611 | Managing Crisis with Confidence: Strategies for Small Business Leaders

Introduction (00:00:00)

Today's episode is all about managing a crisis with confidence. Get ready to learn actionable strategies to navigate challenges and lead with clarity. 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.

Welcome to the show, folks. I hope you're having a fabulous day wherever you are. Today's episode is all about managing crisis with confidence.

Now we're going to explore some strategies to kind of help you run a smart, a sound, a disciplined business that can weather any storm.

Now, whether it's cash flow crunch or a reputation issue or losing key, key team members, the crazy thing is crisis most likely is inevitable.

Unfortunately, you're probably going to have some time that you face crisis, but with the right tools and the right mindset, you can not only navigate them successfully, but you can also emerge stronger on the other side.

So let's dive into five key strategies that you can use to manage crisis with confidence.

Build a Resilient Business Before Crisis Hits (00:01:24)

First thing you need to do, this is a big must. You must build a resilient business before crisis hits. Now, the best way to manage a crisis is to be prepared for it way before it ever happens.

A disciplined business and a disciplined business foundation can help you weather pretty much any storm that you're ever going to experience.

So some things that you need to do. Now, last episode we talked about how to run your business through a financial crisis. Today, the first example is about your finances as well.

And it doesn't mean that your crisis has to be a financial one, let's say, I mean, which it would technically be the result of some other type of crisis if you had a reputation issue.

Let's say something happened and you put out a bad product and you know, you got tons of people that are complaining about it.

Obviously that's going to now become a financial crisis. But the issue wasn't a financial crisis, it was a product issue. Right?

So what you need to start with, if you're going to prepare yourself for any possible crisis, one of the first things you need to do, this is a must. You have got to have an emergency fund, folks.

You have got to have emergency going to tell you six months, half a year's worth of expenses.

Now listen to me, don't panic on this. Oh my gosh, that's such a huge number. No, listen to me. Expenses that you would cover if no sales came in the door.

I was telling this to a couple of gals, geez, a long time ago, 16 years ago or so that you know saying this. And they owned a concrete company. They're like, do you know how much money we spend in six months?

I'm like, if you didn't have any sales, you wouldn't be spending any money on creating concrete. And they're like, oh, okay. Yeah. Well, then that's a. That's a heck of a lot smaller number.

Yeah, of course it is. That's the point. If you don't have any sales coming in, what are the things that you need to cover? When. When Co-vid hit, we didn't change anybody's payroll. We didn't.

You know, we kept paying people, knowing that if it continued for a much longer period, we had contingencies, things that we were gonna do, things that we were gonna have to change.

However, we had money in place, so we were ready for the crisis, and it was okay. We were fine. Did we take a big hit? Sure, we took a big hit. But after not even maybe about six months, things came right back to where they needed to be.

A lot of our clients came back a heck of a lot sooner than that. So make sure that you've got that money set aside in case something goes wrong.

Another thing you need to do is you need to make sure that all of your processes and systems are documented, right? Make sure that they are in place so that everything can run smoothly no matter what.

If a crisis, you know, attacks your business, if something happens, it might take you away.

My wife and I have had a couple of crises lately. One of the biggest ones being, you know, handling a mother with Alzheimer's and how fast things have adjusted and changed.

And because our team operates so smoothly anyways, nothing has changed. Everything has been fantastic. Now we've had to work around my schedule on things that I'm doing and having to handle and take care of, but it hasn't affected the way that the team operates.

Another big piece you need to do in preparedness is you need to train your team on emergency protocols. You know, what happens? How do we communicate?

You know, do we do role adjustments? Again, going back to 2020, when Co-vid hit, we had certain people in roles that were like, well, you're actually not needed in this role right now. Instead, you're needed somewhere else. And we made some adjustments.

And funny thing is, is that one of the adjustments that we made became a permanent adjustment even when things came back, because that person was better in the other role.

So make sure that your team understands, hey, if things go crazy, here's some things we're going to put in place here's. Some protocols to put in place.

Here's some ways that we're going to communicate or things that we're going to communicate about just so that everybody is ready and everybody understands what's going on.

