Introduction (00:00:00)
Surviving tough financial times requires more than just cutting costs. It demands proactive leadership, smart financial strategies, and a clear plan to keep your team focused and thriving.
So let's dive into how you can lead with confidence when cash flow is tight. That is coming up next.
Welcome to the Chris LoCurto show, where we discuss leadership and life and discover that business is what you do, not who you are.
Welcome to the show, folks. I hope you're having a fabulous day wherever you are.
Today we are tackling a critical topic for every leader and every business owner, and that is how to lead your team and business effectively during tough financial times.
Now, I know right now a lot of folks are experiencing some of those tough financial times, and a lot of people are very hopeful that we're gonna see some changes here very soon.
And I tend to agree that we're gonna see some good changes. But a big. But there. A big. However, let me say we're not sure. We don't know. We're very hopeful.
But should we be waiting for the government to fix us, to take care of us? No, absolutely not. Plus, there is so much that you need to understand as far as even companies in great economic times that fail miserably.
So we're going to get into some of that information today as we talk through how you can lead your team through a difficult financial time and stay afloat.
The Importance of Financial Discipline Before Hard Times Hit (00:01:50)
First key point that I want to mention is the importance of financial discipline before. Before hard times hit, folks, I cannot tell you the number of conversations because I couldn't count them at this point.
I couldn't tell you the number of conversations I've had where people had major hubris and even ego that they didn't have to worry about whether or not financial times were going to be difficult.
Right. Because they're doing so good. They're on top of it. Everything's going so well. And then we get into difficult financial times and it wrecks them. It affects them terribly. Right?
I've had multiple times that I have experienced. Not only. I've had tons of conversations on the front side. And then those people that come to me afterwards and go, please help, because, yeah, this, this hurt. This is bad.
It is a large number of conversations. It's not one or two or ten. It's a lot. And I hate it. That's the major reason why we're talking about this today is because I know a lot of companies are tight right now.
A lot of companies are doing well, doing good, but finances can be tight. I've been there multiple times in my 30 years of doing stuff like this, I've been there.
I know what it's like. I've experienced it. The key is the first thing you've got to get rid of is any ego, any hubris. And by hubris, what I mean is, is that your ego is, you know, overconfidence.
We're so good, we're so amazing. Hubris is not the same. For me, hubris is the, hey, things have been going really well. I think everything's going to continue to go really well.
It's this, this almost naivete of that. Things can tank at any minute, right? Things can turn because things have been going so strongly. So the first thing you have to do is get rid of that.
You've got to get yourself in a place where you realize it's just smart to be in a place where you're prepared for things to go wrong. And what if they don't? Great. You're in a fantastic financial situation.
But what if they do? And that's what we're talking about today.
On top of all of this, for all of you believers out there, for those of you that believe in God and understand that God definitely uses his love, his long suffering to grow us and draw us to him, there are also times that he allows difficulty in suffering to bring us even closer to him than we are.
So what I'm meaning by that is the fear of the Lord is the beginning of wisdom. If you understand that he is in control of everything and at any time he can do something he wants to, then you will be prepared or at least you will understand the importance of being prepared.
If you are questioning what I'm saying, feel free to go read the Book of Job and it should put you on the right path.
Here's some things I wanted to share with you. According to Yahoo Finance, I'm so glad Yahoo's still out there. Didn't know that they really were. This is a recent study, I believe, that is last year.
Financial preparedness significantly influences the survival and resilience of small businesses during challenging times. Studies indicate that a substantial number of small businesses face financial difficulties due to inadequate planning.
Chris, I don't have to worry about that. Everything's going well, Chris. We've got money in the bank. Everything's going well. Nothing's going to happen to my vendors.
Nothing's going to happen to my clients and their businesses or whatever, their personal finances. I'm great. Everything's fine. Small businesses face financial difficulties due to inadequate planning.
For instance, in 2022, 53% of small business owners resorted to using personal funds to address business financial challenges. I will tell you it's higher than that number.
I believe it is higher that number. I believe that there's more people that had to resort to their personal finances. Another statistic says the survival rate of small businesses are closely linked to their financial health.
Data from the US Bureau of Labor Statistics reveals that approximately 24.2% of small businesses fail within their first year, with the failure rate increasing to 48.5% by the fifth year and 65.1% by the tenth year.
These statistics underscore the importance of financial resilience in ensuring long term business continuity. Moreover, the absence of an emergency fund or financial contingency plan can be detrimental.
Reports suggest that 40% of businesses do not reopen following a disaster and an additional 25% fail within one year of such events. Folks, this highlights the critical role of being proactive financially in planning to mitigate any types of risks that could possibly happen.
