The COVID-19 pandemic is forcing business owners to get back to the basics. Remember when you first started out? Pounding the pavement to drum up new business and sealing every deal with a handshake? You thrived then and you can thrive now as long as you focus on what’s important: cash, customers, and company culture.
In fact, if you survive the early days of this depression, you’ll have opportunities that you never had before. There will be fewer competitors in your industry and untapped demand for products and services borne out of a global shift in how people work and socialize.
How can I improve cash flow when no one is spending right now?
One of the first things you should do is lock yourself in a room and list out all of your business’s essential non-labor costs (rent, utilities, software apps, advertising, etc.). After you’ve created your list, pick up the phone and call every business partner or vendor to ask for a discount. They’re struggling just as much as you are and can’t afford to lose your business.
Cutting costs is only half of the equation though. You also need to bring in more cash. A great place to start is by reevaluating what you’re offering and how you’re delivering it. Ideally, this should be a daily routine until the situation becomes less volatile.
Manufacturers are doing this by shifting all of their production capacity into goods that are totally new to them. Financial advisors are offering Zoom calls to help clients restructure their retirement portfolios. What customers want today is not the same as what they wanted yesterday.
Every morning, ask yourself questions like:
- What are customers now doing with our product/service that they weren’t before?
- What new (COVID-19-related) problems can my business help customers solve?
- What totally new product/service could we deliver with existing resources?
- Which demographic is more interested in our product/service today?
- If our employees are working with customers remotely, can we generate new business in faraway places?
And as extreme as it might sound, you could reach lots of new customers by buying out another business. There are plenty of pessimistic business leaders who don’t have the same grit to get through this that you do.
Should I focus on finding new customers or retaining old ones?
The 80/20 rule seems to be the best answer to this question. Most of your efforts should be concentrated on keeping existing customers because you’ve already earned their trust. But obviously, you’ll need some new business to make up for unavoidable cancellations, refunds, etc. Spend 80% of the company’s time and resources on retaining clients and the remaining 20% on finding new business.
Straight cash discounts are one way to retain existing customers, but don’t neglect strategic options, such as:
- Offering credit toward other products/services (e.g., a customer pays the same amount, but receives a certain dollar amount to spend on something else you sell)
- Proactively upgrading customers to a higher product tier
- Reducing your prices for customers who agree to prepay long-term contracts or purchasing agreements
- Letting your most trustworthy customers defer their payments
For new customers, you should focus on creating an irresistible customer experience. That means frequent personal contact — via voice or video chat — with a radically transparent employee.
You’ll gain new business when your salespeople feel empowered to say things like, “That’s usually one of our best sellers, but I don’t feel comfortable recommending it in the current economic climate. This other product/service makes more sense and will tide you over until the COVID-19 pandemic passes.”
How do I create a team culture of both empathy and urgency?
We’ve written at length about how engaged employees are the key to happy customers. But the current economic circumstances will require that you deliver some hard truths to your staff. It’s a tough balance to maintain.
One of the bright spots amidst the transition to remote working environments is flexibility. Platforms like Microsoft Teams make it easy to record calls and online meetings so your employees can tune in to them as their schedule allows. Watch our video on using Teams to “Communicate And Collaborate As If You Are In The Office”.
Cash on hand and happy customers matter more than what shift your employees work. If you have staffers with kids, they’ll need time throughout the day to keep their house in order. Does it really matter whether they work eight consecutive hours or two hours on, two hours off as long as they’re adding value to the business?
Tell your team that they can work whatever hours they want throughout the day as long as they record evening video recaps of what they accomplished. This is a great technology tip to show that you trust them while still keeping close tabs on their productivity.
What else can Upstate New York businesses do to survive COVID-19?
This post barely scratches the surface of possibilities for weathering a pandemic here in Rochester. The important thing is that you iterate and improve what you’re doing every day. What worked well yesterday? How can you make that strategy work even better today?
Don’t over-rely on a single strategy, either. If you put all of your eggs in one basket, you’re playing a risky game. Get together with your management team and come up with lots of ideas for quick wins.
When you’re done brainstorming, delegate them so you start as many as possible right away. Think about it like a cash/customers/culture blitzkrieg. It’s fine if they’re small wins because each one will go a long way toward boosting morale.
At the time of writing this article, the pandemic is still in its early stages. The only government assistance for businesses is the Small Business Administration’s Disaster Assistance. But that could change at any moment so keep checking back here for more information.
Things may get much worse than they are today. The businesses that will come out of this ahead are the ones that don’t obsess over things they can’t control. Stay positive and concentrate on what you can control — we’ve got this.