Running a business is not for the weak!
I am involved with several peer to peer business groups and work with amazing leaders from many sectors. Like many of you, over the last month I have been in hundreds of conversations with these leaders and have conducted my own research into the current market. I am excited to share with you what I have learned from some of these leaders on how to play this crisis.
RIGHT NOW, most non-essential companies are either hunkering down or are pivoting their model.
Go onto any social platform today and you will notice mostly smaller organizations seeing the opportunities and either pivoting to be more accessible online or doubling down on their online efforts.
On the other hand, you will see many traditional organizations going silent as they move into protection mode or try and figure how to survive and compete in this new economy.
In the new crisis economy you need to play both offence and defence to survive and prosper. Below are the Top 10 Offensive and Defensive strategies that you need to execute on, before your competition does, to help you move through this crisis quicker than they do and come out the other side in a healthier position.
Top 10 Defensive Strategies For Business in a Crisis:
1. Plan for the worst – by now most business owners have analyzed their businesses and determined how long they can survive. My recommendation would be to look at a minimum of 3 scenarios. Bad, Worse, Catastrophic. Define what these scenarios look like to your business and then how you would deal with each scenario so that you have a plan of action that can quickly be executed. Plan out your cash flow as far out as possible- what will cash look like in July, August and September based on your best business modelling. Where will you hit the wall and what will you do based on each scenario.
2. Manage all expenses – turn over every stone on the expense line of your P&L. Nothing is too small to cut, reduce, or re-negotiate. Bank interest, photo-copiers, leases, contractors, are all areas that can help extend your business’ runway if you take action now.
3. Right size your team – most businesses have already been hit hard by the current crisis, forcing most leaders hands in reducing head count. Depending on how long this lasts you may need to go deeper into head count reduction. How do you continue to offer the services that your customers expect and who are the people that really make the difference for your organization. If in doubt when you come down to 2 similar people and one of them needs to be laid off use a Core Values fit score card to help you make the best decision. Keep your superstars in the game- breaking positions.
4. Collect on all accounts receivable – when times get tough everyone starts to use everyone else as their bank. Extending terms as long as they can, in many cases because the same thing is happening to them by their customers. Be diligent on all cash flow, sometimes “the squeaky wheel gets oiled” here. At the very least work with all of your customers to discuss terms and understand their cash flow so you can plan better for when you expect payments to come in.
5. Extending terms – opposite of the above, look to extend terms with your banks, landlords, and suppliers where possible. This is all about cash flow and extending your runway.
6. Expand Operating Line – the government and banks are stepping up more than we have seen in previous crisis situations. They want to see you and your business succeed. More than ever I have heard positive stories about banks working with people from a business or personal standpoint. Get or increase your operating line now so that you have more cushion for your business. Again, this will give you more runway if you have customers pushing out your terms with them, or if you need a bit of cash to get you through a few weeks or months without laying off an employee as you know work is coming. This may also be a good time to start a relationship with a new bank and one that you currently are not doing business with personally or professionally so as to protect yourself if one of your current banks freezes your account for some reason.
7. Revise your Strategic Plan – the plan you and your leadership team invested time and energy into for 2020 has probably taken a hit. Now is the time to revisit the plan and evolve to the current circumstances you are faced with. Don’t walk away from the thinking and effort you put into the current plan but do see what still makes sense to proceed with and what needs to evolve or change. Revisit with your team to discuss and align on how to best move forward. Your business still needs to stick to a plan and a way of operating and moving forward. People still need to be accountable to moving your organization forward. Make those changes today, communicate and align to the plan and move forward.
8. Protect your high value customers – retaining your most valued and profitable customers needs to be your top priority. Research indicates that customers loyal to your brand spend up to 20 times more than the average customer. Start by determining who these customers are, and then do what you can to best cater to them during this time. You may consider some type of initiative that this customer values and which also shows your love for them.
9. Sell off or discontinue services or divisions – focus, focus, focus, on what it is that really delivers for your business’ bottom line. Even selling when the market is not good and knowing you are not going to receive good value is a good idea as the cash will extend your runway giving your more time to make better decisions and secure new business.
10. Last but not least, look after yourself – your organization needs you more than ever, but it needs you functioning at your highest level. Eat well, get proper sleep, take a breath, take a walk, speak with friends and family, stay connected. I have had several virtual beers on Friday with friends to see people that are important in my life and have a few laughs. You are not alone in your stress and a few laughs are a great way to set up a good mind set heading into the weekend.
Top 10 Offensive Strategies For Business In a Crisis:
1. Continue to hunt new business – you may find that in many cases your customers and prospects have a little bit of time right now to conference, others will not. Many of the conversations I am having now have a different tone to them, they are more intimate, and human. We are all in this together, globally. Everyone is hurting and concerned. Everyone is looking for answers – be that answer, be that person who sees a way through this for your clients and prospects. Be optimistic and opportunistic for others. Stay on the hunt.
2. Close all sales that are “bird in the hand” – many of your leads in the funnel are going to dry up through this. You need to close what you can right now and then fill the funnel again. Some leads just need the confidence to move forward. Offer a guarantee, do whatever is needed to take their concern about not moving forward off the table.
