“May you live in interesting times.” While seemingly a blessing, the expression is normally used ironically; life is better in “uninteresting times” of peace and tranquility than in “interesting” ones, which are usually times of trouble.
These most certainly qualify as “interesting times!”
My clients are asking me what they should be doing to minimize the impact of this pandemic on their businesses and I suspect that you’re wondering as well.
As such let me offer a thought or two about how to navigate the days and months ahead.
As a business owner, what can you be doing today to be the best you can be given the current circumstances?
The McKinsey & Company report “COVID-19: Implications for business” offers some ideas on what we can be doing now.
How does this list apply to you?
- Your Team: When it comes to the people in your business, let’s remember the advice of Spike Lee: “Do The Right Thing.” Now more than ever your team will be looking to you to set the tone. Treat your team right, and they in turn will treat you and your customers right. Brene Brown’s book, Dare to Lead, is a great resource for leading in these times and identifies what leaders can do to improve the culture, even now.
- Revenues: What can you do today to bolster your sales and marketing, first by protecting your current revenues and then by growing? Disney+ shifted The Walt Disney Company from a product/media company to a subscription based recurring revenue company.
- Collections: If you haven’t optimized your receivables process, now is the time. Focusing on all aspects of the process will give you the best opportunity to collect faster than the new average will be. As you can imagine, collecting late receivables now will be tougher than ever. Our team can quickly identify the opportunity you have in this area; schedule a call so we can discuss your opportunities. Call with Jody Ruth
- Cash Flow Forecasting: Now, more than ever, a financial planning and analysis capability will be critical. At a minimum, a rolling 4-month cash flow forecast is necessary, and the forecast generally should be done on a weekly basis. Ideally, a 12-month rolling forecast would be done (first 4 months weekly and the remaining 8 months monthly). We have models that can help you implement a forecast; schedule a call so that we can discuss your specific needs. Call with Jody Ruth
- Scenario Planning: The most important and hardest thing of all is to build some contingency plans. Evaluate at least 3 scenarios–today’s information seems to indicate the best scenario would be recovery at end of Q2, base case scenario would be recovery at end of Q3, and worst-case scenario would be recovery at end of Q4. Do some contingency planning Call with Jody Ruth :
- What does your business look like if sales decline by 20% or perhaps even 40%?
- What expenses do you trim at each of those thresholds?
- What staff cuts must be made?
- Make those decisions now while you are in the best position and mindset to make them.
- Know what triggers each of the actions you have outlined.
While these may be “interesting times,” it is important to remember that many of the most successful people have found their success during the most difficult times. How can you turn the next few months into an opportunity for your company?
If you would like some help or someone to talk to, feel free to use this link to my calendar to pick a time that works for your calendar. Call with Jody Ruth