So when you've built that resilience into your team, then you can absolutely reduce the chaos that is going to come with a crisis.

Identify the Crisis and Stay Grounded (00:06:07)

Number two, identify the crisis and stay grounded. So we've got ourselves prepared in a few areas now we're here. What's the crisis? Not all crisis are created equal, if you will.

So to manage effectively, you need to first identify what type of crisis you're dealing with and avoid knee jerk reactions.

I have seen so many leaders, so many business owners as well that freak out because a crisis hit only to find out the crisis wasn't a crisis. So it's important to, to make sure, is this a legitimate crisis?

And if it is, let's not make knee jerk reactions, let's not make knee jerk decisions. We've got to stay strong, stay tight, stay, you know, make, stay focused on what it is that we're doing and how we're going to handle this thing.

First thing is, what if it's a cash flow crisis?

So if there is a sudden drop in revenue and it requires obviously immediate, you know, expense reviews and probably renegotiations, you know, vendor terms, all that kind of stuff.

Then jump in and handle it, sit down and go through exactly what you need to look at, what you need to adjust, what you need to change, who you need to talk to.

Well, Chris, I don't think that my vendors are going to work with me if I'm going through a financial crisis myself. How do you know if you haven't asked? You don't know.

And I can tell you, many people are pleasantly surprised when they dig in and find out that a vendor is, you know, absolutely willing to possibly renegotiate or even just carry them for a while until, you know, you might have a vendor that has a heart.

Hopefully you do. If you do, then you might have the right kind of person that's in a position to be able to help you during your, you know, your financial crisis.

So again, don't knee jerk, don't go ballistic, don't find a new vendor, you know, dig in and find out, hey, can this vendor work with me? Right? What if it is a reputation crisis? Well, negative press or, you know, customer complaints on a, on a product or service.

They may need a public relations management and if you don't have internal processes for that or you know, something that you can evaluate on how to handle that kind of stuff.

You may need to look outside quickly, you may need to do something quickly. Right? At bare minimum, what I would do is have, you know, if you can find a PR firm that you can create a relationship with or a PR person, we just happen to have a built in one on our team.

But if, if you can find somebody to say, hey, if things ever do go wrong, I'd like to, you know, get with you quickly and start to solve stuff. Most people don't ever think about that.

Most people don't ever worry about that. And then this is where that hubris kicks in. You know, we can be very confident that we're never going to run into a situation like that.

And then you do, and then when you do, man, how are you going to handle it? All right, what are you going to do about that? So make sure that you stay grounded.

Make sure that you're leaning into trusted advisors. Always, you know, get wise counsel for the love. Get wise count people who know who can speak into your situation and they can help you, you know, make sure that you're staying grounded with your leadership team.

Make sure that you're staying grounded with your, your values, your core values. Don't let go of those. It is amazing how much a crisis, you know, you can, you can see the integrity of a person because of the crisis that they're in.

I don't know who said it, but I'm probably going to mess this up anyways. But you know, if you want to see the leadership capability of a person, put them into a crisis.

I'm pretty sure I just screwed that up or just came up with a new one. There you go, Chris LoCurto.

Communicate Clearly and Quickly (00:10:13)

So number three, key point, number three, communicate clearly and quickly.

Now let me just say the caveat to quickly is make sure that you understand how to clearly communicate before you go after it quickly. In any crisis, communication can make or break your efforts. So you've got to keep your team, you've got to keep your clients.

If you have stakeholders, then you've got to keep them informed with clarity and confidence. But don't communicate if you don't know what you're communicating about.

Don't allow this to be a knee jerk situation. Right? Gain information, gain insight. We talked about it in the previous point. Make sure that you have identified the situation and then make sure that you communicate.

And folks, please, all my High Ss and Cs out there as well, everybody listen to me, communicate quickly. Give the best information you can. Quickly.

If you think, if you take the position that all this thing's just gonna, you know, this is going to go away naturally, I can sweep this under the rug. It's going to write itself on its own.

What you're going to find is this thing is going to pummel you. So get communication out quickly. And you do not have to be a hundred percent certain.

