It’s not a fun topic, but in 2020 there are many businesses that are seriously struggling and may or may not make it through.  The steps below are emergency measures for those businesses, and will need to be put in place until the business recovers.  These are unpresented times which necessitates taking unusual measures with the hope of pulling the organisation through.  This is not a plan for otherwise healthy businesses, although it is certainly a good time to reassess all our operational models.

1. Current Reality

To begin with you need to look at what cash you have available in your business, from all sources and this needs to be a concrete number.  Next you need to assess the fixed costs to keep your business running.  This does not include non-essential and variable costs.  Once again, you should be able to come up with an accurate number as these costs typically do not vary from month to month.  The next figure you need to establish is your operating costs.  As these can vary from month to month, use your best average.  After this, list your revenue.  This is your best estimate of the revenue you expect over the next 30, 60 and 90 days.  Be as realistic as you can.  Lastly, list any and all constraints that you are facing right now.  In the current environment, there could be many.

This now gives you an accurate picture of your current reality.  It is vitally important when a business is under financial stress, that the current reality is clearly defined.  In order to make a positive difference, this is the starting point – playing ostrich only leads to lack of action, because of a lack of clarity around the current reality.  Clarity is key!  

2. Vision

What is your vision for your business over the next period, the next 3 months through to 12 months?  Ask yourself questions like: Who are we?  Who do we serve? What problem do we solve? What transformation do we deliver? Your vision needs to become crystal clear – you need to have a distinct picture of where you want your business to be in the next period.  You need to consciously put aside your current reality above as you work through this process.  Setting vision can be a complex matter and beyond the scope of this blog, so you may need to enlist some help.  One good resource is the book by Michael Hyatt, The Vision Driven Leader.

3. Immediate Action Plan

As your business is in a stressed state, it’s time to take some radical steps to immediately reduce the bleed.  You need to freeze all spending, for now.  Sweep your bank accounts, particularly looking for any unnecessary payments which may also be automatic payments.  You need to make a brutal call on all expenses, now.  If you do not have tight control and visibility of all automatic debits from your debit and credit cards, cancel all cards and order new ones.  This is the quickest way to get control back.  This is not about honouring payments that are due, but about wisely administering your resources.   Remember to set up again those essential services that you need to keep your doors open.  Reassess your overheads like rent and significant expenses like HR.  Be realistic in terms of your needs right now.  If you need help with your rent, talk to your Landlord early.  If you can exit and downsize, consider this too.  Many businesses right now are basing themselves from home, and this may work for you too.  If your business is going to fail because you are carrying too many staff, you will need to make some hard calls – do it compassionately and considerately, but do it.  Next, collect from clients those who owe you.  Don’t labour under the illusion that nobody has money.  That is simply not the case.  You have every right to your dues, you need to proactively ask, if your clients are stalling.  Check and pause all your marketing campaigns.  This is not a time to stop marketing, but it is a time to check and ensure that your messaging is still appropriate and current in today’s landscape, and that your spend is returning on your investment.  Once you are satisfied with your marketing audit, it’s time to push the ‘go button’ again – don’t waste time on this.  Offer incentives and discounts for early payment.  Remember the age-old saying “Cash is King”.  That is truer than you can imagine!  Discounting in a good economy is generally a very bad idea, but when you’re bleeding, any cash, particularly early cash can make a huge difference.  Next inventory your assets.  What resources do you have at your disposal that can be used or even repurposed?  Think physical, IP, content, processes, services, HR, email lists, social followers, customer lists, prospect lists, marketing already paid but not yet running etc.  Make a list of all your assets and brainstorm how or where you could use or repurpose these. These are all things you own, so use them!

Now it’s time to ‘sell stuff’.  Anything!  What do you have lying around your business or even at home that is no longer needed?  Put it on Trademe and turn it into cash now!  Cancel (almost) everything.  Things you don’t need that are not essential, if you can do so, cancel these now e.g. subscriptions.  Offer Services.  These are services that are not part of your core business, but are any service that you can provide for which you can be remunerated.  Think outside the square for generating immediate cash flow for now.  Create ‘flash sales’ and only in this environment, as above.  What are your ‘Pivot Potentials’ – think new offers, digitise, virtualise, new business etc.

4. Build a ‘Digital Division’

There are very few businesses today that should not be building some form of a ‘digital division’.  This doesn’t necessarily take away the need for bricks and mortar (although it might), but is an essential pillar for your business in today’s economy.  Failure to jump into this stream will almost certainly be the death null of your business.  One element of this is the ‘Personality Based, Strategic Influence’ aspect – people do business with people they like, it’s that’s simple.  Your thumbprints should be all over your business, both online and offline.  Create digital products – trainings and educational content, courses, video material, instructional products, demonstrations etc, whatever works for your industry.  Build an email list.  Offer webinars.  Engage in a serious Social Marketing campaign.  Build Funnels.  And finally, make offers – online digital products and services.

John Robertson

Principal Coach

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