Getty
Sometimes a strategic retreat isn’t a retreat at all. It’s a smart business strategy.
I’m thinking of scalability — the premise that if you add more revenue streams and invest in your business, you’ll make more money. It’s a canny, necessary business strategy, of course, taught in business schools around the world. It’s what all businesses do to grow. But there are times in your life, whether you’re facing a global pandemic or a personal problem, when you might ask yourself, “Is now a good time to scale up?”
The answer might be no. But it also might be yes.
In my business, as the CEO of a property management franchise, obviously, I want to tell anybody I come in contact with that it’s a good time to build their business. If you have one franchise, you should purchase a second, and if you have two, it’s time to invest in a third. If real estate is your thing, you want me to tell you that you should buy up more properties. And maybe you should. But maybe you shouldn’t.
And, no, I’m not hedging my bets. Whatever you do, don’t make it all about the pandemic. The novel coronavirus is a serious, terrible threat to our health and the economy, but it’s also simply a new obstacle in a new normal. The old rules of scalability still apply. You shouldn’t base your decision to scale up or remain frozen in place based on current events or fear. You should make that decision based on how you feel and the current health of your business. So, before you make any rash decisions about scalability, I’d suggest looking at several factors.
Your Portfolio Inventory
What are you working on right now? The world has changed a lot lately, and some of the projects you were going to do obviously have been put on hold. But have you put them on hold, or have circumstances? After all, the world hasn’t stopped spinning. People are still getting married, although they may be livestreaming their wedding or putting it on Zoom. Moms are giving birth, though home births are going up. And people are still moving.
My point is, we’re still living our lives. You need to live yours. Some business plans you made and put on hold may be on hold simply because you’re assuming you can’t keep growing your business. And that assumption may be wrong.
Or it might be right. But take a good look at your portfolio and get a sense of what initiatives or goals you set that may no longer be relevant — and focus your energy to work on the ones that still are.
Your Strategy
Do you have a strategy? Has it changed since the pandemic began and all of the sheltering in place started? Or do you still have the same strategy prepandemic?
There’s no question that the coronavirus has infected the economy and made things tough or next to impossible for a lot of businesses. For instance, I wouldn’t want to own a bowling alley right now. Still, that isn’t to say a bowling alley business owner shouldn’t be working on a going-forward strategy right now. Sixty-seven million Americans bowl at least one game a year. A lot of those bowlers are going to want to return to the sport.
But while I might not be excited about owning a bowling alley, I am far more optimistic for property owners in general. People will always need a place to live and work. Yes, it’s a tough time. If you’re a landlord, you possibly have some tenants struggling to pay rent. For some landlords, with less in funds coming in and cash flow going amok, this may not be the time to expand, whereas for other property managers, in areas of the country that haven’t been hit as bad, or with tenants who simply haven’t been put out of work, this might be a good time — or it might be a great time — to cautiously expand.
But your strategy to deal with this new normal is important. If you aren’t continually tinkering with your strategy, it’s impossible to know if you should embrace scalability or lay low for now.
Your Mental Energy
A lot of us are sheltering in place with our families. You can be forgiven for being exhausted. I know a lot of people joke about having more time than ever; it may be that you’re thinking, extra time? What are you talking about? I’m working harder than ever.
That’s where it can be very smart to not scale up. Sometimes, you just … can’t. Or shouldn’t. And it may be far better and smarter to work on improving the properties that you do own and maintain. After all, business growth never comes because you’re managing properties badly. It comes from managing them well, so well that the profits are coming in, hand over fist, and the profit margins are widening, and thus you have the money to invest in an expansion.
On the other hand (there’s always another side to every argument), sometimes taking on new projects and going a little outside of your comfort zone can be exactly what does give you energy. So, I would argue that if you feel you can’t scale up, don’t, listen to your brain and body. But at the same time, think about and research the projects you would like to take on.
Doing a little research can’t hurt, and if you find yourself getting excited about growing a certain aspect of your business, you may realize that growing your business will pull you out of your exhaustion.
So, if you feel that now isn’t the time to expand and grow your business, keep doing what you’re doing. But try to do it even better. That’s ultimately the key to opening new doors.