What To Do When You’re Backed Into A Corner (5 Strategic Keys to Capitalise on During Desperate Times)

Once upon a time, I had a vision of business victory. I drew a straight timeline of my (forecasted) success on a blank A4 paper.

That’s it, a straight line.

Never did I know that my visionary picture was not complete without various corners of setbacks. The simple straight line transformed itself into many chaotic abstract paths.

While success is what we desire, often a desperate situation precedes a great leap ahead. Just like pulling a catapult’s sling for a powerful shot, a painful stretch prepares for a strong comeback.

In this article, we will look at five strategic keys. I call these the ‘CoRNNR’ (read: corner) strategy for it is useful when we are backed into a corner.

The first three keys form the necessary elements. The fourth key is the most challenging one, and the final fifth key is the glue that will hold everything together.

CoRNNR strategy is being laser focused during a tough situation, for a powerful comeback. Coincidentally, setbacks, failures and crises provide fertile ground to discover, develop and strengthen our cornered business.

After all, a cornered army is a dangerous one.

“When you surround an army, leave an outlet free. Do not press a desperate foe too hard.” — Sun Tzu

Core Strength

Pressures force us to switch on our survival instinct. We need to become our best selves to endure hardships. There is no time to muck around.

About a decade ago, we acquired our first business in mining industrial wholesaling. We supplied safety gears and industrial strength chemicals to workshops and factories.

Our business was operating in a highly competitive market with notoriously low margins. A few years into the business, several national players entered the market and started stealing some of our significant customers using aggressive pricing tactics.

It was a typical scenario of a small business getting bullied and squashed by large corporations. We were losing customers. We knew we had to compete differently from the major players to survive the onslaught.

And so we started to look at what we could do that our big competitors couldn’t.

It was undeniable that our smallish size meant we were more flexible and we could respond faster to our customer’s needs. Our large competitors had to comply with complicated operational procedures. We didn’t.

We then found out that a small number of engineering workshops around our area were not too concerned about prices. Instead, they preferred to work with vendors who could guarantee fast delivery of supplies when required. It was something our big, fat competitors had troubles fulfilling.

Upon this realization, we started to build our business around a simple strategy. It was the assurance of quality supplies with a fast delivery turnaround. We could do that because we were small, flexible, local, and highly motivated.

It became our core strength.

We found our unique competitive advantage, and it opened up a whole new opportunity for us. Our large competitors backed us into a corner, unknowingly positioned us at a unique vantage point. It enabled us to see how we could compete on our terms in a crowded market.

Key #1: Find a core strength that allows you to compete differently from your competitors.

Resources at Max

During the onslaught period, when the big players stole our vital customers, we suffered a severe cash flow problem. This situation got worse when the mining industry crashed at around the same time. Most of our customers were operating in the mining industry.

It was a double whammy.

The cash flow issue pushed us to become meticulous spenders. We learnt that we paid too much for several services such as broadband, landline, and mobile phones. We also found out that a lot of work our staffs were doing could be outsourced or automated (it’s cheaper that way).

It was amazing how much cash was bleeding through areas we could either switch to a different provider or stop altogether. We liked this exercise so much we decided to do it regularly. It was a responsible, well-thought cost-cutting.

Desperate times hurt businesses. Cash bleeds through different outlets. A regular cost-cutting exercise would keep our resources shipshape at maximum capacity and best return.

Key #2: Make sure your limited resources work as hard as possible for your strong comeback.

Niche Domination

So we knew how to compete differently, and our resources worked super hard to fuel our survival. It’s time to revisit the customers.

We had to let go of some customers who did not require the value we offered through our services. They were casualties of the price war.

We tried to focus our efforts and resources on a select group of premium customers (premium for us). We were confident that when we became good at something, we would naturally grow.

So we kept our eyes fixed on the chosen ones (read: customers).

What we didn’t realize back then was we stumbled upon a niche. A niche perfectly placed for our little business. In a nutshell, we matched what we could do best with the needs of a small corner of the market. It was not a big slice, but it was growing, slow but sure.

Difficult times propelled us forward through a unique path we would not find otherwise. We discovered a niche market big enough for us yet small enough to dominate. We knew we could compete comfortably against the big players because we found this niche through our unique competitive advantage.

Key #3: Use your core strength and revitalized resources to dominate your niche.

Nurture the Efficiency Seed

Our previous strategic keys can be summed up into “utilizing resources at maximum capacity to service a niche market that is a perfect fit for our unique core strength”. The final result is a highly focused, well-oiled, efficient business. The first three keys will integrate into one.