In fact, you can be, hey, here's the situation. We are working on this. We're trying to figure it all out. We don't have all the information, so here's the decisions we're making at this time, right?

But communicate and do it quickly. Identify it. Communicate quickly. So some things you need to think about internal communication. What does it look like daily? Yes, yes, yes, yes. What does it look like daily?

To brief your team, especially your leadership team. The leadership team should be briefed every single day on the situation.

Even if it's just a two minute, hey, nothing's really happened, nothing's changed, you know, we're still in the same spot, or, hey, this one little thing changed over here.

But make sure that you're, you're talking to your leadership team daily. Definitely weekly briefings are a must. You've got to address your team.

You've got to give them updates. You've got to align their actions to the situation. Right. What are we doing? How are we resolving this? All of those pieces need to be communicated quickly.

Now, what about your clients? Well, I think you should send out timely updates to clients. Now I will say this is one. Don't communicate too terribly quickly if you don't know what you're talking about, because you can panic clients and then find out later it was no big deal.

Some people say, well, I'd rather communicate well to the client and let them know, yes, I'm 100% with you as long as you have the right information.

If you give bad information to the client, you will panic the living daylights out of the client. And then when you find out it wasn't what you thought it was, you've really kind of put that negative impact there.

So it makes it difficult to kind of come back from that because it's, it's already built in now, you know, maybe unless, I mean, if it's somebody that you've got great relationships with, totally different.

But I'm talking about your clients as a whole. So definitely communicate to them. When you have the right information, make sure that you're reassuring them of the steps that you are taking.

To maintain quality service to them. You know, nothing is changing here. Or we're doing this because something was bad or something was wrong. Here's where we are, here's what we're doing. Make sure that they understand that.

We have got a farm, The Ridge, where we've got a team that handles things up there. And we had a situation with, we do everything. Pasture raised, everything is clean.

No bad ingredients, no seed oils, no corn, no soy, no junk, no nothing. I mean, the way that God intended it. And we had a situation where we had our cow delivered a baby, her little baby, and she got mastitis immediately.

Wasn't anything that we did wrong. It's something that can happen from time to time with a new birth. And we had to quickly let all the clients know.

And we're very clear, we're very open. Hey, here's exactly the situation. There's no hiding. There's no point in it. That's kind of stupid, right? So we're very clear with all of our clients, hey, this is what happened, and here's what we're doing to solve it.

Here's every step. Here's the products that we're using that are clean, that are, you know, not chemical, and here's what we're going to do. This is probably going to last us about a week.

And we were hoping it would last three days. I think it lasted five days. Every single client was so glad to hear that. I'm not. I didn't have anything to do with this. My wife handled all this.

The team handled all this. But they did such a good job communicating. And, you know, the concern for the team was, are we going to lose clients?

You know, they're not going to get their. Their milk within, you know, a week. Are we going to lose them? People came back so strong, saying, we will wait however long it takes. We love your stuff, and it's healing our families, and so it's worth it.

The great thing is, is we didn't try and hide it, nor would we. We're just not those types of people. But sometimes people try to make that decision, well, what if we just don't say anything yet?

What if, what if? What if? Don't let that bite you in the butt. Clearly communicate to your clients, and with as much vulnerability as you can, as much information as you can.

You know, that just happens to be one of the things for us we're very clear about. And the great thing is, is that there was no negative impact whatsoever. Not one.

Now, if you have stakeholders, you are going to have to get to them quickly. You're going to have to share actionable insights. You're know, here's what's going on.

Make sure that your investors are board members see absolute transparency so that they can maintain trust during this situation.

Right? The last thing you want if you've got stakeholders is some level of lack of trust. So clear communication builds trust. It prevents misinformation.

It keeps team members from being scared and feeling like they've got to run. It keeps clients from feeling scared like they've got to run. It keeps you from compounding the problem.

Create a Step-by-Step Action Plan (00:16:48)

So number four, create a step by step action plan. So yes, you may have discovered some actions already, but here's what you need to do.

