We are living through unprecedented challenges. The speed, scale and sheer number of ‘moving parts’ of the Covid-19 coronavirus pandemic caught most, if not all, of us unprepared. Reactions have varied, from denial to bewilderment and everything in between.
Whilst the medical impacts are being addressed by healthcare professionals around the world, the economic fallout has continued despite government interventions. As we face the crisis together, it is important to remember that we have faced down and overcome many challenges over many decades by uniting in our communities, businesses, churches, schools and a myriad of other institutions. Covid-19 will similarly be defeated.
To help small and medium enterprises survive the economic fallout, I have put together the following high-level guide to what you can and should be doing right now, if you haven’t already started. The list isn’t a panacea for all ills, but it is a great place to start. Remember, if you need support, want to discuss any of these steps or if you just need to ‘chat’ through where you are and how to get to the other side of this, reach out to me and I will do all I can to support you. My email address and mobile number are here.
Stay well and stay connected.
Steps to Business Survival
Communicate every single day – with your teams, your staff, customers, your business and personal networks (including social networks), suppliers and stakeholders, your community. In short, do whatever it takes to communicate with the key people around you. In a crisis, there is no such thing as too much communication!
2. Be Positive
Panic never helps. In every crisis there is opportunity, which is often the other side of the same coin. For example, if you sell cleaning products or toilet paper or paracetamol, chances are you will be flat out right now servicing massively increased demand. If you are in some other sector, how can you pivot to support areas of increased or sustained demand? What opportunities can you see, either immediately or coming in the next few weeks and months? Prepare now for those, so that you can be ready when they arrive. Preparing and being productive brings hope and hope brings its own reward. Leaders deal in hope, so lead your people positively towards the future. People gravitate to positive people.
3. Know the cycles
As with Nature, the economy has cycles. Typically, we have seen upturns and reverses over 7-10 year periods. This pandemic will have follow on effects even once the initial acute phases pass. Supply chain impacts will take a while to work through the system and at this stage the best ‘guesstimates’ seem to point to a range of 30-90 days for the medical peak to pass (based on what we’ve seen coming out of China, where new infections peaked at around 4000/day and are now down to around 200/day). In my opinion, it is quite likely that we will be back into ‘Spring’ in somewhere between 90 days to 1 year (although predictions are notoriously imprecise!)
If you haven’t done so already, change from business as usual. You cannot wait! What products, services, pricing, delivery mechanisms, staffing, etc can you move to or from? How? What resources do you need to make that happen? What support do you have available? What products should you discontinue at this time to provide the capacity to streamline, diversify or expand into new markets? You will need to do lots of thinking and do it now!
5. Cut Back
“Cutting costs has to be the top priority in the crisis. The key is to lower costs intelligently and flexibly, thus minimising negative long-term repercussions” – Hermann Simon Simon-Kucher & Partners)
Cash is king and even more so now. If you are going to spend, spend on marketing and sales (in fact, those 2 things are well worth expanding, if you can).
6. Extend Credit
Get extended credit now whilst banks are still lending. Even if you don’t need it, get it. It is better to have it and not need it than to need it and not have it.
7. Staffing Cuts and Changes
Wherever possible, bring vacations forward and take them now. Use job sharing and moving to part-time work as other ways to avoid layoffs and retrenchments. If you do have to reduce staff, do it all at once of do it by attrition to minimise overall disruption. Pay cuts are also an option, even when unpleasant. Suspend bonus payments immediately. Speak to your people and be honest, open and candid
8. Plan and Test Working from Home
Working remotely is not as hard as you may think. Consider the following: What technology do you need? How will you conduct meetings and reporting? How will working remotely affect customer service? How will it affect your business culture and service delivery? What different ways of working need to be put in place to maintain productivity and drive when people are not physically working in the same place. What are the health and safety implications for your teams? How will you do banking and mail? Who can you turn to help you make the transition? What you do now will set you up for long-term resilience.
9. Online or Delivery?
You need to add virtual delivery to your offering. That could include online ordering, phone service, video communications and a host of related media. Consider the staffing changes this may require. What new skills are needed (and which skills don’t you need any more)? How can you bring yourself and your staff up to speed as quickly as possible? Will you deliver to customers or will they collect from you? How will logistics and accounting work? How will you communicate with customers online vs in-store?
10. Market & Sell
“For a business not to market is like winking at a girl in the dark…You know what you are doing, but no one else does!” – Stuart H. Britt.
Keep marketing. If anything - and if possible - increase your marketing, don’t decrease it. Create new offers, go with new rates, know your numbers. If you can, get cash up front and don’t extend credit terms – leave that for the banks!
11. Repeat Business
Profit comes from existing customers.Existing customers are your best customers and you need to do all you can to keep them. They already know you and your product and they trust you, so use this opportunity to get even closer to themCreate deals especially for them – bulk buys, cash up front, loyalty discounts – keep them at all costs. Make sure existing customers feel loved!
12. Common Sense and Compassion (Step 12 of 11 - yes, this is a bonus step!)
Over-deliver on customer service. Clean and don’t touch. Provide sanitiser. Put people first. Never let the situation be more important than the relationship – the former will pass, the latter should last. Finally, don’t buy too much toilet paper!
Remember that some of the items I have talked about need to be changed slowly to make sure that the business continues to operate, but others will need firm and sometimes drastic action. The challenge is recognising which action needs which approach. With the business environment changing so rapidly, sitting still is effectively going backwards as your competitors are already thinking about how they can respond to the challenges ahead.