Learning from WeWork's Mistakes: How Small Businesses Can Plan for Economic Changes
Planning & preparation can help you avoid their big mistakes.
We've all heard about the recent WeWork bankruptcy issues. There are some valuable lessons to offer all small business owners. While the coworking giant's bankruptcy might seem like a distant story, there are nuggets of wisdom from their missteps, especially with planning for economic changes.
Diversification is the Name of the Game: WeWork's reliance on long-term leases and short-term subleases left them vulnerable when the market took a hit. The lesson here? Diversify your revenue streams. Whether offering new products or services, exploring different markets, or even expanding into related fields, having multiple sources of income can help cushion the impact when one area faces tough times.
Flexibility Rules Over Rigidity: We all admire a strong business plan, but being too rigid can be a downfall. WeWork's inflexible leasing model didn't stand a chance against the sudden shift to remote work brought on by the pandemic. Make sure your business plan has room for flexibility. Anticipate shifts in the market and have backup strategies ready to go. Being adaptable can mean the difference between weathering a storm and sinking.
Be Careful with Debt and Spending: WeWork's extravagant spending and mounting debt ultimately led to its downfall. As small business owners, it’s crucial to monitor your financial health. Avoid taking on unnecessary debt, and continually evaluate whether an expense aligns with your business goals. Prioritize spending on essentials that drive growth and profitability.
Focus on Core Competencies: WeWork's expansion into areas like residential real estate and education might have been ambitious, but it also pulled their attention away from their core business. Stay true to what you do best. While diversification is important, straying too far from your expertise can dilute your efforts and lead to inefficiencies.
Nurture Customer Relationships: WeWork's corporate culture and customer relations took a hit due to leadership controversies. Small businesses thrive on relationships, and maintaining strong connections with your customers can be a lifeline during uncertain times. Listen to their feedback, engage authentically, and consistently deliver value.
Monitor Market Trends: WeWork's inability to predict the rise of remote work showcased the importance of staying informed about industry trends. Keep your finger on the pulse of your market, attend industry events, read up on news, and network with peers. Being well-informed can help you anticipate changes and pivot your strategy accordingly.
Plan for the Long Term: Rome wasn't built in a day, and neither is a successful small business. WeWork's meteoric rise and subsequent fall remind us that overnight success is often unsustainable. Plan for the long term, and focus on building a strong foundation, nurturing your team, and delivering consistent value to your customers.
We should all be looking at WeWork's bankruptcy filing and finding lessons in the importance of adaptability, financial prudence, and strategic planning for small businesses. By learning from their mistakes, we can build more resilient and successful businesses.
Here's to your success! 🚀🌟
