In times of great chaos and instability, it’s perfectly normal to feel scared and disoriented. The Covid-19 pandemic and its consequences have been hitting us hard, we’re all more anxious and stressed. We feel vulnerable regarding our physical and mental health, but also about our financial stability.
Whether you’re employed in a multi-national or running your own small business, the responsibilities we all have to those around us – our teams, our customers, our broader stakeholders – are significant and hence our ability to let our concerns, worries or fears get out of control are amplified.
To avoid coronavirus catastrophe, follow these simple suggestions to make sure your livelihood lasts amidst the crisis.
a. Cash Flow Is King
It’s as relevant to conglomerates and small businesses as it is to our family. Building a war chest we can use and benefit from when things get tough is essential to our long-term stability and growth. Metaphorically I keep a small amount of cash ‘stashed under my bed’ – i.e. sitting in a current account gaining no interest – available for a ‘rainy day’. Well for sure the rain is here currently. So, if you need to use those extra resources now is the time.
Make sure your cash flow is as solid as possible, whatever that may mean. For most businesses it actually means reducing costs, chasing down payments and delaying cash expenditure. Ensuring stability of your liquid assets is now your absolute priority. If business is still flowing you can consider shortening receivable periods or even make it ‘cash up front’ if possible. I know it feels uncomfortable but it I’ve seen it make the difference between life and death of businesses in the past.
On collections, review the efficiency of your collection system: get invoices out to the clients immediately, dedicate a specific collection figure and date, monitor timings and follow-ups religiously.
For suppliers, delay payments and agree with every supplier on new amounts and dates or future possibilities.
Many countries have created special emergency plans for the coronavirus crisis, check if you’re entitled to some government support to keep the wolf from the door. Or even consider a small business loan. Cash really is the life blood of business right now.
b. Work for Your Most Loyal Customers but Get Paid!
Some customer relationships are long and valuable, so its normal to be more indulgent when things get rough. Agreeing on receiving a delayed payment can be a courtesy we’re willing to do for some of the clients that have been there since the beginning of our business, but make sure you’ll get paid, or the struggle will be real!
c. Cut Waste & Underperformance
I’m guessing that Margaritas Fridays or Taco Tuesday has already gone, but we need to apply the same mentality to reduce any and all unnecessary expenses. Getting leaner and fitter to run the final sprint will actually help let go of other unconscious burdens you’ve probably been carrying around for some while. Subscriptions to services you haven’t used for years, outsourcing part of the workload to keep your people less occupied, and team building events sponsored by the company.
d. Deal with your Team or Employees
Much as we might like – and I certainly would – we can’t avoid making people’s decisions in times like these. For most businesses round the world now, employees are the most significant cost, so we need to address the situation openly and honestly. What are we trying to achieve (survival), what are the options, and how shall we choose among those options?
In the last few weeks I can’t count how many leaders I’ve supported in making ‘tough’ decisions about staff. But if the business doesn’t continue in the long run, there’ll be nothing left for them there anyway. Reality suggests that 90% of employees are understanding of the situation and acknowledge these decisions are not personal.
On a positive note, it could also be a time to nudge out underperformers or contractors you don’t really need. I’ve been there before, dealing with our teams is tough in these times, but avoidance will make things a thousand times worse.
e. Stick to Your Knitting
Back to the business, do what you do best. Don’t waste energy in diversifying your offer and services too far from what you do well and what your customers love you for. Stick to your golden skills and make them thrive more than ever!
Innovation is always the best in moments of uncertainty. We need to find new solutions and safe ports to navigate the storm. It might seem like a luxury to think of innovating in these times, but this is exactly where leaders step up.
What’s the safest place at the moment for business? The calm port where everything seems to flourish? The www.internet!
How can you bring more of your business online? What products could you sell online? Or what services could you start offering remotely? For sure, when everything settles down, demand will be back, so perhaps you can take the time where everyone else has sat around worrying to create the perfect offering to meet your customer needs.
g. Get on the Front Foot and Connect!
One of my other key messages to leaders has been: Get on the front foot. Be out there chatting to your clients, staff, shareholders. For mental health, social interaction is vital, especially in times of self-isolation and quarantine. We’re social animals and so are our companies! There aren’t so many positive messages out there at the moment so you’ll stand out more if you’re one of the few!
Want to make everyone happier for a couple of hours? Organise an online event, since we all need some fun and entertainment! But don’t forget to invite me!
I wish you all the best with your businesses, careers and livelihoods during the Corona Crisis. Remember, it will pass, so buckle up and be ready to strike back!