Business owners are facing a challenging period. The current crisis differs in kind from prior downturns. In the past, trimming operating costs a bit and waiting it out could suffice; today, it may be necessary to spend more, even in a highly unstable, unpredictable climate, with no sure path to success. An entrepreneur must act like a precise surgeon, removing the diseased parts while ensuring the patient remains healthy enough to continue.
chaotically emotional responses cannot be reduced, because every acute economic crisis strikes not only the wallet but also the mindset of leaders. Reactions to external threats often feel irrational. A design office might stop ordering toner for professional printers, halting work as teams scramble to print drafts before client meetings. A publishing house may replace human translators with machine output, then rely on cheap copywriters for lithographic work, leading to halted book production. A resort hotel might cut back on booking systems, even loyal guests stay away.
The correct action framework unfolds as follows.
Step 1. Calmly and realistically measure the income decline, free from hopes, fears, or doubts. The drop can be sharper than previous levels.
Step 2. Assess the true costs needed to cover that revenue.
Step 3. The gap between income and maintenance costs must cover the main business expenses and the owner’s fair return.
At times, it is wiser to elevate certain costs rather than shrink them. In crises, cutting spending can undermine the system rather than stabilize it. Consider a familiar life scenario: losing a job may prompt cheaper purchases, skipped taxi rides, or reduced caregiving. Yet the priority remains to find new employment and restore income.
In business, investments may be required to launch new lines that replace those that have suffered. If a small commercial property owner greatly trims operating costs by turning off heating, reducing cleaning, and removing air conditioning, customers will vanish. Conversely, discovering a fresh concept, upgrading the interior and exterior, or investing in advertising with influencers can attract a new tenant base. Some owners leave their positions and relocate; others acquire manufacturing facilities and retool.
Never stop paying dividends.
Small and medium enterprises rely on the owner’s energy. A mandatory return to the owner is a natural law. When this is neglected, the business ecology suffers. A company that fails to provide fair dividends risks becoming a fragile entity.
It is often misunderstood that owners are merely self-serving opportunists. In truth, many are deeply engaged in building the business, financially and emotionally. They invest personal funds and become deeply connected with their enterprise.
In one region, a thermal underwear producer thrived for years, offering gear for fishermen, hunters, and retirees. Each new line sold out quickly. Over time, orders shifted to cheaper producers in China. Retail chains cared about price more than quality or local interests. The owner began to cut wages and delay investments, and dividends were not paid. The outcome was painful: the business slowed, workers suffered, and the owner faced heavy losses.
The opposite approach, investing in a new product, raising prices, and reversing a negative market trend, yields far better results. The worst path is indecision or a premature exit. If closure happens, timing and execution matter; a well-timed exit can leave room to start anew, create jobs, and contribute to the public good.
It is essential to remember that reducing costs, whether chaotic or careful, imposes a heavy burden. Impulsive cuts can fray nerves, waste resources, and slow growth. Careful planning and disciplined analysis are required to pursue the best path. The aim is to avoid pretending the backlog of problems does not exist.
This perspective reflects a personal view and may differ from other positions.