Don’t Assume a Universal Based on Your Situation

I was on an online discussion event recently when a lady said (and I summarize), “Nobody will want a car anymore because we’ve shown we can work from home and have things delivered.” My reaction was, that’s really stupid. She took her situation and applied it to everybody (both all people being able to work from home and about the need for cars). And someone, somewhere is paying her for insight like this?

How wrong was she (about the cars)? It seems very wrong given on May 16 the Wall Street Journal had an article about how auto manufacturers are gearing up. They’re assuming, and hoping, the rest of the world emulates China where auto sales are skyrocketing because people don’t want to ride buses, subways, trains, or be in an Uber, Lyft, taxi. (There have also been articles about how car rental companies may flood the market with cars for sale given their industry was hit so hard.)

The business point here is, don’t rush to judgment, especially based on an isolated instance. At this time, we have people predicting a slow recovery, V shaped recovery, and everything in between. And the stock market is its own animal. My comment is the recovery will be different for different industries. I do think it safe to say storefront businesses will really have to depend on how comfortable customers are returning (versus it being about the business owner wanting to open).

What’s Going On*

Over the last couple months I’ve been on a lot of webinars, Zoom meetings, and other online events, as I’m sure many of you have. Besides my Zoom Business Social & Happy Hour events I’ve attended ones hosted by Business Brokerage Press, Mark Cuban, Alan Weiss, Ted Leverette, Patricia Fripp, and others. Here are my take-aways from them, in no particular order.

  • Make a great first impression, including on social media. Be polite and appear better than others.
  • The best thing to do with employees is communicate and make them feel comfortable. More communication than ever as it will create trust.
  • Ask your employees! And don’t use language of war and fear.
  • What would you do different if starting your business now?
  • It’s important what business buyers say to sellers and brokers (first impression). It’s equally important what business sellers and brokers say to buyers, especially qualified ones.
  • We all need direction not conditions. You have to be for something (which reminds me of the verse from Hamilton, “If you stand for nothing, Burr, what’ll you fall for?”).
  • Be a sounding board and authentic.
  • There’s more “checking out” others than ever. What do people see when they Google your name?
  • People are terrified and scared.
  • Be a resource; write a lot of content.
  • Internet marketing will stay strong.
  • What’s going on should make us willing to look at different ways to do thing.
  • An upside to Zoom, Teams, WebEx, etc. is you get to see people as they live, not as they present themselves for business. Their kids, dogs, cats, etc. let you get to know them better.
  • We (our clients, customers, and ourselves) seek validation.
  • Any company can do well in a boom.
  • Ask, what will change forever?
  • Some owners won’t have the stomach to keep going (and will want to sell).
  • If you’re not changing your marketing be prepared to do so.
  • You will recover.
  • Errors are seldom fatal.
  • People crave confidence.
  • Don’t use this situation for procrastination.
  • Be present online with 60% tips and 40% sales related.
  • Block people on LinkedIn who ask to connect and then try to sell you something.
  • From an insightful PE guy before it really hit the fan – expect GDP to decline by 10% or more, unemployment to hit 15% or more, and it will be really tough for many people for 18-36 months.
  • He also said entertainment won’t return soon and as an example noted Taylor Swift cancelled her tour even though 15-31-year old people don’t seem to care about anything (like the virus).

* Thanks to Marvin Gaye for the title. J

Make a Decision

One could write a long essay on businesses lessons from the virus crisis, there are so many, both good and bad. One of the top lessons is about making decisions.

Here in Washington, our governor does not like having to make decisions (other than, it seems, to be in charge of everything). He waffles, postpones, is forming committees (and we know how efficient and effective government committees can be), and is creating backlash.

While I’m not in New York, Georgia, or California, it seems those governors are much better at making decisions. Whether you agree with those decisions (or if their decisions worked out okay) is not the point. They’re taking action. 

Many years ago, a very wise and experienced businessperson told me one of his best attributes was to make a decision and move on it. He said even if half of his decisions were right, he was way ahead, versus not making a decision. And then there’s Grantland Rice who said, “A wise man makes his own decisions, an ignorant man follows the public opinion.”

