Entrepreneurs are in the business of taking risks. We trade the stability and security of the status quo for the chance to be our own boss and make the profits we deserve. But the opportunity for big gains also invites the possibility of big losses.
Whether it comes from an economic recession, your own shortcomings, or changes in the market—loss is inevitable. But a temporary setback doesn’t have to spell doom for your entrepreneurial dream. Understanding how to handle loss in business is essential if you want your freelancing career to be ready to weather any storm.
So in this post, we’re going to look at several practical actions you can take when loss does strike.
Accept Responsibility Where It Exists, Let Go Where It Doesn’t
When you experience a loss or failure of any kind, the first step is to determine why it happened. If your profits are down from last quarter, there has to be some sort of reason. If your client acquisition has taken a turn for the worst, there must be a root cause.
The trick to how to handle loss in business is being able to separate the causes that are within your control from the ones that aren’t.
For example, changes in market demand are pretty much out of your control. If your primary service is writing sales copy for small businesses and a recession causes business owners to tighten their spending, you can’t get down on yourself for the inevitable dip in revenue.
But just because some causes are out of your control, doesn’t mean they all are. And if you don’t accept responsibility for your own actions, you won’t be able to improve on them.
For example, maybe one of the reasons that you haven’t picked up as many new clients this month is because you haven’t kept up with your competition. Maybe they are offering better value for the money or doing more to promote their business.
See Failure as a Process
So you’ve accepted responsibility for the things under your control and let go of all the rest. What’s next? Before we get into the real actions you can take, we have one more aspect of mindset to address: failure as a process.
Even when your failures are your own fault, it’s still not worth beating yourself up over them. And you definitely shouldn’t let your failures define who you are as a person.
A better mentality is to see your failures as an opportunity for growth. Muhammad Ali didn’t become a championship boxer without taking a few punches to the face. And your business won’t thrive without you facing your own setbacks.
Treat Every Lead Like It Could Make or Break Your Business
If business is suffering, one of the first actions you can take to rebuild your success is to evaluate how you are handling your incoming leads.
Treat every client inquiry as if the fate of your freelancing business rests in the balance. Are you responding fast enough? Are you following up? Are you empathizing with their needs? Are you positioning yourself as the best possible solution to their problem?
Every lost lead is lost profit. Treating them as such day in and day out is what makes or breaks your business. It takes real discipline, but it’s not something you can afford to ignore.
Adjust Your Prices
Another strategy for how to handle loss in business is adjusting your prices. But you’ve got to do it logically rather than emotionally. Take a hard look at your competition and the reasons behind your lost revenue in order to determine the best way to adjust your prices.
If you are offering basically the same value as your top competitors, you need to set your prices close to theirs. Charging too much means you are likely losing sales left and right without even realizing it. Charging too little means you could probably increase revenue and cut down your working hours just by raising your prices to match the industry.
Sometimes, however, it may be worth running a sale or temporarily lowering prices from what you’re truly worth. This offers you an opportunity to grow your customer base so that you can upsell other services or just get your foot in the door.
Revenue is only one half of the profit equation. The other half, of course, is your expenses.
When you are experiencing serious losses, it’s time to take a hard look at what you are spending your money on.
For example, do you really need that expensive software subscription to operate your business? Do you use it enough to justify the cost? Does it save enough time to be worth the expense?
Look at every expense in your budget and determine if you could do without it temporarily until you’ve recovered from your loss.
Re-double Your Marketing Efforts
Especially when business losses stem from reasons beyond your control, doubling down on marketing is a perfect way to get an edge on the competition. For example, when a recession hits, a lot of business owners are going to tighten their reins and spend less on advertising.
But that means the competition is all the less for you. So while the other guys are pulling back and taking a conservative approach, you’ve got the chance to stand out from the crowd.
And we’re not just talking about paid advertising. If you’re experiencing a lull in work, it means you’ve got more free time to market your freelance business organically as well.
In other words, when business is suffering, do everything you can to bring in more leads.
Find a Mentor or Coach With Experience Overcoming Business Loss
Freelancing can feel like a lonely business sometimes. But you don’t have to fly solo.
Sometimes, one of the best things you can do for yourself during a loss is to seek the wisdom of someone who has gone through the same thing before. Reach out to your network, post on the Legiit Facebook Group, or hire a professional business coach.
Find an experienced freelancer who can help you weather the storm of business loss and make a plan for coming out on the other side better than ever.