How important that is, you have to be in a place where you're thinking smartly, that you're preparing ahead, that you know that bad things can happen and you're getting yourself prepared for it.
Please don't be somebody who just believes that there's no way anything bad can happen, because it can. So here's the deal.
Businesses with retained earnings, businesses with strong financial habits such as saving, you know, during profitable periods, putting some of that money back, they are better prepared to handle tough times.
You need to know that your best defense against any financial struggles is a good offense. You need to manage your money wisely and you need to build a financial cushion.
Oh, but Chris, always the all buts, right? Chris, you don't understand. I never seem to understand. I've been doing this for decades, teaching people for decades, helping people out of mistakes for decades. And yet I never seem to understand, right?
I do understand. I understand all you men, because women are more likely to have that security where they will hold back some because they know that bad times can come.
But men, we're just too smart. We're just too smart for our own good. Chris, do you know what I could do with that money instead of putting it in savings and just letting it sit there, I can make more business happen.
I hear you, I hear you. But if you listen to the statistics that I shared, you would understand that wisdom says grow a little bit slower, put that money aside, hold it, keep it for a rainy day.
You never know what's going to come upon the Land, as scripture says, put that money aside, right? Because you don't know what's going to happen. And then as you continue with profits, use that to grow your business, slow your roll.
I'm telling you, I know you've got great ideas and I know you could take the money and in your mind, you can do better with it if you used it right now, there's so much growth we could do.
Okay, listen, listen to the stats. Listen to how many businesses do not come back because they were not prepared.
Managing Finances During Tight Times (00:09:50)
Second thing you need to focus on is managing finances during tight times.
So when you get into difficult times, if you're, let's say you're there now, or you didn't do a good job preparing and you didn't have enough money, or even if you do, it's still vitally important for you to manage well during difficult and tight times, right?
So one of the most important things you want to do is you want to take a hard look at your P & L.
You need to identify critical things versus non essential expenses. Now, as I get into this, I have a huge caveat that I want you to hear me say. Just because financial times are tight doesn't mean you cut every expense.
Now, that tends to be the choice of many people. They go through and they cut all kinds of things and they don't realize that there's certain things that they needed to keep.
There are certain things that were helping them during those times.
So for me, I am all about you going through and eliminating unnecessary subscriptions, going through with your vendors and trying to renegotiate some of the contracts you might have, seeing if you can save, you know, thousands of dollars every month while you maintain all of your essential operations.
Here's what I don't want you to do. I don't want you to go after things that actually are making you money, growing you, helping you.
And cut those things because they appear to be something that, yes, you're paying this money out, but you haven't spent a really good amount of time going through and asking yourself the question, is this helping or hurting during this time?
That's a big thing. That's a big piece of the puzzle, right? Cut the things that aren't helping you. Cut the things that are luxury items, cut the things that are subscriptions you really don't need.
But don't cut a subscription that you do need. Don't take away something that's helping you and growing you.
What you'll find is, is that if you cut the things that don't seem essential, but you haven't really looked into it. It will probably come back and bite you in the butt.
Look at the stuff you don't need. Look at the stuff that are luxury items. As somebody who is a coach, you know, we have a business that leads people to success.
I can tell you there are times that we've had to look at stuff and go, let's get rid of this, get rid of this, get rid of this. Don't touch that over there. That's important.
You know, training that we're having. Times that we're spending money on something that is actually increasing what we're doing. But if you just looked at it from a P & L standpoint, you might go, that's unnecessary.
Why do we think it's unnecessary? Or prove it to me that it's unnecessary or prove it to me that it is necessary. Either way, I don't care. Dig in. Be smart.
Get rid of the stuff that is not critical. Get rid of the stuff that is luxury. Focus on the things that are essential, but make sure you dig in and find out what's what, right? Focus on what's helping you generate revenue and sustain the business.
So if you are in a difficult time and you have got a great sales coach who is helping your sales team to put more numbers up, this would be the wrong time.
I mean, unless you're just paying stupid amounts of money to them, if your sales team's not out selling the spend on the sales coach, we probably have a problem.
But, you know, if you've got somebody who's helping your team along to do better, keep plugging away. Get rid of the stuff you don't need.
Optimizing Your Sales and Marketing Teams (00:13:37)
Number three, make sure that you are optimizing your sales and your marketing teams or individuals, whatever, that you have.
So you really, really need to dig in and ensure that your sales team is well trained and that you're capitalizing on every possible lead and every possible opportunity.
Folks, this is the time I can tell you I have been there in the past.I have had hubris in the past where I'm like, oh, gosh, you know, we-- we've been selling so well and we're telling people we can't get with them for so long into the future.
