(Time to read this important Blog article is about 3 minutes)
As I write this Blog, thousands of businesses are shutting down for a month or more. Hundreds of thousands of events, schools, vacations, gatherings and regular business hours are being cancelled. But, if we commit to being our ‘best selves’ throughout this mess, relationships will not be cancelled, kindness will not be cancelled, love will not be cancelled and hope will not be cancelled.
On top of the virus pandemic, Russia and Saudi Arabia, two thugs in different clothing, have conspired to tank the price of oil, resulting in further global disruption. The good news is that the price of gas has come way down and driving is more affordable than it’s been in years. The bad news is that, with everything closed, there’s nowhere to go!
We’re likely headed into a recession, or whatever you want to call a massive global disruption that will affect every business and every life on the planet. There will also be a recovery…but not every business will recover. Some won’t make it. That’s reality. Many weak, marginally profitable and unprepared businesses will disappear.
We’ve experienced several recessions in the past but this one is different. This one combines an economic crisis with a global health crisis. We haven’t seen this since the Spanish Flu of 1918 that infected 27% of the world’s population.
Recessions remind me of a walk in the forest after a winter ice storm. The ground is littered with the thousands of weak and dead branches that broke off and fell to the forest floor under the weight of the ice. My forestry friends refer to it as a ‘severe pruning’!
The interesting thing is that when you walk through that same forest in the Fall, just six months later, those thousands of branches have disappeared. They decayed and mulched into the soil and now nourish the stronger trees that survived. It’s a natural process. So it is in business.
Sadly, many of the most important things you can do to recession-proof and virus-proof your business can’t be done once the crisis starts. As a young guy I ran the mile and two mile in competitive track and field. What I learned early on is that the day to train for the race is not the day of the race. It’s too late.
The first thing that every business and every individual or family needs to do to survive a financial crisis is have a cash or cash-equivalent ‘emergency fund’ to cover at least 6 months of day-to-day expenses. Financial Advisors have been telling us this for years and even our Grandmothers warned us to ‘always save some for a rainy day’. And yet very few businesses or families have that important cash cushion. When times are good, corporately or personally, don’t spend it all. Build up the ‘emergency fund’ for the next recession. There will always be ‘rainy days’ and they will always be followed by a ‘next recovery’. But, first, you have to survive the rainy days’.
The second thing that many businesses need to do is build their e-commerce capability so that customers can do business with them safely, conveniently and remotely. As I write this Blog on March 17th when tens of thousands of businesses are closing their doors, Amazon is urgently hiring 100,000 more people to keep up with the increased demand from online shoppers. Whether you sell B2C or B2B, what’s your e-commerce capability?
There are several other ways to ‘recession-proof’ your business that take time, insight, hard work and constant vigilance. Some of them are:
- creating clear and compelling customer value and experiences that ‘grab’ your target customers, clearly differentiate you from your competitors, make you ‘famous’…and grow your bottom line. Customer value and experiences that make you the ‘wise choice’ for your target customers.
- effectively and consistently communicating that value and experience in a way that builds a clear Brand identity.
- creating a customer database that lets you proactively communicate with and add value to customers who already know and love you, at practically no cost,
- being true and passionate experts in your field so that you can deliver more real help and value than your competitors. Become the ‘caring coach’ for your target customers.
- committing to do the right thing and keep your promises…
…are all part of an ongoing process that seldom work as a quick fix when the going gets tough. So, have you been preparing your business to survive and thrive in the tough times by being extraordinary in the good times…or did you get a bit too complacent somewhere along the way?
But, having said that, there are a few things that can be done quickly in these challenging times to improve your odds of surviving long enough to put the long-term solutions in place before the next downturn. Here are a few thoughts about what to do now…
- Do the right thing for your team, your customers, suppliers, creditors and for the community. Keep everyone physically, emotionally and financially safe, to the best of your ability.