You need to sit down and create a step by step, break down the entire crisis. Put it into manageable pieces. Develop an action plan that addresses the immediate, the short term and the long term needs immediate, short term and long term.

So some examples for the immediate address the root cause, what is the thing? You know, if it's a cash flow issue, then make sure that you delay any non essential spending.

Make sure that you're prioritizing revenue growth, you know, revenue generating activities. Focus on the things that you have to do right now. Solve this stuff right now.

I am not saying don't pay your bills unless you can't pay your bills. But I am saying if there's stuff that you don't have to pay right this second, you know, once again, you might have stuff you can work out with vendors.

Great. In the short term, make sure that you're assigning roles to your team. You know, if you have one person focus on client relations, then have another person focus on operations and so on and so forth.

Whatever it takes, get people in the right roles for the moment. As I said when we went through Co-vid, I let some of my team members, it was only like two or three at best team members that we had to adjust some roles on.

We clearly communicated, hey listen, this isn't forever, you know, unless we no longer ever do events again. This is for now. And funny thing is is that it turned out for one of them it became, you know, their permanent role for the long term.

Build safeguards to prevent the same thing from occurring. You've heard me say we have a five step process of solving things.

What happened? How did it happen? Why did it happen? How do we fix it? How do we make sure it never happens again? So put things in place so this doesn't happen again.

If it was an issue with a team member and you didn't have a strong enough hiring process, change your hiring process, right? If it's an issue with bad cash flow because you're not paying attention to your P & L, you're not doing a 12 month rolling forecast.

If you're not doing the things that you need, fix it. Get with somebody who can help you to do those things. We would be glad to help, but you got to do something about it, right?

So make sure that you've got a plan that helps you to lead with clarity and focus. Especially during chaotic times, immediate short term and long term.

Reflect, Learn, and Strengthen (00:19:29)

Key point number five, Reflect, learn and strengthen.

Folks. Every single event that we do, whether it is the Next-Level Leadership LIVE Event, whether it is a StratPlan, a Next-level Life, whatever it is, we have a discussion on how did everything go?

Now, obviously we're not sharing people's personal information, but we talk about how the event went, how did it go? Do we need to change anything? Can we fix anything? This is huge.

Our retreats, our Mastermind retreats that we do, we do three of those a year plus the Next-Level Leadership LIVE Event. Every single one of those, we have a pre meeting and a post meeting.

Tearing it apart, finding out what went well, what went wrong, you know, is there anything new? Is there anything we need to change? Anything we need to fix? All of those pieces of information are powerful.

Those are the kind of insights you need so that you can improve your events if you do offense. So let me just change it to improve your leadership, improve your business, the operations, whatever it is.

Make sure that you are reflecting on the crisis, make sure that you're learning from the crisis and you're using the reflections and the learnings to strengthen your team, to strengthen your leadership, to strengthen your business, all of that.

So like I say, we, we conduct a, a, a post event debrief. You could call this a post crisis debrief with your team, right? Identify lessons that we've learned.

Use that opportunity to ask the team, what did they learn? You're probably going to see some things from a different perspective that you hadn't even thought about. Allow them to speak into it as they speak into it. Take notes, learn from it.

What do we do differently? How do we fix this stuff, right? Use those things to improve your business. Also make sure that you're adjusting processes to better handle any type of similar situations in the future.

You know, this could happen again, hopefully not, or something like it could happen in the future. Make sure that you're adjusting processes so that you catch that. Also super important, celebrate with your team.

Celebrate your team's resilience. Celebrate your team's hard work during something that is super challenging, Right? Something that. That is maybe even painful that they got through.

Celebrate with the team so that you can boost morale. It is crazy important for you to do that. Crisis is an opportunity for you to grow. It's an opportunity for you to emerge even stronger than you ever have. If you look at it the right way.

If you look at a crisis as you're a victim, the company's a victim, the team's victims, you know this shouldn't be happening to you, then I can promise you you're going to come out worse on the other side if you focus on this as a great opportunity for you to grow.

You will be blown away at how much better the entire company gets.

Next-Level Leadership LIVE Event 2025 (00:22:33)

All right, I got a couple of resources at the end of this, but before we wrap up, I wanted to share something that could take every everything that we've talked about today to the next level, folks.

