Social versus People Distancing

I’ve read and heard a lot lately about how we’re all social creatures by nature, which makes social distancing tough. My neighbor says we’re people distancing not social distancing.

An he’s right. We’re in touch from six feet away, on Zoom, Teams, FaceTime, and other apps. We’re just not close to each other (which is tough on people who love to hug).

When the Employees Steer the Ship

A company Jessica and I have been helping has a dependency problem, which is not uncommon in small businesses. Unlike most, it’s not the owner and it’s not a customer concentration issue. It’s an employee, specifically the (former) operations manager.

I should say “almost former” because she’s ingrained herself so deep into the operations that she’s still working part-time even after she moved out of state. There are a few things only she can do, and they’re important tasks, some critically important like pricing.

You may ask, “How does this happen?” Just look at some of the causes (at this company and in general):

  • The employee takes over, is controlling, and won’t delegate (just like a founder/owner). This is what happened in my above example.
  • The owner is lazy and may think he’s delegating but he’s really offloading. 
  • The technical aspects of the business are not the owner’s expertise (and don’t often need to be) but the company isn’t large enough to have depth.
  • There’s not cross-training, no team building, and maybe not training in general.

It doesn’t take much effort to have this happen and I can speak from personal experience. Jessica’s been off for a couple days, there are some things I have to do using Salesforce, on which she’s much more accomplished than me, I got some done, and needed to speak with her before finishing.

When things are going well it’s no big deal. But if the employee leaves, gets sick, or is in an accident there’s a problem. It’s just like exit planning. Most owners don’t think of preparing the business for sale or they ignore it until it’s time to sell and then it’s too late. An employee dependency is something that can usually be prevented (or cured) if you pay attention to it.

“Children aren’t happy with nothing to ignore. And that’s what parents are for.” Ogden Nash

Will COVID Change Regulations?

Perusing LinkedIn, emails, Twitter, and other sources I see a lot of commendations for health care workers of all types. The same for the universities, corporate research labs, etc. that are working on tests and vaccines. All deservedly so.

I don’t see too much about how most people, including politicians (if politicians really are people), are united to get things done quickly. In this case, it means circumventing some regulations and attitudes.

Believe me, I’m not anti-regulation. I believe workers need to be protected, I don’t want companies or individuals dumping chemicals in the water, on the land, etc. We need to protect people from themselves with seat belt laws, restricting texting while driving, etc. And yes, regulations can go too far. Did you know when there’s a green box for bike riders at a stop light you can’t (legally) turn right on red? Yep, federal law as told to me by someone at the City of Kirkland when I questioned this.

So it’s great to see some of the labyrinth removed to get vaccines and tests approved. Let’s hope more of the excess regulations go away after all of this.

Has COVID-19 Derailed Your Planning? Tips From a Crisis Management Expert

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.

There’s a Lot Going On in Today’s World

Just some thoughts given our current situation. Disclaimer: You will probably find something to like and dislike based on your political preferences.

  • Mother Nature, the Hand of God, or whatever you want to call it can bring billions of people to their knees pretty quickly.
  • A few weeks ago I was in the “it’s not that serious” camp. Then I started seeing the hockey stick like charts of how this exploded in other countries. Amazing how South Korea handled it, versus Italy, because South Korea took action and took it quickly.
  • There is ample evidence government officials (of both parties) knew this could happen and took no preventative action. Bill Gates repeatedly warned of this and the National Institute of Health ran a model that showed we weren’t prepared.
  • The response from government should scare you about what it would be like if the government ran all health care (for some personal insights into the testing fiasco read Peggy Noonan’s WSJ column from March 21 – she describes her experience with the maze of getting tested and then getting results)
  • On March 16 we decided that to get away from news we’d watch comedy, starting with some Monty Python videos. It was a week of mostly funny stuff, which sure lightens the mood.
  • This could be much worse than the financial crisis of 10-12 years ago, especially for small businesses.  
  • Will $1,000 or so per person make a meaningful difference?
  • Bankers are contacting their loan customers, worried about how this is affecting them (and their ability to repay).
  • A trillion-dollar stimulus package on top of trillion-dollar deficits, wow! FYI, I wrote the White House a couple years ago complaining about these huge deficits during an economic boom.
  • It would be nice if our president would act like he actually cares.
  • On the local (Washington) front, our governor spent all last week lecturing us like a primary school teacher lectures her little kids. And to no avail as the headlines have been about people ignoring his warnings and hanging out all weekend in groups in parks and on beaches.
  • There’s going to be pent up demand when this calms down and let’s hope it quickly brings back the jobs being lost, especially the lower wage jobs.
  • I think and hope it will spur activity in the buy-sell market. I’m guessing there will be a lot of owners who will say, “I’m done, it’s time to get out.”
  • The sports page and sports networks don’t have much going on, do they? 

