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Randal D. Pinkett and Lawrence M. Hibbert watched their educational training firm MBS Educational Services and Training succumb to the 2001 recession but they regrouped to form BCT Partners, a management, policy, and technology consulting firm that made nearly $2 million in 2008. Here’s what Pinkett and Hibbert learned about surviving a crisis:
Learn to live lean. To survive a business crisis, you may have to sacrifice personal comforts. When BCT Partners was searching for initial clients in 2002 and 2003, Hibbert recalls seeing colleagues making six-figures and driving luxury cars “while we were all pushing a Honda Civic or whatever we could get around in. If you can’t manage a tight budget, you won’t survive the ups and downs of a business,” says Hibbert.
Diversify your business model. In retrospect, Pinkett says one of the mistakes MBS made was depending so heavily on the ‘in-person training model’ rather than exploring other ways of doing business such as online learning. “It’s like the classic story of 8a companies that live off of 8a contracts and then they die when they lose their 8a status,” he says. “Don’t put all of your eggs in one basket.”
Build a strong team. “There’s strength in numbers,” Pinkett says. For every story of entrepreneurial success, none did it alone. “Oprah had Jeff Jacobs; Bill Gates had Paul Allen.”
Be willing to change. In order for BCT to emerge, Pinkett and Hibbert had to let go of their earlier vision for the company. “You can’t be so into your business that you’re not able to look at it honestly and assess what you’re doing good and what you need help with,” says Hibbert.
Commit to a course of action. When you know you must make a change, do your research, but at some point, commit to the new idea and take action. “We’ve seen some companies that have seemed to languish in the change because they’re unwilling to step forward and make a decision and go with it,” Hibbert says. “Procrastination can hurt you more.”