And it was just something that I hated to make, you know, have my sales team tell people we can't meet with you until, you know, a year out or so. I've had that time where I'm like, okay, we're doing so well, we can back off of stuff.
No, you cannot. No, you cannot. I've been there. Where when we go to we, you know, you turn off the faucet, you got to turn it back on, and there is nothing, not even a drip. Right.
And it takes a while for you to build all that back. Don't make that mistake. Make sure. Yes, we're still getting good sales. That's great. Dig in even deeper. Well, Chris, shouldn't I do that when the times are good?
Yes, you should. You really should. But a lot of folks don't. When the numbers are black on the bottom line, people are like, hey, things are great. It's only when they're red that they actually start digging in.
Yes. I'm suggesting that when times are good, dig into your sales team, dig into your marketing team. Right? But if you're in tight times, you absolutely need to get in and make sure that they are spending time on every opportunity.
Now, let me rephrase it. Let me not say every opportunity. Make sure that we understand what are the best opportunities and which ones are not so that we're not going after, you know, we're not spending an hour trying to get a sale off of something that's a bad lead.
You know, make. Go through and define what's a good lead and what's not a good leader, what's our, you know, what's our greatest opportunities and what's our least opportunities, and start with those greatest opportunities and hit every single one.
But something that I've helped clients in the last couple of years our team has helped is they are going through a financially difficult time and they pull an admin in from a different area that actually starts going through some of the lower level leads and can work them in a different way.
Sending out emails, sending out texts, whatever you've got. They can work them in a different way and try and prepare some of those leads for the sales team.
Why is that important? Because what you might find is that somebody that's probably getting paid, you know, less in an admin role can go through and spend that time preparing leads for a salesperson, and you just might pull out a good percentage of leads.
I know many clients that have done that. Right. They've spent that time. So you've got a salesperson who needs to be focused on the highest level leads, the best opportunities.
We don't want to lose out on those, but we also don't want to lose out on some of the lesser quality leads because there's sales in there. We just have to work harder.
So you could bring somebody in who is probably, you know, possibly twiddling their thumbs or not focusing on something as important during a financial crisis and get them in there, work those leads.
You know, even if it's just initial phone calls, just to see, is this something that we can get over to a salesperson or to somebody in marketing.
Another thing is, is make sure that you are investing in, you know, I just talked about sales coaching. I think it's smart. I think it's incredibly important.
You need to improve your closing rates. You need to take a look at how well you're doing and you need to turn some of those previously missed opportunities into revenue into money. You need to find out. So, man, our team is closing.
Good. Our team is closing 8% of the leads. What would happen if they closed 2 more percent, right? What if they just took it to 10? That's 25% increase, folks.
What if it was just even 1% better? And that came because you got some quality coaching, smart things to do. So don't overlook your revenue generating teams.
Make sure that you're optimizing their performance. Make sure that you're doing everything you can to sustain cash flow.
Same thing on the marketing side. Make sure you're, you're digging into seeing where money is going. Is it having an effect? Is it bringing your revenue? Is it, you know, is it smart spending?
Enhancing Operational Efficiency (00:18:20)
So number four, make sure that you're enhancing your operational efficiency. Folks, even though my suggestion is always going to be do this in the good times, sometimes in the good times we're hustling so well.
We don't spend time to do this. Make sure that you're going through and streamlining all of your processes.
Make sure that you're looking for inefficiencies that can be addressed right now without, you know, major expense or, or address things that might be creating, they might be major expenses.
Go through and streamline what you're doing. How can you do it faster? How can you do it better? How can you do it with more efficiency? Right? Is there things that you can automate?
Are there repetitive tasks that you can automate that if you did it, it frees up team members so that they can focus on higher value things. Now as I say that, you're probably going, if I could streamline it, I could get rid of a team member.
That's not the direction I'm going in. The direction I'm going in is if you could streamline it and automate it, could you put that person on something more important like I just talked about maybe supporting the sales team so that we could get more revenue in the door.
So take a look around, make sure that you're evaluating everything. Make sure that you're getting team members on the most high value activities. Make sure that you're increasing your overall productivity.
The better efficiency is absolutely going to reduce stress on the entire team and it's going to improve your financial performance, period. It has to. Right? You're being more efficient.
Staying Calm and Making Better Decisions Under Pressure (00:19:59)
Number five, you got to stay calm and you have to make better decisions under pressure.
Listen, I cannot say this enough. When you freak, you freeze. When you freak, you freeze. Folks, when times are tough, your team is looking to you for guidance. Your team is looking to you for stability.
And a leader who regularly communicates and updates and helps people to see the decisions that are being made helps reduce uncertainty. It helps keep morale high.
It helps keep team members, you know, plugging along because they're not freaking out themselves.