3. Refine your Brand Marketing message – now is not a time to be talking about “winning” or “crushing the competition”. Your message needs to reflect the market and be driven through the lens of whatever it is that makes you different, stand out, and important to your customers. Go back to your position, or the idea you brand from in the market and brainstorm through that lens on what you can say in the market that is both authentic and engaging. Just about anything that does not say COVID on it will stand out. This is not a time to be too salesy, it never is really. Something with a message that comes from the soul of the organization and is tied to your organization’s DNA. We have revised all our clients’ messaging to this thinking so that it stands out in their market.
4. Script how you communicate with clients and prospects – in a time of fear you need to be the safe solution to your customers’ and prospects’ needs. Talk about how your organization has survived many crisis economies in the past and how you will be there to service and help customers through this as well. You need to ask questions to understand where the customer or prospect is at currently and in the next 90 days and then have ideas/solutions available for them or say “we understand your problems/issues, let us take that away and get back to you with some options to move forward”. Always about moving them forward.
5. Continue to Brand Market externally – plenty of your competitors will go silent through this crisis thinking they will ramp back up when times are better. Guess what, so will everyone else resulting in your message having a better chance of getting lost. Our research is showing that more people are online now than ever before, and they are spending more time online. Some are looking for humour, motivation, and a message other than something about COVID or a rich kid on a yacht. Get your brand’s story out there and focus on what you do to make peoples’ lives better. The brands with the most succinct message will do the best through this crisis. Get deeper with your story through some soul searching about what makes you and your organization a unique and better solution for customers. We go back to why the organization was started in the first place. Usually there is something extremely powerful that you thought about and did right in the infancy of your organization’s start up that allowed it to grow and be what it is today. Go back and find this magic and drive your message through that lens. It may make a huge difference to have a third party help you through this as it can be hard to get this deep on your own.
6. Continue to Brand Market internally – wow does your organization need full transparency and leadership right now. It is probably fair to say most people in your organization are feeling some level of, fear of the unknown and their future, stress, anxiety, even depression. Many of your people are thinking and acting from the flight or fight part of their brains and making bad decisions for themselves and your business. A crisis really tests your organization’s culture and values. As you make the heavy decisions you need to consider how you would want to be treated if being let go or put on temporary layoff. We can not even meet face to face with people if we need to do this. As the leader you will benefit from making decisions and how you act on them through the lens of your values and culture. Reference how your organizations values support the actions you decide to take. Be available, be transparent, bring your team together with meeting rhythms. Ask your team how they are doing, what their biggest fear is and how they could mitigate the impact of this fear, also how you could help them. Talk about your origin story and how you and the organization have gone through tough times in the past. Keep your thinking, decision making, and actions aligned with your Brand, Values, Culture, and Purpose if you have one. Don’t make a promise you won’t keep.
7. Invest in R&D and Innovation – this may be a new normal for business. This is a time to innovate your business, be it allowing people to work remotely and/or deliver products and services online. What is your business’ value for customers and how can this value allow you to evolve from your current delivery method. What other audience would value what you are good at. The book, Blue Ocean Strategy, is a great start for you and your leadership team to turn your business upside down and see what it could be.
8. Managing your pricing – in some cases you may be able to raise your prices. Increasing your prices today will deliver more to your bottom line than new business will and you will receive an immediate impact to the income statement by making changes immediately. That being said everyone is watching expenses and scrutinizing what they are spending/investing. Small tweaks to your pricing will have significant impact and a little success buys a lot of overhead. If cash flow is good you may be able to help a prospect or client buy from you that is short on cash flow by offering longer terms versus a lower price. Be flexible and look for solutions that benefit both you and your customer.
9. Drive the organization around the strategic plan – what in your plan allows you and your team to rally around to fight this situation that has been forced onto us. Create urgency in the organization to work through the issues this crisis is causing your business and determine how you will survive and evolve. Align everyone on the direction you will take, provide everyone clear steps on how they support whatever it is that you determine as success. Ensure everyone contributes and can visualize what success looks like on the other side of this crisis. Focus and drive the organization towards this success. There are a lot of distractions in the market right now, focus and alignment will help you move quickly through the life span of this crisis quicker than your competition.
10. Be truly entrepreneurial again – treat this time like you did when you first started your business, before you had a paycheque from the business. Trim everything back to the time when all you had was an idea and some commitment to create something. Think about the sacrifices you made back then when you had nothing to lose and everything to gain. Remember that excitement you had when you were building something new and all of the opportunity you saw then. Now look at your business today and instead of thinking about how you are going to pay everyone and keep everything going, ask yourself based on what I know today, what would I do now? A fresh start. Maybe you would build what you have but evolve the delivery method. Maybe you build something completely different based on your knowledge today and what you feel would benefit people moving forward. Create something new when times are tough and as the world comes out of this you will have built with a new prospering business. Many businesses that are around today were started during a recession, including Sandbox Brand Marketing.
Please use what you feel is most important for you and your organization’s health from these strategies. I hope there is value here for you and if you would like to discuss any of these in more detail feel free to contact me at [email protected]