There is one small challenge, though. We can only build efficiency over time through patience and consistency. In short, it takes time, blood, sweat, and tears to perfect the efficiency engine.

It is, in essence, sowing and nurturing a seed; I call this the ‘efficiency seed’. This seed is the culmination of the previous strategic keys.

Nurturing efficiency is the most challenging part of CoRNNR strategy because we need to let go of everything else that does not contribute to servicing our niche customers. And that includes other potential customers, products, suppliers, and so on. We have to fight the temptation to try out different things. We must focus on what we can do best within the niche market that we have chosen utilizing our limited resources to the max.

Nevertheless, we will start to doubt ourselves.

But remember, we sow seeds in dark places, in obscurity where it is often cold and lonely. And it takes time to nurture them before they germinate and grow roots.

Similarly, we discover these strategic keys during tough circumstances. For only during desperate times that our perspective changes, forcing us to see pathways we would not consider before. People might misunderstand you and even mock you for your new focus, but it is important to keep playing to your strength and keep moving forward.

The next and crucial final key will help tie everything together in a beautiful little bow.

Key #4: You only become the best in your chosen niche market through focus, patience, consistency, and persistence.

Resilience to Prevail

Tough times demand resilience. We need to make a conscious effort to focus and power through. Resilience is the substance that holds everything together.

Resilience was there when large corporations squashed us. It was present when we scrambled through a cash flow problem. And it held us up when we decided to focus on servicing a small number of engineering workshops, leading to the discovery of our niche market.

Think of it as a mental muscle that strengthens your spirit whenever you feel defeated. Use it when it is difficult to take the next step. Use it also when certain people are trying to pull you down. And finally, use it when you are confused and lonely.

Now, the final twist to the CoRNNR strategy.

How do we develop our resilience muscle?

Well, there is no short cut. We can only develop resilience through desperate times.

Just like physical muscles, resilience muscle grows when it is stretched under heavy pressures. You can see how useful CoRNNR strategy is when we are backed into a corner. Because not only our perspective changes during difficult moments, our resilience also grows.

CoRNNR strategy is a full circle. It begins when the going gets tough and only when the going gets tough do we get to grow with it.

Key #5: Harsh circumstances build resilience, embrace these times for it is the precious resilience that will hold yourself (and your business) together.


Just to recap:

Key #1: Core Strength
Key #2: Resources at Max
Key #3: Niche Domination
Key #4: Nurture the Efficiency Seed
Key #5: Resilience to Prevail

I hope these five keys have been helpful.

Keep the momentum going and keep going strong.

“When you are backed into a corner, you can give up or you can use that corner as a stepping stone.” — Fredy Namdin

As published in The Startup: What To Do When You’re Backed Into A Corner

What I Learn From The Rain

Do you know how to put away four pallets with a dozen different items into two little shelves? Neither did we, but sadly that was what we were doing in that cold morning. The shelves were almost full too. We ran out of idea until one of us decided to ‘MacGyver’ it. Somehow we connected four smaller shelves, turning them into ‘unofficial-somewhat-risky-shelves-extension’.

Chemicals were the worst because we had to be extra careful. In particular those with ‘DG’ written on them (DG is Dangerous Goods). These must be visible and easy to contain should any of them decided to leak. It means we had to have spill container and granules (aka kitty litter) nearby.

Another hassle was those items with expiry dates such as disposable gloves or alcohol gels. Hah, who would’ve thought, disposable gloves have expiry dates! What would happen when they expire, have you ever thought about that? Maybe they go all wonky or change colour? Nooo, they got sticky and brittle!

After hours of struggle and perseverance, we finally did everything. All items were put away and labelled accurately. We made the impossible, possible, thanks to plenty of coffees and Krispy Kreme doughnuts.

‘Busy’ was the word on the street back then. Our days were full of work, work, work (and back pain, back pain, back pain). The floor flooded with pallet wraps, cut cardboard, and metal straps. No kidding, if we let a mouse loose, it would get lost in no time among the jungle, and then died of starvation.

Well, we did have downtime, sometimes. We used these rare moments to enjoy extra cups of coffees while having in-depth discussions (among other things) about our customers. They kept us busy alright. Some of them pretty much demanded immediate attention when they rang. We should charge more for this ‘concierge’ services, unfortunately not.