If they see that you're not freaking out, then it helps them to realize, hey, yes, times are tough, but just keep plugging away. It's when they see you or other leaders or owners freaking out that it tanks their productivity.
I remember, gosh, so long ago, a leader who did such a good job, you know, keeping morale up when things were going well.
I watched that leader literally just tear apart team members because the leader was stressed out and tear apart aspects of, of sales teams because the leader was stressed out, because times were tough.
It got difficult. Guess what happened? People left. People left. People got stressed out. People felt like, well, apparently you don't care as much about me. You care about the money.
Think about how you communicate to your team when things are tough. Do they understand that you're behind them, that you're not freaking out, that you are not more concerned with the dollar than the team members.
When you were appearing to care greatly about the team members. Right? They need to know that you still care about them. It's okay to share that you're stressed. It's okay to share that you struggle.
But how you lead them after that is vitally important. That is something we are big on in our company is saying, hey, guys, here's the situation, here's our concerns, or here's what we're worried about. But this is what we're going to do. We're going to keep doing this.
We're going to change this here. We're going to keep moving forward. We're not, we're not freaking out. We're not worried. We are very aware that God is in control.
So we're going to keep plugging away and doing what we do. When team members hear that, it really helps them to settle down and keep plugging away. Don't be the person who freaks out.
And next thing you know, your team is all freaked out and they don't know how to respond or they start looking for other jobs because they're afraid that it's a sinking ship. Right.
Stressful times call for clear, thoughtful decision making, open communication, showing that you care. Right. Showing that you're not afraid. Those are the types of things that help your team to absolutely plug away.
Action Items (00:23:16)
So things you need to do. First off, you've got to audit your financials. Make sure that you're reviewing your P & L. Make sure that you're identifying areas for immediate improvement. Make sure that you're looking for places for savings.
Right. Evaluate your team's performance. Ensure that the sales and marketing teams are operating at peak effectiveness. You know, there's. This is not the time for anybody sitting on their hands.
Number three, make sure that you're streamlining operations that you're. That you look for ways to increase efficiency without cutting corners. Number four, make sure that you're communicating clearly.
Keep your team informed about the situation and the plans to navigate through it.
Number five, plan for the future. Use tough times as learning opportunity to build a more resilient team. Now, here's some things I want you to do.
Additional Resources (00:24:01)
There's two episodes I'd love for you to go listen to. The first one is episode 363, which is Smart Money Decisions During A Crisis.
And the Second one is 364. Yes, back to back Handling Fear and Preparing for the Future. So those are two big things that you need to go and listen to that will help you to make better decisions.
All right, folks, we've come to the end of another amazing episode, but before we wrap up, I want to share something that could take everything we've talked about today to the next level.
Next-Level Leadership LIVE Event 2025 (00:24:30)
So if you're a business owner or leader who loves what you do, but you feel overwhelmed by all of the responsibilities, then the Next-Level Leadership LIVE Event is for you. This event is happening April 2nd to the 4th, and it is packed with tools and strategies.
You need to lead your business with confidence and get your life back. Let's be real. Leading a business shouldn't mean that you are the busiest person in the room.
You deserve to step back to trust your team and still see your business thrive at the Next-Level Leadership LIVE Event, we're going to show you exactly how to make that happen.
You're going to learn how to lead smarter, not harder, giving your team the tools that they need to set them up so you don't have to do it at all.
You're going to find balance. What is it like to get practical tips to lead at work and at home without sacrificing your personal time?
Also, you're going to be a part of a very supportive community of like minded leaders and business owners who actually understand the challenges that you're facing and are ready to share their experiences as well.
These are people who've been there or are there. And they're people who have great advice, not your cousin Frank who's never owned a business.
And it's constantly telling you everything you need to do. Here's the best part. You walk away with actionable steps that you can put into place. The moment you get back, there's no more guessing what to do next.
You'll have a clear plan for your business and your life. Now, I know some of you are thinking, oh man, I don't have time for this. But here's the truth. If you keep running yourself ragged, burnout is inevitable.
Invest a few days in yourself and your business will benefit for years to come. So join us at the next level Leadership Live Event 2025. Registration is open, so head on over to chrislocurto.com/liveevents.
That's chrislocurto.com/liveevents to learn more and secure your spot, folks. Don't wait until you're too burned out to fix the problem. Well, folks, that's all the time that we have for today.
I hope that this has been really good information for you. I hope this helps you to get yourself prepared. Yes. Are we all hoping that times are going to get a little bit better? Sure. Am I holding my breath? Nope.
I'm prepared. My team's prepared. We know exactly what we're doing, what we would change, how we would adjust. So as always, take this information. Change your leadership, change your business, change your life and join us on the next episode.