All in all, pretty scary stuff we’re going through. I have no doubt we’ll make it through all of this. From a business perspective, now is the time to be active. Waiting this out in the equivalent of a bunker will delay your (business) recovery.

Small Business Survival Tips During COVID-19

I won’t be disingenuous by marketing services when most of us are in survival mode so I will make all readers of this newsletter an offer:

If you have questions about what to do, how to handle things, need a sounding board, or simply someone to vent with call me for free telephone counsel. Or, if you’re sick of being cooped up and simply want to talk, give me a call or suggest we meet for a walking coffee (at a safe distance).

On to a few miscellaneous thoughts on our current situation.

This virus has affected every business. Some are busier than ever – the grocery industry, medical supplies, etc. Most are stagnant at best, in horrible shape at worst – restaurants, catering firms, bars, their suppliers, theaters and other arts organization, athletics, car dealers, repair shops, etc. All are wondering what the heck is going on, when will it end, will it end?

I’ve read a lot on the virus and understand why the plea for social distancing. This virus is wickedly contagious at short distances and has a long life on surfaces, which is why they say don’t touch your face (hard for those of us with tree pollen allergies).

The testing of NBA players showed people can have it, and transmit it, without showing any symptoms. A chart in the WSJ recently showed about 10% of those tested have it, but those without any symptoms aren’t generally getting tested.

The president says he wants the economy back by Easter. Medical experts say it’s not feasible. Would be nice and it does pay to be optimistic but the peak of his predicted to be in April (earlier states like New York, later in others).

No matter what your political persuasion be careful of what the extremes say. This isn’t exaggerated to prevent the president from holding rallies (Fox News) and everything the administration says isn’t BS (MSNBC). 

Conclusion & Advice

Whatever your business is, be doing marketing. Call customers, referral sources, be on social media if it’s a fit for what you do. Be present instead acting like you’re in a business coma.

Take care of your employees the best you can. You want good talent back when this is over. Work with an employment attorney, research the Family and Medical Leave Act, know about State programs, and keep up to speed on new Federal and State legislation and disaster recovery programs.

Also take care of your customers, even if they’re not buying now. This could be better terms, deals, or simply talking with them.

Communicate with your suppliers. If cash is tight, let them know, work out payment plans, and above all, don’t be silent about it.

Work with your bank, especially if you have a term loan and cash flow issues. I’ve also heard a lot of PE firms are telling their operating companies to use the lines of credit to strengthen their balance sheets cash position so consider this.

If business is slow, do those administrative things you’ve put off. Take care of personal things. And be ready because there won’t be an announcement saying, “It’s over, back to normal.” It will sneak up on us.

Business Ownership with No Control

The January 21, 2020 Wall Street Journal had an article titled, “Sears Woes Overwhelm Spun-Off Hardware Stores.” It’s common knowledge Sears is in trouble, big trouble. What this article points out is independently owned Sears Hometown and Outlet Stores are in dire straits because Sears is, to put it bluntly, screwing them.

The stores don’t own the inventory, Sears owns it and they pay the store owners a commission. But Sears is not able to provide goods to sell due to their financial problems. And, they control the prices the stores can sell things for, which are higher prices than on the Sears website.

Arrangements like the above are commonplace. You think you’re in business for yourself but you’re a quasi-businessowner. It may be what you can sell, what you can charge, where you can market yourself, etc. No matter what, if the restrictions stifle what you can do, you should reconsider.