Our super busyness though had left us with many little things unattended around the warehouse. For example, our toilet was not flushing correctly, sometimes not at all. Then what about that jungle of cardboards and straps, they were accidents waiting to happen. And then there was this small leak from the ceiling fan. Nothing major yet, just a little bit of concerns.


”What are you doing, Jim?”, I asked our loyal warehouse staff.

”It’s leaking again, boss, I am just rearranging things,” Jim said.

”You mean the ceiling fan?”

”Yup, a bit wet today.”

”Is it getting worse?”

”Probably a little bit.”

”I probably should call the agent to fix it.”

”Yes, you should.”

I helped Jim to move the stocks away from underneath the ceiling fan. Some of them were severely damaged already. Luckily we didn’t have too many perishable products down there – at least that was what I thought.

”So what is the damage?” I asked Jim.

”Well, some of the almost expired disposable gloves are now definitely expired,” he replied.

”What do you mean some?”

”What?”

”How much is ‘some’?”

”Two cartons boss.”

”All wet?”

”Yeah, all wet.”

”Is that all?”

”Yup that’s it. The Nitrile gloves are also wet, but they are water resistant.”

”I hate this rain.”

”You mean, the leaky roof? The rain is not at fault here.”

”Yeah, I mean the leaking roof.”

The rain did not stop that day. Our humble little ceiling fan was leaking rainwater like a beer tap. We put plastic buckets all over the place to contain the rain. I remember back when I was a little kid we used to do something similar at home. Leaking roof and plastic buckets, we couldn’t get away from them.

Unfortunately, things got a bit hectic afterwards, no agent was called that day, and no leaking roof got fixed. It was Friday too, and we wanted to go home.


It’s funny how things go a lot slower from Monday to Friday, and suddenly speed up on the weekend. And before you know it, it’s Monday! Back to work, folks!

Non-stop raining continued over the weekend. I was hoping our leaking roof wouldn’t spill too much water into the warehouse. We cleared the area underneath already and put together a circle of spill granules to contain the possible flood.

Jim was already there when I arrived.

”Jim, how are things?” I asked Jim.

”Not good boss,” he replied.

”Oh, no..”

”Yes ..”

”How bad is it?”

”Interestingly, the leaking was not too bad.”

”But ..”

”But some of them found their way into our chemicals drums.”

”How did that happen?”

”We forgot to close the lids boss.”

”Yeah, but the drums were not underneath the leaking fan.”

”Well, apparently it was leaking at other places too.”

”And they happened to be on top of the drums.”

”Yes, boss.”

Fortunately, none of the DG chemicals was affected. We made sure they were all closed properly. The concentrated dishwashing liquid and glass cleaner though, they were all ruined.

I knew it was my fault for not calling the agent sooner. But again, the primary damage was not from the ceiling fan. Even if I called the agent and got the fan fixed, we would still suffer significant loss from that leak on top of the drums.

Soon the season changed, and we forgot about the incident altogether. We finally fixed all the leaks. But we couldn’t sell our concentrated chemicals though, because well, they were not concentrated anymore.

At least I learnt a few lessons from this.

Number one. Always do what you can do today, not tomorrow. If I did, I would have got the leaks fixed, and the drum lids closed. But I didn’t, and I paid a hefty price for that.

Number two. Water is so powerful even its drips can ruin the whole drum. It reminds me of an old proverb: “One drop of poison infects the whole tun of wine“. I should never underestimate the damage that small drops of water can do.

Number three. There is no point in blaming the past because it already happened and there is nothing I can do to change that. This one I needed to learn the hard way. I have now accepted that instead of crying over what has happened, it is better to learn from my mistakes and try not to repeat that.

Wait, there is one more lesson to learn from this saga.

Interestingly, this lesson is the culmination of all three.

It is the classic concept of ‘grit’.

Grit is about doing what you can and not procrastinating (lesson no.1).

It is also about persevering in doing little things at a time, and never underestimate how they could affect the more significant things (lesson no.2).

Finally, grit does not worry about the past and focus instead on the future (lesson no.3).

***

“It’s hard to beat a person who never gives up” —Babe Ruth

What Marketing Budget?

When a business finds itself in financial trouble there is an inherent meaning which most consultants don’t get. The business has ‘financial’ trouble. It needs every dollar to survive. The last thing they need is another marketing budget for that campaign to get more leads which presumably will get them out of trouble.

We need to understand that there is no money left (well maybe a little bit).

