You have made the initial quick adjustments to your business to deal with coronavirus shutdowns and covid-19 shelter in place directives. Hopefully your business is stabilized for now and everyone is safe. But for most businesses the future is unlikely to look like the past. For most business owners determining and preparing for changes as the ramp-up back from the coronavirus shut down begins is unclear.
How do you prepare your business, including your employees, customers, suppliers, and others for the future with all this uncertainty?
- Business planning, strategy, and role playing after covid-19. Develop a simple easy-to-adjust cash flow projection, key indicators, and bullet point improvement plan for the next 12 months. Overly complex projections will actually impede what needs to be understood. A simple model that captures the big risks and rewards is perfect. In the end you want to develop a few pages you actually use. Run “Best”, “Likely” and “25% below the worst you can imagine” scenarios. Look at how to increase revenues and cut costs. Work it through to staffing, possible renegotiations on fixed costs, etc. Bounce this off trusted family members, key employees and advisors. Talk about it with anyone with business sense you respect and trust that will work through it with you. This will open up possibilities and solutions so as things happen (good and bad) you will have already given thought to many situations and can make decisions from a place of reason, not just emotion.
- On a daily basis monitor sales, variable expenses, and cash (as necessary). Revenues and cash flow are the equivalent of blood. You must keep some in the business and stay focused on small day to day matters that improve business sales, reduce expenses, and protect business cash flow.
- If possible, particularly for businesses with substantial contracts, keep your fingers on future sales. Stay in touch with key customers, key suppliers, and politely ask difficult questions essential to your survival. Is the contract funded? How will future payments be made? How is timing of awards in the pipeline expected to change? Are suppliers able to perform? etc. For many contractors and others, status WILL change over time as your clients better understand how the response to coronavirus is affecting them and adjust. Check at least monthly. Check more if that makes sense. Make tough decisions early. Don’t delay.
- Grow key people. Now is a time where they can shine. How can you help them take the next steps in responsibility and decision making? Adjust systems for virtual workers and actual volumes to keep control but not over-control.
- Communicate and Lead. Leadership counts in times like these. Covid-19 is scary particularly where many people are infected and ill. What specific measures are your business instituting to keep people safe? A communication vacuum allows fear to grow. People want to know how they are going to come out of this crisis. What is the plan today, tomorrow, and the next day. They also realize plans are going to change as necessary. Treat your employees like the adults they are. Deliver bad news with empathy and include what is being done to overcome obstacles.
Planning sometimes seems like a silly thing in a crisis but it is your chance to work through options and generate ideas early. Like the Boy Scouts always said, “Be Prepared”. That is still very good advice.
We have communication, projection and cash flow tools and experience to assist you in your business planning and preparation. Should you be looking for guidance or support, please reach out.
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