People who want to be in business, versus working for someone else, generally want control, independence, the ability to be creative, and more income (and equity). Pretty much in the above order – money is rarely mentioned first, second, or third.

If you’re thinking of owning a business, know what you want from the business and be very careful if you’re not in full control.

“There is always a well-known solution to every human problem – neat, plausible, and wrong.” H.L Mencken

Creativity in a Crisis

Once again, the phrase, “We live in interesting times” is being used.  There’s nothing but news about the coronavirus and at the same time marketing creativity is starting to flow. 

  • The Catering Company in Kirkland is offering ready-to-heat meal packages with reduced rates, no delivery charges, and emphasizing their food safety protocols.
  • Precor is running ads promoting the benefits of working out at home in the “clean, fresh air.” With many people scared to go anywhere, including the gym, they’re hitting a raw nerve their potential customers have.
  • An HVAC company is extolling the virtues of an air scrubber. Whether it works anywhere close to airplane filtration systems (hospital quality, removing 99.9% of contaminants) it sure sounds good. 
  • I received an email from HubStaff informing me their system helps track the accountability of employees working from home including automatic screenshots, website activity, and activity level based on keyboard and mouse usage. Given and owner told me she feels her working-at-home people get done about 70% compared to what they do in the office I’m sure there will be interest for this type of tracking software.
  • Pagliacci Pizza is marketing touch free pizza delivery. Order online, leave a tip online, and get it delivered at your door with no person-to-person contact.

To me the calm and quiet feels like Christmas and New Year’s with one exception. There still seems to be activity between business buyers and sellers. And, historically an economic slowdown has meant a vibrant buy-sell market as individual buyers fear losing their job (or they’ve lost it), owners say, “Not again, it’s time to retire,” and other owners see opportunity to grow (by acquisition).

“Nothing dates harder and faster and more strangely than the future.” (Author) Neil Galman

The Robots Are Taking Over

The title of this memo is a line one of my son’s likes to say regarding technology in cars, homes, and everywhere else. We see and hear about it every day. Robots in warehouses, manufacturing, Alexa and Google Home, toasters with Wi-Fi, AI doing medical diagnosis, and more.

I’m amazed at all the ideas for using technology where it hasn’t been used before. It works for customers in the Uber/Lyft industry but not so much for the cash-draining companies, so far. If you pay attention, you’ll see a lot of these ideas don’t make it. And it’s because some things need the human touch. Almost 40 years ago John Naisbett wrote Megatrends and stated the more high tech we get the more high touch we’ll want.

As I’m always asked about good and bad industries, I pay attention to this stuff. Walking through an airport it struck me that food will always need the human touch. Sure there’s automation but watching someone pushing a cart of food boxes through the airport made me realize people will always be involved with growing, moving, cooking, and especially eating food.

The key to a good business is to blend technology with people. A mechanic uses computer devices but still has to hook up the machine, turn the wrench, etc. Heating systems may be very automatic, but someone has to clean them, fix them, install them, and haul away the old ones.

What are you doing in your business to blend technology with people? Over the last two weeks I met an owner still doing the books on paper (no QuickBooks) and an owner who modernized the company, dramatically reducing overhead by using technology and its systems. 

The more you can integrate technology into the business the more time you’ll have to meet clients and prospective clients, which is how you grow most businesses.

“True terror is to wake up one morning and discover that your high school class is running the country.” Kurt Vonnegut

Taking Action as Best We Can

Last week I had six meetings, one presentation, and four group (associations, etc.) meetings cancel. This week I have one meeting (so far) and we’re going to get coffee and walk around downtown Kirkland while we discuss things. Trying not to go stir-crazy!

Quite a change in a very short amount of time and it will be like this for at least a couple more weeks. So, Jessica and I planned our short-term strategy and decided since in-person meetings will be rare that we will each try to make 20 calls per day. Just to stay in touch, see how others are doing, and see if we can be of any assistance.

I’ve told clients to keep moving forward so as not to lose momentum. It’s what we need to do along with supporting small businesses as best we can (as in, get take-away food while restaurants are closed).