Tying it to my business, during buy-sell due diligence, some buyers get analysis-paralysis. They need to make a decision and move.

Deficits and Protection

The May 5, 2020 of the Wall Street Journal was, not unexpectedly, filled with articles on the virus. The ones standing out were the headlines on the front page discussing the massive amount of new debt and the risk workers and companies face as businesses reopen. 

I wrote a few months ago about how we’ve been running huge deficits in a booming economy instead of reducing the deficits. Now we’re looking at borrowing $4.5 trillion this fiscal year so the economy had better get super-healthy pretty darn quick.

But the above falls into the, “That was then, this is now” category. One of the best lines was from a director at the Committee for a Responsible Federal Budget (which seems to be a bi-partisan organization) who said, “When your farm is burning you don’t worry if you have enough water to make through the next three crop seasons. You put out the fire and then you worry about it later.”

So it’s all-aboard to pump up the economy. But, as I wrote in a recent Random Thoughts memo, what if the customers are too scared to come back? We’re already getting reports of customers and employees being scared to return to work in states that started opening up two weeks ago.

Which brings us to the second subject, the dispute about the government giving businesses liability protection against worker lawsuits in regard to getting COVID on-the-job. The meat packing industry (vegetarians can laugh here) is at the forefront of this. The President has ordered them to stay open, workers are scared, many can’t work as they have the virus, so it’s the proverbial “can of worms.”

The Republicans want full protection for businesses, the Democrats don’t, fearing companies will take advantage of workers, and the U.S. Chamber of Commerce is in the middle, wanting protection for firms that follow federal and state guidelines. I can see both sides. A business, especially when ordered to be open or considered essential, won’t want the risk of lawsuits. Employees have good reason to fear bosses will not prioritize their safety to meet production numbers. The Chamber’s position seems to be a good compromise.

Again, a couple interesting situations with no easily agreed to solutions.

“You may glory in a team triumphant, but you fall in love with a team in defeat.” (Sportswriter) Roger Kahn

One Bad Apple

In college basketball there are players known as being, “one-and-done,” as in playing one year for the college team and then going off to the NBA (because of rules preventing them from going to the NBA straight out of high school).

As a casual fan, I’ve come to appreciate the job certain coaches do with these players (aka prima donnas), not to mention their parents. Most of these players don’t want to be in college, it’s only a steppingstone, and often they tend to be culture disrupters. This appreciation comes from seeing all the other teams where these one-and-done players cause the team to underperform.

It’s just like in business, isn’t it? You strive to build a culture for growth, profits, advancement, and an enjoyable workplace and yet one person can damage, if not destroy, this. In an owner group I’m in I’ve heard about employees who:

  • Refuse to cooperate with others, it’s their way or no way.
  • Exhibit inappropriate behavior, sexist (sexual) in nature.
  • Bully co-workers.
  • Leverage special-class status (threatening that any action towards the employee would result in a legal action based on said status).

The above and other situations are why there’s constant interest from owners and managers on culture, employee relationships, managing all the HR regulations, etc. It’s a balancing act whether you manage single digits of people or hundreds. Unfortunately, there’s no easy, quick-fix solution; it takes patience and skill.

“Anything can happen, but it usually doesn’t.” (Humorist) Robert Benchley 

Your Business is Really a Community

I wrote this in Antigua, West Indies on another Rotary service project installing computers and Wi-Fi networks in schools, training teachers how to teach more effectively, with and without technology, and setting up our eighth sewing center.

As we were organizing the latest sewing center it really hit me how big community is on the island. While US cities from New York, to Seattle, to many others have neighborhoods and those neighborhoods have organizations, in Antigua it just seems they are tighter.

Main reasons for this are many people don’t have cars, they often stay in the area they were born, and so very much of their lives center around church (many, many types of churches, most of them small given the lack of mobility). They help each other on a regular basis. Ladies we would not consider to be “well off” sew clothes for those less fortunate because they care.

Think about this in regard to your business (or, for advisors, your client’s businesses). Community is like teams within a business. Most business buyers I meet tell me they are good at team building. Given a business is its people, both employees and customers, being able to bring employees together for a common goal is incredibly important. 

