In these uncertain times, anyone who owns or runs a business (particularly a small to medium sized one), will have to do a few things differently in order to get a good outcome. In fact, the business landscape may have changed forever, in many ways.
Personally, I believe this crisis will fall into 3 stages:
Where we are now, and will continue to be for the next 2-4 months, is a state where a majority of people will be shell-shocked and uncertain as to whether their business will survive. For example, recent surveys suggest that over 40% of SMEs do not have the cash reserves to last more than 2-3 months.
A good many people will want to bunker down in their caves and hope to wait it out. More still will be looking to abandon their dream of self-employment, and return to a PAYE position. However, the anecdotal evidence I have acquired from talking to hundreds of my customers over the past 3 weeks, suggests there will be some medium term delays [i.e. 6-12 months at least] before they consider hiring any new staff at all, let alone large numbers of them.
The surviving SME’s will want to be as agile and lean as possible, and will adopt a strategy which sees them taking immediate action to resume what I call SPPAMW activity (sponsorship, promotion, PR, advertising and marketing, including all web based plans), because they realise that if they don’t, they will have to come out of lockdown with an empty sales funnel, which could take many months to fill.
Others, like the gin distillery owned by the ex-cricketer Shane Warne, are using their machinery to make hand sanitiser, because all the pubs and restaurants which bought the gin are closed. So, I would ask, ‘what can you do differently in your business?’ For example, some people will be writing a new business plan, so when they apply for funding post-lockdown, it has a better chance of being accepted by lenders.
This stage will come after we exit lockdown, and it’ll last another 6 months or so – perhaps even to the Spring of 2021.
The businesses that have made it through Stage 1 will be looking to take advantage of an upturn in the economy. A hundred years of data suggests that we tend to have a period of 10-14 years of economic growth, followed by 2 years of stagnation or recession, and so this latest challenge in the form of Covid-19 has created a perfect storm at the wrong time.
If you’re looking to take advantage, I would recommend focusing on the following areas.
Is your business still relevant to the marketplace? If not, you urgently need to evolve. Can you continue to work from home? If so, do you have to maintain an office and cover the associated cost? Have you made adjustments to your business plan to reflect this?
This is always the fun part where you can hopefully take advantage of a growing market, and get ahead of all the others who are not first out of the blocks.
Consider what things have changed forever, and how you can take advantage. What gaps are there which you can fill?
In particular, I believe 3 areas of business will develop – the first being a shift toward recurring and residual revenue streams, while the next is businesses looking to replace discounting with collaboration and greater value-adding activity. The third development, will be that people look to benefit from complementary revenue streams.
My top tips for now and beyond, are (in no particular order):
- Stay positive! Get the naysayers and doom-mongers out of your life, including most of the media.
- Value add at all opportunity, instead of discounting. For example, a restaurant could offer a free bottle of wine worth £20 if you book a table in the next month. Here, the cost to the restaurant for the wine may only be around £4, but the value added to the customer is £20. If new customers take advantage of this offer, then your customer acquisition cost could be as low as £4 – which would present an outstanding return on investment.
- Increase your SPPAMW spending now, and measure it to the penny!
- Survey your existing customers and ask them, ‘how can I help you?’
- Ask all your customers what motivated them to originally do business with you, then direct your marketing activity accordingly.
- Collaborate! Who can you work with to deliver a better combined product? If you’re a printer, can you connect with a graphic designer and offer both services in a collective way, which appeals to customers?
- Get an industry expert into your business to give you a second (or third) opinion on your processes.
- Measure your spare capacity, i.e. the difference between the level of business you’re doing now, and what you could be doing without increasing your fixed costs. Then, ask yourself how you could capture and monetise this wasted revenue.
- Make it easier for people to pay you! Can you take card payments? Are there any other payment methods you can accept, such as Paypal, Bitcoin, or perhaps foreign or complementary currencies, such as BBX?
- Communicate with your creditors, and if you need it, ask them for help. All sorts of agreements can be reached (for example, perhaps you could offer them some of your goods or services as part payment?), so don’t ignore your debts!
- Communicate with your debtors. Do not be frightened to ask for your money, and see what terms you can agree for payment. Again, could you take any of their goods or services as part payment?
- Surround yourself with great people, preferably experts in their field. Consider how you can all help each other to grow.
- Take advantage of every bit of help the government can provide – don’t be too proud, shy, or afraid.
- Be very wary of high street banks and read their terms and conditions very carefully. Consider getting an expert to help you look over them – especially with ‘payment holidays’, where you could end up paying many times more than the regular payments due.
- Make every day count!
- Control the controllables. If you can change something, do it now. If you can’t, there’s no point worrying about it.
- Use some of your downtime to get more education and training. You could even retrain, if necessary.
- Take risks! Those who hide in caves will starve to death. Going outside might be scary, and you could still take a beating, but you’ll be able to look yourself in the mirror and say, ‘I gave it my all, and I never let the b*stards get me down!’
- Get on Linkedin and work on your contacts; who can you form a connection with who could help you grow your business?
- Keep your direct debits intact. If everyone does this, money will continue to circulate around the economy, which will help everyone, as the velocity of the money supply increases.
- Dare to be different!