- Be diligent. You’ve heard about how to wash your hands, how to sneeze and how to sanitize at least 100 times…but it’s important. Think of ‘social distancing’ as an opportunity to avoid all those people you never liked anyway.
- Be kind in your business and your life. This mess is not easy for anyone. Simple acts of kindness will help get us all through it. Everyone is stressed…be responsibly joyful.
- When we combine kindness with creativity, magic happens. Here’s a few examples:
- to support local restaurants during the crisis, Uber Eats is waiving the usual delivery charge on meals.
- Rogers and Telus (Canadian phone and internet providers) are offering unlimited internet capability to residential customers to help them work from home for the next few months.
- Shoppers Drug Mart stores (Canada’s largest pharmacy chain) is reserving the 1st hour of shopping each day exclusively for seniors and people with pre-existing health challenges to shop when there are fewer customers and the stores have been freshly disinfected over night.
- Most cruise lines have ceased operations for the next few months and are offering customers a choice of cash refunds or cruise credits. Regent Cruise Line is taking it one step further by offering customers a 100% cash refund or a 125% cruise credit.
So, what acts of ‘creative kindness’ can you offer to help customers through this difficult time and to be their ‘hero’? Sit down with some of the best minds and hearts in your business, right now, and see what great ideas you can generate. Maybe you can be such a ‘good news’ story that the regular media and social media will pick up on and make you ‘famous’ for innovation and humanity.
- Have you communicated with your customers about what you’re doing to keep them and the community safe? And will you continue to communicate them at appropriate intervals with updates or reminders about special on-line offers, if you have an on-line presence?
Have you communicated with your team regarding your commitment to keep them safe, about their working from home, about shift changes, lay-offs and their pay? Have you given them the most support and reassurance possibly? How you treat your staff now will affect your business culture for years.
If you’re feeling resentful about ‘supporting’ certain team members at this time, that may be a clue that they’re non-performers that you should have dealt with months ago. How will you handle that situation in a decent way now…or is now not the time? Tough decisions, but this is why you get the big bucks.
Have you communicated with your creditors who may not get paid on time, your landlord, if you have one, or your bank from whom you may require some additional credit? Have you calmly and professionally explained your situation and negotiated a workable solution that ensures their cooperation and your survival?
Have you communicated with your family and agreed on a plan as to how you’ll control expenses for the next several months?
- Be aware of all the grants and special assistance that will be available from government, banks or other organizations. Your industry Trade Association should be able to assist you with that. It’s their job to know.
- What expenses can be reduced, eliminated or at least deferred for the next few difficult months? I heard a Fitness Gym owner interviewed on TV this morning. He has had to close both his locations indefinitely. 30% of his business is kids’ after-school fitness programs for which he has a couple of mini buses to pick up and drop off the kids. The insurance on those mini buses is $5,000 a month. The first thing that occurred to me was that if the buses aren’t going to be used for the next few months, call the insurance company, suspend coverage and save $10,000 or more. How can you responsibly reduce overhead and conserve cash?
- If the next few months will be s ‘slow time’ for your business, how will you use that time to proactively work ‘ON’ the business, or your department, to be stronger on the other side of this mess? Do you have a list of what needs doing, fixing or improving? Do you have a list of team members who need training or mentoring for a future promotion?
If you’re not sure where to start working ‘ON’ your business, ‘Click Here’ to download our Biz Tool #A-3, ‘Our business has 3 types of challenges…how are we doing?’ There’s no charge.
So, what will you do to make it through this unprecedented challenge to come out stronger and wiser? What will you do to lead with calm and compassion? What will you commit to do ‘on the other side’ of this mess to better prepare yourself and your business for the next crisis? Because there will always be a ‘next crisis’…and then another recovery. Think of it as the circle of life!
For info about booking Donald to deliver his bottom-line insights on management, marketing and profitability at an Industry Conference or Corporate Event…or to discus our Business Coaching program, contact us at firstname.lastname@example.org or by phone at 1 (416) 252-3703 in Toronto, Canada.