Strategic CFOs offer advice for dealing with economic downturns
“Uncertainty” might be an understatement when it comes to the current business and economic environment. With rising inflation and interest rates, geopolitical turmoil and ongoing fears of recession, many CFOs today are trying to navigate their companies through uncharted waters.
We spoke with several strategic CFOs to get their advice on the best ways to not just survive, but to also thrive during these uncertain times.
The COVID-19 pandemic presented tremendous uncertainty for Camp Gladiator, which offers outdoor group fitness experiences to clients. But the company retained 97% of its clients during the pandemic. While most indoor fitness centers were forced to close, Camp Gladiator thrived due to its safe and accessible outdoor fitness programs.
The company performed wide-ranging scenario planning exercises in which they game planned for how things might go for the business. This included potential revenue declines of 20%, 40% and even a massive decline scenario of 60%. Once you’ve modeled these scenarios, you can more effectively plan for them.
Times of uncertainty may reveal unexpected new opportunities. Camp Gladiator added a virtual class option so clients who were concerned about exposure to the virus could participate more safely. This presented an opportunity for the company to connect with clients and serve them on a different platform. The company’s performance exceeded its plans and they enjoyed a growth year in terms of new members.
Another key is maintaining flexibility since there’s no way to predict exactly where things are going to go. Be careful to not get locked into terms or pricing structures that are untenable over the long term. Plans for new product and service rollouts might have to be shelved for awhile if realizing viable margins isn’t realistic right now.
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