Those of us old enough and grey enough will have lived through more than one economic contraction, however it’s fair to say that none of us have ever experienced a worldwide pandemic like the one we’re all currently facing with the COVID-19 virus.
By the time this article is published, I guarantee things will have developed further, but I read in the Independent on Friday 13th March that more people will lose their homes and their livelihoods as a result of Coronavirus, than will die from it. Even without this stark prediction I already believed that we entrepreneurs have a responsibility to do our utmost to maintain the financial health of our businesses, thus contributing to the health of the economy overall.
So, putting aside the need to protect your workforce and to keep yourselves and your families safe – that’s a given, below is the advice I’m currently dishing out to my clients.
Get clear on your numbers
Warren Buffett famously quoted, “If you can’t see the scoreboard, you can’t tell the winners from the losers.” I like to adapt that slightly, as right now for the majority of businesses it’s less about winning and more about survival, “If you can’t see the scoreboard, you don’t know how much time you have left in the game!”
I’m often amazed how many businesses don’t really know their numbers. As Jim Collins famously says, “confront the brutal facts,” as without absolute clarity on cash, cashflow, margin, breakeven, pipeline etc. you cannot make any sensible strategic decisions, you’re flying blind. No one knows how long the impact of this virus will have on the economy, it’s your responsibility to understand, based on the current facts available, how long you have left in the game – only then can you make sensible changes to lengthen that goal.
Protect your current client relationships
People are nervous and will want to be delay making decisions or holding onto cash, how can you demonstrate that your product or service actually supports them in these changing and uncertain times. Be flexibe where you can. Providing you can survive the short-term economic shock in your own cashflow, demonstrating loyalty and sensible trading terms with your core clients now, will pay back dividends over the long term.
Look for new opportunities
If your revenue is at risk, is now the time to switch your focus to open up new avenues of income. Dig out that online project you’ve had in the ‘nice to do pile’ for the last two years? Can you pivot your offering from a sector that is being hit particularly badly into a different sector that is faring better?
Is now the time to invest in new technologies that will give you a market edge or open up a new route to market.
In downturns, it’s always the weakest and least competitive business that die, meaning that when boom times return and the market begins to expand once again, it’s the strongest businesses and ones that offer the greatest value that are poised to ride that economic wave. Now is the time for disruption.
Although this is the penultimate point on the list, one would argue that it is the most important. As the buying cycle is disrupted the impact on cashflow is always the first to be hit.
Thankfully all my businesses have spent the last few years planning against any potential fallout from Brexit, so I know they will be fine, but everyone’s runway will be different.
- Extend credit terms now, wherever possible. Speak to your suppliers, speak to your creditors, speak to your bank. Painful experience has shown me it’s always easier to extend credit terms, before you’re in the shit. My personal experience, of particularly the high street banks, is that they slam their shutters down when your back is against the wall but are happy to extend credit when you don’t really need it. Put it in place NOW!
- Trim the fat. Don’t cut costs unnecessarily or withhold making investment decisions that were already planned but don’t continue a moment longer carrying unnecessary bloat. Who’s that person who’s been ‘average’ for some time – maybe it’s time for them to be ‘average’ elsewhere. What about overhead? In my experience most businesses can reduce their cost base by at least 10% by actively reducing wastage and inefficiencies. The time is now to go line by line through your P&L and question every cost and if you do have to cut, as my dear friend Lara Morgan has said previously, “If you have to cut, cut like a surgeon. Cut once and cut deep.”
- Access support. Personally, I think our government are doing a sterling job in managing and mitigating, where possible, against the impact of these unprecedented times so make sure you are aware of what’s available. Check the daily updates on www.gov.uk
- In times of economic crisis, there will always be winners and losers and the actions and decisions you make RIGHT NOW could determine which side of the coin you land. Nicola Cook is the CEO of Company Shortcuts. The UK’s leading Sales Acceleration agency helping scale-ups build a profitable Sales Engine for Growth.
5. Reset all your team’s objectives for a 12 week sprint
During the first week of lockdown everyone was working on the hangover of work from previous weeks, they were in catch-up mode - whilst also adjusting to life working from home and in many cases juggling childcare and running around for elderly family members who are in complete isolation.
However, roll forward a week and without clear instruction, coupled with a reduction of normal client demand, your team will likely lower their productivity to fit the time available (a natural human trait), therefore as leaders we need to give clear direction and deliverables that our teams can deliver in the coming trading period. Especially in the sales and marketing function where normal day-to-day activities are likely to be interrupted.
THIS IS THE TIME, to be working on oiling those Sales Engine wheels in preparation for the fire-hose of opportunity that the economists believe will emerge when the restrictions are lifted. Because the government is acting as a short-term economic shock absorber, coupled with pent up demand, when the flood gates open, we will see that pent up demand land on top of normal economic opportunity - I predict in either Q3 or Q4 of this year.
Therefore, I’ve set all my clients the challenge of quadrupling the value of their pipeline by 11th Sept 2020 (the end of the second working week in September) compared to what their pipeline was on 1st March. So if you and your sales team had THAT clear objective, what action would you take now? What marketing campaigns would you be preparing now? What thought leadership you would be releasing now? What podcasts would you be guesting on? What digital content would you be serving up to both prospects and the wider market? What internal work would you do on your sales processes, cleaning up your CRM, researching new potential ’spearing’ opportunities, prepping all of your sales assets and sales templates, streamlining clunky sales inefficiencies, creating a sales playbook - or a Sales Bible to document all of this for the wider team.
What about weekly 'lunch and learns?' Everyone is sat at home, so why not Zoom together and share best practise. Put together 12 topics of excellence and nominate different team members to prepare a 20min presentation, which you share over lunch on a Friday. Record the sessions, and instantly you've created a training library for all employees now or in the future.
When in our lifetimes are we likely to ever be gifted the opportunity again to have 12 weeks to work ‘on’ our businesses rather than ‘in’ them, whilst being funded by central government (in part) to do so.
In times of economic crisis, there will always be winners and losers and the actions and decisions you make RIGHT NOW could determine which side of the coin you land. Nicola Cook is the CEO of Company Shortcuts. The UK’s leading Sales Acceleration agency helping scale-ups build a profitable Sales Engine for Growth.
Her waitlist is opening again for September and is currently taking new applications. If you’re interested in finding out how she could help your business, for an application form contact firstname.lastname@example.org