I recently wrote about our most recent Getting the Deal Done Breakfast Conference and guest speaker Bob Donegan, president of Ivar’s. Ivar’s has employee turnover less than 1/3 the industry average. Why? Because they value their people, give them advancement opportunities, and decision-making authority, especially if there’s an unhappy customer (from management down to maintenance people they can offer unhappy customers remediation). 

In a recent meeting with a roomful of business owners the following was asked, by an owner looking to buy another company, “What do I do first after closing?” The common answer was, talk to your people, ask them what they would do to grow the business, and, above all, listen. Good advice whether after an acquisition or any other time.

“Man’s character is his life.” Heraclitus

A Great Team Equals Success

We’re in Antigua, West Indies, on our Rotary project, working in the schools. Over the course of the trip I’ve had 12 meetings (in seven business days). They’ve included:

  • Government – meeting the acting Prime Minister, the Board of Education, and the Director of Education (really the COO of the school system), the Minister of Information and Technology, and the Director of Education.
  • Funding – a (great) meeting with our top non-Rotary funding source.
  • Media – appearing on Good Morning Antigua and a morning radio show.
  • Rotary – attending the Rotary Club of Antigua’s meeting.
  • And a few others.

This project is like business, there are partnerships everywhere. In business you have partnerships with customers, employees, suppliers, advisors, and more. In addition to the above Rotary, funding, and government partnerships my Rotary club also partnered with:

  • The Bellevue School District’s technology department, to provide the people to install computers and Wi-Fi networks.
  • Our trainer, who we hire to instruct the teachers on how to more effectively reach their students using technology (lesson plans, exercises, interactive, etc.).

Just like a business, we couldn’t do it in a vacuum. We need all of the above. And the result has been we’ve had an extremely successful trip, probably our most productive.

“We learn from history that we do not learn from history.” Georg W.F. Hagel

If You’re Going to do Anything, Make an Impact

At a recent meeting of the Bellevue Breakfast Rotary Club, I barely paid attention to 90% of the program. Why? Because in the first few minutes the speakers said a few things that got me thinking (and ignoring most of the rest of their talk). To summarize what they said:

For whatever we do (business, personal, charity, etc.) we need to not consider the actions, the money, or anything else other than the impact we make.

What is the impact we make when we do things? For example, I wrote this while in Antigua, West Indies, on our annual trip to work in the community and schools. Our impact is least five things:

  • We give Bellevue tech students incredible on-the-job training as they setup computer and Wi-Fi networks (and live with local families). 
  • The Antigua teachers are learning to use computers to reach their students more effectively.
  • The students learn via different means (and learn more we hope).
  • We’ve created more accountability (from the adults in government, especially when we we’ve had to cancel projects because they didn’t live up to their obligations).
  • Ladies learn how to sew, improving their economic well-being, increasing their sense of community, and greatly increasing their self-esteem.

What about in other, more day-to-day, scenarios? It’s about the result. In one of my first sales jobs the manager told me to never think about the commission and only think about how I/we were helping the client, i.e. the impact we have on them. Here are some examples close to my business:

  • Whether it’s interactive or by example we should be impacting and improving our family relations and abilities. When Vince Lombardi was coach of the Green Bay Packers, he said to his players their priorities were, “God, family, and the Green Bay Packers.” So I list family before anything work related.
  • As an employee you should be making an impact for the company where you work. They have to benefit (profit, financially, culturally, and community wise) from what you do. If they don’t, why do they have you there.
  • When I help someone buy a business it’s a life-changing event. They are taking control, which is quite an impact on their family and themselves.
  • The same can be said when someone sells a company and moves on to their next great adventure in life. The impact is often phenomenal.
  • Maybe what happens before a sale is more important. If you, me, or anybody else can help someone achieve balance, be more productive in less time, or enjoy life more, it can be a much larger impact than buying, selling, or doing their job better. 

Conclusion

Sales managers (should) tell salespeople to take the necessary actions (calls, meetings, proposals, etc.) and if they do the impact will be helping a customer. Whatever you do should be focused on the impact you make on others and if you do that you’ll make an impact on your own life.

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

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.