If 2020 has proved anything, it’s that disruption is the new normal.
Bushfires, Brexit, drought, floods, climate change, the fourth industrial revolution and now the coronavirus (COVID-19). No-one is immune. No business is secure.
But then we have never been able to predict the future not really, and despite this fact we all make decisions every day, and especially as small business owners, we are always doing things that we cannot be ‘certain’ about. Sure we can do everything we can to make an informed evaluation, but ultimately uncertainty is the only certainty we have.
While our collective instinct may be to panic, worry and feel helpless, there are opportunities for small business owners amid this crisis. We just need to take a deep breath and be prepared to dig deep to identify these opportunities and make the most of them.
Over the years I’ve worked with many businesses as they’ve tackled disruption and the threat this posed to their operations. There are things you can do as a business owner, right now, to deal with ongoing economic uncertainty.
Now could be a good time to ‘rethink and reimagine’ everything you know and look for ways to adapt and grow to secure your business now and into the future.
How To Bulletproof Your Business In 2020
Focus On Your Financials
Identify your safety net – understand where you can seek financial assistance for your business to help you get through the next few months. Can you access low cost finance? What tax breaks are available to you? Smart company has a great guide on the support available to small business state by state, that they are updating as more information becomes available
Determine your current financial position – Do your cashflow forecast ASAP! Take stock of where your business is right now and what cash is readily available. List your debtors and creditors and establish exactly how much money you need to keep things going for at least the next quarter.
Improve your financial literacy – use this opportunity to learn, so you can make informed decisions on how you will ride out the crisis. Consider how your cash flow will be impacted and pull together a plan on how you will make your business work in the next quarter as a minimum.
Keep your costs down – review your profit & loss statements to identify ways to keep your costs down over the coming months. What leverage is there in your fixed and unfixed overheads? This is where using a program such as Xero can help identify opportunities to streamline costs.
Focus on ROI – Look at your cash conversion cycle and identify what levers you can use to improve management of your cash flow. For instance, examine debtor arrangements, staffing mix, volume, under-utilised assets & your inventory levels to improve your cash flow.
Review your investments – identify outgoings but don’t stop investing in your business or in your operations. Make sure you continue to invest wisely in areas where you will get the most value. For instance, look at ways you can invest in free and low cost marketing.
Engage with lenders, creditors and debtors – get in touch as early as possible to discuss ways to minimise potential risks to your business. Talk to your bank, discuss your situation and be proactive in seeking help before your business feels the full effects of disruption.
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Understand The Changing Environment
Get to grips with the economics –The decline in demand may have already impacted your profitability. With the prospect of lockdowns and shutdowns in the coming months, it’s vital you identify where potential economic risks sit both in your immediate and longer-term future.
Understand the types of disruption – is this a temporary and unexpected disruption (aka black swan event) or part of the ongoing fourth industrial revolution which will lead to lasting change? Although different types of disruption will require different strategies, you will still need to unpack the risks they represent to your business and outline your plan to deal with them.
For instance, if your supply chains are affected due to plant closures in China, what can you do now in the short term to guarantee supply? Will this also require change in the long term? In other words, how can you deal with this supply chain uncertainty now and in the future?
Now’s the time for innovation – what are the opportunities that disruption presents to your business? How can you operate in new and better ways? Use this time of uncertainty to test new ideas, understand the minimum viable proposition and see if there is a market for your innovation.
The mechanics of recovery – economic and financial crises are littered through history. The lows can be deep and long but each time there has been recovery. Comparisons are constantly being made to the great depression and the GFC – we will get through this and we will recover.
Small business is resilient – research on small to medium businesses during the GFC showed that while most businesses struggled due to difficulty accessing finance, many SMEs were small enough and agile enough to survive. Small business is resilient. Keep this in mind as your business navigates the disrupted landscape ahead of us.
Build A Robust Business Model
Get back to basics – use this as a time to bulletproof your business and get your business operationally and financially tight. Put the odds in your favour by making sure your business model is solid, you understand your financials and have a focus for your marketing efforts.
Be prepared to do things differently – we’re operating in a new world and we have to let go of the old and embrace the new. Be prepared to do things differently. Remain flexible and open to all possibilities so you’re ready to seize opportunities for growth and innovation.
Review your marketing – in times of turmoil, the best approach is to get focused and get really clear on what you do, how you help and what you do differently to your competitors. Revisiting your brand statement will provide clarity about who you are and what you deliver, help align your priorities and pave the way for you to make fast business decisions in the months ahead.
