When there’s any global or economic crisis, such as the current COVID-19 pandemic, it’s natural for businesses to fear what the future holds. While the coming months or years may seem uncertain, there are ways you can assess and adapt your business to help you weather the storm.
We’ve identified three types of businesses based on what was going on in your business before the current situation, as well as what you should be doing now to keep your company moving forward.
Let’s dive in.
What condition is your business in?
Before you can react appropriately, you need to audit your current business. Here are the questions you should use to gain an understanding of your position:
- Do you have reliable, well-documented processes?
- Are there established communication channels and rhythms between employees?
- Is there trust between the leadership team?
- Do you use multiple marketing and sales channels to drive revenue?
- How impacted will your customers be? Will they continue to buy your product or service, stop completely or somewhere in between?
- How much of a financial “runway” do you have to continue operating with, particularly in times of decreased revenue?
Based on your answers to these questions, you’ll fall into one of three categories:
- Survive at all costs
- Assess and adapt
- Thrive
These three levels cover how your sales have changed, whether or not your business can serve customers at home, and your ability to maintain current business expenses.
What your business should be doing right now
You likely already have a sense of what state your business is in, and for how long you can continue doing “business at usual.” Now let’s cover what’s most important—your next steps.
1. Survive at All Costs
Businesses in this category are either cash-poor or are in an industry that has been severely impacted by stay-at-home orders, or both. If relationships or communication are rocky, income streams are limited, or financial health is weak, it’s time to go into conservative “survival mode.”
What to start doing today:
Cut expenses as fast as possible. It will feel uncomfortable, but it can mean the difference between your business surviving or not.
Renegotiate any payables. You may not be able to push back obligations for all payments, but it’s worth it to try.
Accelerate receivables. How can you bring cash in fast? Try to hasten payouts where appropriate.
Find new ways to drive revenue. How can you boost sales? Some may argue that discounts or sales can train customers to pay less, but right now, you need cash flow.
2. Assess and Adapt
If your business has seen a dip in income, but you see an opportunity to adjust to circumstances and come out on the other side of the crisis, you fall into the “assess and adapt” category. Your priority now is pivoting your strategy to maintain a competitive advantage.
Examples of businesses successfully adapting include companies that have begun making face masks, field sales companies who can switch to cold calls, and restaurants offering delivery or food/alcohol sales.
What to start doing today:
Cut variable expenses. You don’t need to slash costs as much as some businesses, but you should take a second look at variable or non-essential expenses to conserve cash.
Plan for revenue drops. Hopefully, you never see further declines in sales. However, you should plan what expenses you’ll cut next if you need to slim down further.
Determine how to continue serving customers. You may not be able to operate as you once did, but how else can you still help customers? Think about where they need support in these times.
Get creative. If there ever was a time to put on your thinking cap, this is it. How can you alter your offerings or meet customers in new channels?
3. Thrive
Some organizations, thanks to their prior financial health or industry, aren’t at risk of going out of business. In fact, companies such as at-home workout software or equipment, medical supply companies, or essential goods manufacturers may see an increase in sales.
Even though you’re in a good position, there are still opportunities to adapt and improve.
What to start doing today:
Bring in newly-available talent. As businesses around you suffer, so too will their employees. There may be talented employees who are now looking for a job that might be a perfect fit for your organization.
Ramp up production. If you see an opportunity, seize it. You may have a hectic few months, but the world needs you now.
While there may be a tendency to make quick corrections during a crisis, your team needs a leader in times like these. If you’re trying to adapt your sales strategy to stay competitive, check out our webinar, Stay Productive Knocking Doors While Social Distancing.
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