For most business owners I’m guessing your strategy is off track and any exit planning is on the back burner given our minds are on the ramifications of the COVID-19 virus. What is probably on the minds of many is, “How and when can I get out as I don’t want to rebuild it again?”
It comes down to choices. Here’s one of those choices:
Is the pain of rebuilding your business greater than the pain of selling at a discount? If it is, once there’s stability it’s time to sell. If the pain of selling at a discount is greater, then do what you can when you can. And depending on your industry, it could be a quick rebound or a long, slow process.
We should all realize there is nothing most of us could or can do when something like this wallops us. Customers can’t buy if your business is (forced to) closed. You can’t make sales calls when ordered not to. But that doesn’t mean you go into hibernation mode.
For tips on how to minimize damage I interviewed my friend Dan Weedin, who is a crisis and disaster management expert (you can see more about Dan at www.danweedin.com). Here are the questions I asked Dan and his insights, followed by a few pieces of information from me:
What were you telling clients 6, 12, and more months ago about crisis planning?
Business owners should create a written business continuity plan that covers who’s in charge of a crisis, what are your continuity paths with employees, customers, suppliers, and the community. Know your emergency preparedness procedures for things like loss of power, loss of water, damage, etc.
What about pandemic preparation?
“This caught me by surprise given it’s been 100 years since we’ve had anything of this magnitude.” He said if he had told clients to prepare for virtually the whole economy shutting down, he feels they would have thought he’d gone crazy. The biggest problem with this situation is the uncertainty as it’s different and scary. With other crisis’s (fire, tornado, flood, etc.) we have an end point, so we deal with it, and recover.
What about recovery?
Be worried about your supply chain. Your area and your firm could be back to work but if your suppliers are in other states or countries and they aren’t back to full speed you’re still treading water. Look at options now.
What are you telling clients now?
First, it’s different than what I would have said a week or two ago. My top things are:
- Stay educated. There’s a lot of data out there. Know what’s happening with governments and their policies.
- Employee safety is number one. What can you do to keep them safe?
- Innovate. What if this is our normal for three months?
- You can’t over communicate. Communicate to create community.
What are some examples of what businesses are doing?
- A gym is holding virtual training sessions. They want customers back when they’re allowed to open instead of buying Peloton’s, building fancy in-house gyms, etc.
- A bar is doing online cocktail making classes as they know they’re customers will remember them and be back.
- A shared work facility is doing a virtual happy hour to keep front-of-mind.
- A winery, not able to do tastings, offered their club members free shipping if they added three bottles to their order. They’re delivering the wine so the customers don’t get it at the store.
In the future he will do pandemic training as part of disaster planning and his final words to me were, “Talk about things other than COVID-19 and be a distraction to others.”
I (John) also realize we’re in the middle of something we never thought would happen, much less planned for. So, we have to move forward from where we are. Here’s my advice, most of it good for all times not just during a crisis.
Take care of your employees and customers. They are tied for number one on any list you have. You don’t have a business without your people and those who buy from you. Do what you can to keep your employees, have them come back if you had to let them go, etc. Stay in touch with all customers, even if they’re not buying now.
Be wise with your cash and at the same time work with (take care of) your suppliers. You want them around in the future. If you have a line of credit, consider using it to get cash on your balance sheet.
Do not “hunker down.” Be as large a marketing machine as you can be (as Dan said, you can’t over communicate), especially if you can do it for little or no expense. Use social media, emails, phone calls, etc. Besides regular messages, one thing my company did was send a request to lot of business friends to help a family my wife is assisting. The mom escaped an abusive situation and is trying to get her kids and herself back on their feet. We got some donations of things they need and kept my name in front of people for a great cause. A win-win.