If you are a business owner, you are likely in crisis mode right now. Some are in crisis because their businesses have been shut down. Others are in crisis because they have lost customers due to the shutdown. And still, others are trying to handle the tremendous load of unexpected work and having to scale. For the purpose of this article, I am focusing more on the first two, but the points apply to everyone right now. There are three fundamental things that business owners must do right now. These top 3 tasks during a crisis apply to any but are especially critical for the crisis we currently face. Whether you have a business of five people or five thousand, this equally applies.
Business owners need to be courageous and decisive. I recently wrote an article about the strong leadership we need right now. Here are three tasks they must stay focused on today and throughout this period:
- Protect yourself, your employees and your customers. You need them.
- Protect your cash flow. Cash is king!
- Protect your future. Or none of this is worth worrying about.
Lead with Courage and Caution
I believe, as many of you know, in courageous leadership. But courage doesn’t mean crazy. Now is the time for cautious courage. It does not mean we need to live in our basements and never see the light of day again. Cautious courage means taking bold, but measured steps. Let me explain.
Protect Yourself, your team and your customers
I serve on the leadership board of my church. When the governor of our state first came out with the request that churches not meet, we thought it was, well, ridiculous. We decided to encourage people to make up their own minds. We encouraged high-risk people to stay at home but welcomed others. That decision lasted about 24 hours.
After we thought about it, and then saw how other churches and businesses were reacting, we rethought our position. We were already in the practice of streaming our worship services live. So it was not a big challenge to get our service online in 48 hours.
But what changed our minds? Three things came to mind:
- We wanted to protect ourselves. We all are leaders. In addition to our church, most of us lead in our communities, our businesses, and other non-profits. Many of us also care for those in high-risk groups. So the idea of any or all of us getting sick was concerning. Business owners, YOU ARE CRITICAL TO YOUR BUSINESS. If you get sick, it will send shock waves through your organization. Protect yourself in order to protect your team.
- We wanted to protect our team members, or in this case, our church members. You should want your team members to be healthy and safe. If working from home is at all possible (even if less efficient), then you should do it. If not, you must consider social distancing strategies to protect your team and allow them to work at a safe distance from others. This might mean setting up temporary offices, staggering work shifts or even reducing hours or furloughing employees.
- We must also protect our customers (in our case, guests, children, etc.). This is the difficult part. How does a grocery store protect its customers? Can a restaurant operate without putting guests at risk? These are the challenging questions our government officials had to answer before they made executive orders. If your business still has direct interaction with customers, you should put every precaution in place that you can reduce risk. Sanitize work surfaces, regularly clean doors and handles, put up protective screens between employees and customers. Get creative.
Why is all of this so important? (Besides the obvious care for humanity). You do not want to be THAT business that infected a bunch of people. We didn’t want to be THAT church that ended up infecting many of its members and guests. Taking the precautions to protect our team and our customers are of paramount importance. Make this your job #1.
Protect Your Cash Flow
Cash is king, especially in an economic downturn. You need to protect your cash flow. If you haven’t done it already, put together a cash flow budget.
A cash flow budget projects when you expect to have cash come in (revenue) and go out (expenses). You have to be realistic here. How many of your customers may delay payment on you (just as you may be trying to delay payment to your vendors). You also should be honest with how much business you will lose during the crisis. Project best-case and worst-case scenarios. Look at your cash flow projections for each.
Now, how does it look? Are you short? Is your cash flow negative – for a day, for a week, for the entire period? Identify how much you’ll need when.
Next, you’ll need to create a mitigation strategy. These strategies will vary, based on how much you need and your own business scenarios. Consider these ideas:
- Line of credit – Do you have an existing line of credit you can tap into? Perhaps it’s a simple line of credit with a bank or an asset-based line associated with a second mortgage. Whatever the case, this can be an effective approach if you are confident that the cash flow will return.
- Borrowing – from yourself or an institution – might be an option as well. Traditional loans can be difficult during this time. But the government has approved to make SBA loans easier and affordable. So this is something to consider. Again, you should have a level of confidence that your business will rebound in order to pay back the debt.
- Delay payments – Work with your vendors to see if you can delay payment. Perhaps you can make interest-only payments on debt. Some types of debt are seeing relief, such as the grace period for student loan debt. Some mortgage companies are allowing for delayed payment for up to 3 or 6 months. All of these are financial decisions but should be explored with your accountant.
- Grants and other relief – There are a lot of government-backed grants and relief programs coming out, at the federal, state and local levels. Additionally, a number of large businesses are putting together grant programs to support local businesses. Explore these to see if you qualify. These usually take time, so it might not help you in the short term. But they could be part of a comprehensive plan to get through the rest of the year.
Protect your future
We are going to come out of this. When we do, will you be ready? What is your strategy for getting back to where you were? Better yet, what is your strategy to take your business even farther than it was?
There are two important things to be thinking about.
First, what can you do to stay relevant during this crisis? This may involve staying in contact with clients, providing services that are important to them, and doing everything you can to help the community overcome this challenge.
Now is not the time for profiteering. Now is the time for business leaders to step up and help each other. This week I was talking to one of my business partners, a commercial realtor. He knew I had healthcare clients. He asked if they needed masks. I told him they did and that we had been looking for them everywhere. He had an extra box and donated them to them.
On the way to deliver the masks to my client, I took a call from another business partner of mine. He’s a senior adult with a heart condition. I mentioned I was taking the masks over to my client. He said that he had been looking for one for him and hadn’t been able to find any. I made a quick detour and dropped one off at his house on the way. These are small examples, but it demonstrates selflessness and care for the community.
Stay relevant with an appropriate amount of communication to your employees, customers, business partners, and prospects. For some businesses (health-related, finance-related, etc.), this may mean daily communications. For others weekly or less is appropriate.
Adjust your course as necessary
There has never been a better time to adjust course than right now. Think of it. You have a global slowdown. Everyone is impacted. You don’t lose much (if any) competitive advantage by slowing down and pivoting.
Consider what has been working in your business. Consider what’s not working. What have you thought about doing over the past few years that you never had time to do? If you are a consultant like me, you may write a book, develop a new course, or design a new service offering. For my clients in healthcare, they’ve stepped up their telemedicine offerings. For my restaurant clients, it’s time to start takeout and delivery options.
Pivoting is scary, but now is a great time to consider it. When the economy “reboots” in the next few (hopefully) weeks, you can be in position for a new approach, a new strategy, a new product or service. It’s completely up to you.
Let’s talk about these top 3 tasks during a crisis
I offer free 30 minute conversations to talk about your strategy. No selling. No fees. And certainly no surprises. Just a chance to talk. Email me at firstname.lastname@example.org or schedule time on my calendar.