take at least three years. So, I conserved every piece of cash and I held on to all the cash I can have in order to make it through what I thought would be a three-year cycle. Only when I saw the cycle end, when the business was kind of come back up that I started loosening my grip on the cash I had.
Those are two tips I think that’ll help you that if you’re in crisis you have a way out.
I didn’t stop my generosity to my church. I didn’t stop my giving to missions. That’s my personal choice. I believe those things along with an ultimate trust in God that he would bring me the wisdom. God never sends me money, he sends me wisdom. My prayer was for wisdom. James chapter one talks about if any person lacks wisdom let him ask of God and God will give it to that person myself liberally. He guided me. Now I had to take the steps. He didn’t tell me what to do but he gave me the facts information that I could make choices consistent with good results. I hope this helps where there is a part of inspiring better business. We’re going to have crises. You’re going to have a crisis and actually, you want that to some degree. If you look take smaller steps the crisis will be of less intensity normally, but there are things that are going to be outside your control; Somebody quits unexpectedly, the economy dips unexpectedly. You could be doing everything perfect and a crisis can come your way you’ve got to be able to get through it and go to the next level.
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