Contact key customers and suppliers – be clear on how you plan on managing disruption so customers and suppliers are informed and prepared if your supply chain is impacted. This is a great opportunity to strengthen relationships, communicate professionally and build trust.
Have a plan for your recovery – it’s important to have a plan to manage disruption but it’s equally vital to take learnings from the event itself. Think about your supply chains, insurance options, record keeping and general operations throughout the crisis. What can you do differently to strengthen your business for the next 5 years? What can you improve in future?
Change Your Mindset
Accept this is your new normal – instead of waiting for normality, accept that change and disruption is normal. Acceptance is the biggest step you can take right now. It will shift your perspective and help you focus on what you can control, rather than all the things you can’t.
Know what you can control – there is so much uncertainty surrounding us right now which can paralyse your business. Don’t underestimate the power of routine – amid the uncertainty, following your normal patterns will give you a sense of control and predictability. Be proactive and list everything you can control so you can make an action plan to deal with them.
Recognise that everyone else is in the same boat – you are most definitely not alone in this. We are all in this together – you, your competitors, your customers and your stakeholders. Look at how you can work with others and take a collaborative approach to achieve lasting progress.
Understand disruption – the truth is, disruption surrounds us and there are ways to embrace it rather than be ruled by it. The restaurant, retail and professional services industries have been disrupted by digital transformation for some time and I’ve helped businesses in these sectors to reimagine their businesses transforming the value they offer to clients.
This level of transformation may require a thorough reimagining of your entire business model. For example, if you are a brick and mortar business you will need to look at changing up your offering to deliver products and services online. You might also benefit from creating packages for discrete customer groups to become more relevant and competitive in this new world.
Take time to celebrate small wins – it’s more important than ever to focus on the positives and celebrate every win, however small. Change your perspective to stay motivated, keep going and continue to strive for success.
Prioritise building trust and relationships – it’s more important than ever to build a culture of trust in your business community. This will see you through the uncertain times ahead. Check in with your existing clients, see how you can help them right now – be of service.
Be willing to see opportunities – for some businesses it may be hard to see a way forward right now but it’s crucial you don’t close yourself off to the opportunities. Remain open minded, learn to embrace change and look for ways to innovate your business during the months ahead.
Since this pandemic hit, every single client I have spoken to has found a silver lining – every single one. It’s important to work through your options and find clarity in your situation. It might seem like a lot of hard work right now but taking the time to think through every angle is a worthwhile investment right now, believe me.
Lead By Example
Be the leader your business needs – history shows that strong leaders can galvanise people through times of adversity. Be the leader your business needs right now. Be empathetic, communicate with honesty, be transparent in decision-making, listen to staff and stay calm.
Delegate what you can – in times like these, don’t try and do everything yourself as you’ll become overwhelmed. Connect with the professionals who usually support you, such as your insurance broker, accountant, suppliers, subcontractors or tradespeople, and delegate to them.
Prioritise health and safety – lead by example and practice good health and safety strategies. Update policies and give clear expectations to staff and contractors to eliminate confusion, especially in relation to hygiene, attendance, flexible work arrangements and health & safety.
Eliminate administrative barriers – make it easy for you and your staff to work through this period by removing any administrative barriers. Store documents in the cloud so they can be accessed anywhere, allow staff to work from home and streamline your business operations.
Look after your mental health – this is vital for both you and for your team. Familiarise yourself with the support available and take advantage of it. NSW Health has an up to date list of qualified mental health services. Encourage your staff to use these services if required.
Don’t isolate yourself – seek out connections to stay positive. Look for a mentor or an advisor, someone to share your business journey with. Regularly check in with them, even if it’s a quick text or longer phone chat. During a difficult period, human input and contact is even more vital.
I know the value of this as a marketing coach and business mentor. Having someone who understands what you are going through and who has empathy for your situation is key to maintaining a positive mindset. And, a positive mindset is key to managing during tumultuous times.
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We Can Get Through This
Yes, we are facing unprecedented times with a multitude of challenges. It’s not going to be easy to get through the next few months but history shows us that we can survive AND thrive during transformative times. And, that’s what we are facing – a total transformation of how we live and how we work.
To get through change we need to be innovative and we need to work together to find new ways to operate. Innovation often emerges from times of challenge. This is a critical moment for all small business owners as we embrace a future where we will be constantly innovating in an ever-disruptive world.
Remember, you are not alone. In times like this, it’s important to be kind and to help each other so we can get through this massively transformative period in history. If you need help or more information on how to deal with this time of uncertainty and disruption, give me, Sara from Marketing Sense, a call on0400 511 300 or email@example.com.
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