Employee benefits and retirement plan solutions Trends and Insights 4 ways one owner boosted her business resilience—and how you can, too

4 ways one owner boosted her business resilience—and how you can, too

Don’t panic or wait for a recession. Pivot and plan and help make your business stronger now.

A business owner stands inside her boutique floral shop where she has learned how  to run a more resilient business.

Better business resilience weighs on the minds of small and midsize business owners, with more than half of them already making changes in case a recession hits.1

Fortunately, there are plenty of ways to prepare for an economic downturn, says Nate Schelhaas, senior vice president and head of life protection solutions for Principal® .

“Build up some cash,” he says. “Establish a business line of credit in case you need it. Think about other ways to generate revenue that may not be your typical business model. Get to a spot where you clearly articulate your plans on paper.”

Here are four ways you can build business resilience in any industry—with examples from a business owner who’s done it herself.

1. Adapt and pivot instead of panic.

Avoiding rash decisions is one of the first rules of business resilience, says Kara Hoogensen, senior vice president of specialty benefits for Principal® . “Running a business is built on long-term strategy, not knee-jerk reactions,” she says.

Slowing down amid chaos is how Rachel Hunter, a Principal client, survived and thrived through two major economic downturns. She launched her floral studio, A florae, after the 2007–2009 Great Recession. By 2016 the shop in downtown Longmont, Colorado, had become her sole income.

“I threw all my time, focus, and energy into the business,” Hunter says. “For the first time in my life I believed not only in myself but also in the value of my talents.”

Hunter’s calendar was packed full of weddings and other events. But when the COVID-19 pandemic hit, scrapping large gatherings, she had to double down on her willpower and adaptability.

She didn’t panic. She just kept making thoughtful, deliberate pivots.

“You learn so much about yourself when you’re knocked down,” Hunter says.

2. Diversify your business revenue, but don’t flail.

Hunter’s initial expansion into retail beyond flowers (candles, cards, jewelry) was prompted by the frustration of living off her savings during the lean winter months with fewer weddings.

In late 2019 she began selling clothing—what would turn out to be a timely choice. When the pandemic hit in early 2020, she closed for a couple weeks and regrouped. By May she had reopened with health safeguards in place and an investment of $6,000 more in clothing on the racks.

Her pivot paid off: She generated five times the retail sales for Mother’s Day 2020 compared to the previous year. By the end of 2020, Hunter’s retail had surged 114%, helping to partially offset all the canceled weddings.

Hunter built on that investment in November 2020 when she leased a new, larger space and hired more people to help run it. She stayed true to her long-term strategy in her expansions, bringing a similar sense of style to her retail floor as she had to her floral designs.

3. Listen more closely to your customers.

Hunter’s pivots were less of a gamble because they were informed by customer research.

She assembled focus groups where customers wrote responses to 30 questions and then discussed their answers. When it came time for Hunter to stock her larger store, she harvested the accumulated input— including a product mix determined by the data. (Shoppers tend to spend the most money on blue jeans. They like solid colors.)

Hunter’s relocation also included the opening of a vintage thrift shop in the basement. Her customers had identified a niche: well-curated local secondhand clothing. That also exposed her floral services to more people.

She was down to $102 in available cash when she reopened her larger store but rang up $8,000 in sales within the first day.

4. Lean on trusted experts to help keep growing.

Business owners often are wired to try to do everything themselves, Schelhaas says, but that can lead to burnout.

“Build a community around you and your business—full of people who already have solved all kinds of problems,” he says.

One common challenge—and one thing 99% of business leaders agree on—is the importance of retaining key employees.1 Most businesses are maintaining or increasing employee benefits, knowing they rely on their talent to help navigate any volatility.1

Hunter is now focused on sharing the workload with her team while looking more holistically at her business and its place in the economy. She’s relying on a financial professional and other external specialists to help her plan her next growth phase in the business cycle—cultivating key employees, becoming more resilient, and offering employee benefits.

“Find a financial professional who knows how to connect you with the full range of employee benefits and knows which options are the right fit for your business,” Schelhaas says.

What's next?

Take the next steps to help grow your business at principal.com/benefits.