If you're a business owner, if you're a leader, you love what you do. But sometimes it can feel so overwhelming with all of the responsibilities or even handling things like a crisis, then the Next Level Leadership LIVE Event is for you.

It's happening April 2nd through the 4th, and it is absolutely packed with tools and strategies that you need to lead your business with confidence and most importantly, to get your life back.

Listen, leading a business shouldn't mean that you have to be the busiest person in the room. You deserve to step back, trust your team, and still see your business thrive.

That's why at the Next-Level Leadership LIVE Event, we're going to show you exactly how to make that happen. We're going to teach you how to lead smarter and not harder, which is helping you to give your team the tools to step up so you don't have to do it all.

We're going to give you practical tips to lead at work as well as at home without sacrificing either. Yes, we're going to help you to not sacrifice your personal life. Right.

Also, the great thing about being at this event is it is not a bunch of folks who don't know what the heck they're doing. You're going to be surrounded in a community of people who are leaders and business owners as well.

They are going through what you're going through. Some have already been through it. Some are probably going to need some experience from you.

Others can help you with their experience. This is a like minded group of leaders who understand your challenges and they are absolutely ready to share their experiences as well.

This isn't your cousin who's never run a business. This isn't, you know, a friend who's never run a business who's always telling you exactly what you should do and they have no clue.

Here's the best part. You're going to walk away with actionable steps that you can put into place the moment you get back. No more guesswork on what you need to do next.

You'll have a clear plan for your business and your life. Now, I know some of you are thinking, man, I would love to do this, but I don't have time. 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 already open.

Go to chrislocurto.com/liveevents that's chrislocurto.com/liveevents to secure your spot. So listen, don't wait until you're burned out to fix the problem.

Action Items (00:25:24)

Okay, some resources that you need. First off, some action items that you need to do.

As we talk about this, you know, building resilience or managing crisis with confidence, a couple things you need to do. Audit your business resilience. Go over your finances.

Go over your reserves. Go over your team preparedness. Go over your processes. Make sure everything's documented and ready to go. Number two, develop a crisis response plan.

Make sure that you're outlining key steps for common crises like cash flow issues like reputation problems, any kind of team disruption.

Make sure that you've got a response plan in place. Number three, train your team. Schedule trainings. This doesn't have to be every month.

Just do it once a year or twice a year to prepare your team for handling the crisis effectively. Make sure they're in place. Make sure that they understand what's going on.

And lastly, communicate with your advisors. Keep your leadership circle or trusted advisors wise counsel.

Keep them in the loop. You know, make sure that you're talking to them about challenges that you're experiencing or that you're anticipating that you're going to face. Have the discussions with them.

Additional Resources (00:26:37)

Additional Resources Episode 472 | How To Spend More Time Preparing Than Executing. That's where you're going to learn how to carve out the right amount of time for planning and preparing versus doing and executing.

So that's where we dig in deep into that episode. Episode 600 | Year-End Reflections: Turning Insights into Action for Next Year.

So if you've ever wondered how to properly kind of evaluate your business's financial health or maybe even plan for the future and set yourself up to win, this episode is packed with excellent actionable strategies and examples to guide you through it all.

So lots of good stuff, folks. Lots of good information. Listen, crises are most likely inevitable.

Most likely they're part of every small business's journey. I mean, it's just. It just happens, right? It's definitely part of every small business leader's journey, much less every business journey, right?

So the key to managing them with, with confidence lies in preparation. You've got to be prepared. You gotta clearly communicate. You gotta stay calm. You've gotta be methodical. You've gotta make sure that you're not losing your head.

When you freak, you freeze. Don't freak. Right? When you build a resilient business and you lead with clarity, you're gonna find that even the toughest storms absolutely can be managed and they can strengthen your business.

So thank you folks for joining us today. If you will, do me a massive favor. We want to help everybody, everybody we possibly can. Like this episode, comment on this episode, share it with people you know that need to hear it.

As always, take this information. Change your leadership, change your business, change your life. And join us on the next episode.