We need to fix the cash flow first, cut cost, chase payment, move (not make) some cash into the bank (if there is any), and fix the fundamentals. Then we have a little bit wiggling room. These precious resources are all they have. That’s it, there is nothing else. If it is not enough then that’s it – it’s not enough – start to think about an exit strategy. The more time is wasted the worse it will get.

But don’t lose hope because it might be just enough for us. The challenge is to use these little resources to turnaround the business. And this is when we get a bit ‘creative’. The words ‘free’ and ‘creative’ will be your best friend in the next few months. In order to make all of these to work, we need to be creative in using freely available tools around us. The internet is a great place to find them. But also do some outreach to your friends, families, etc. – not to get free money but free contacts, advice, knowledge, etc.

Fix the fundamentals, hang on to every resource, and be creative to get and use more resources (free is preferable). Then we will have a good shot to turnaround the business.

Now one more thing. While it is great to have a strategy, the real impact will happen during execution. And things will change, the great strategy will be rewritten, and execution will stall.

So persevere, be flexible, focus, and take it one step at a time. We might not have the big budget enjoyed by larger companies. But our mind and mental strength will make up for it.

 

 

Money The Necessary Evil

The only issue with money is either you use it or it uses you. How does that happen you might say. In reality, it doesn’t. It’s just an excuse we use when we couldn’t control ourselves when it comes to money. We are always in control, money is not.

Have you ever thought about how much money you can make? Or will make?

What about how great business will be if it makes ten times more than it does now?

It is the main currency used by most advertisers. It is how we measure our success, our dignity, our legacy. It is why we rank people based on their wealth.

Let’s face it money is addicting, probably the most addictive substance in the world.

We forget there are other more important things. We forget that money is temporary. We forget that money is only a means to an end. We forget that money is not the end goal.

But talking about a small business we cannot argue that money (or we prefer to call it ‘cash’) is necessary. We must not forget though that it is only necessary to a certain extent. A good business is not focused on cash, albeit it cannot function without it.

So how does this intricate relationship work? We need cash but we don’t want to focus on it? But if we don’t focus on making money how on earth are we going to build a great business?

In every great business, the focus is always on the customers. They exist to solve customers’ perceived problems. These problems do not have to exist – they only need to be perceived to exist. So if you ever felt ripped off by certain businesses, most probably because you are being ripped off. And this is how certain products command such high prices – because they solve ‘perceived’ problems that might not exist in the first place.

Anyway, back to our original discussion.

Regardless of how much you can rip off your customers by creating certain perceived problems and then charge an exorbitant amount to solve them, the focus is still on the customers. The exorbitant amount is the after-effect. Once you start focusing on the money your effort will shift to short-term activities such as reducing operational cost, renegotiating with suppliers, and so on. Not that these activities are bad – they are necessary but they are not the main focus. Your customers will figure out quickly if your business is solving their problems or not. They will sense very quickly if your only interest is their hard-earned cash.

Focus on solving their problems and they will never feel that they are being sold to.

Money is required to fund all these operations but it is never the focus. Never let the temptation of making money pull you down into never-ending addiction.

Focus On One Point

Small businesses often found themselves competing with much larger competitors. Sometimes the amount of money these competitors spend on their operational expenses alone is enough to acquire several smaller businesses. They are so big it is futile to compete head-on. So how do you compete? How do you win in the marketplace?

Well, as large as any company can be they cannot serve everyone. There are pockets of customers they are simply not interested in or they are not perceived good enough by these customers. The issue is then how to identify these pockets and how to dominate them.

It is not possible for any small business to conduct in-depth market research to identify these little gold mines. So what they can do instead is to narrow their search and focus on certain type of customers they can serve better based on their competitive strengths. These strengths can be anything from unique products, locality advantage, similar cultural background, excellent customer relations and etc.

**

Lee is a cabinet maker who has been struggling to make ends meet due to the onslaught of cheaper imports. He used to make at least 10 units per month and now only down to 4 or 5. His skills mean he could make any type of wooden products from budget version to the most sophisticated one ever built. In fact the more sophisticated the design the more energised he is.

In addition to his cabinet making skill, he is also an avid gardener with real passion and a very green thumb. Not only he has a vast collection of plants he also builds all sort of wooden boxes, benches, garden beds and so on. He magically transformed his humble backyard into a place of serenity with such artistic touch of a master carpenter.

Of course, like any good inspiring story – Lee then realised how he could use his carpentry skill to transform boring ordinary backyards into majestic gardens. He started to work with landscaper and garden designer to come up with unique designs in Continue reading