I don’t need to amuse you with an introduction to the COVID-19 crisis and the impact that it has had on the world from both a health, economic and social perspective. It’s truly unprecedented times.
While most people are working from home in isolation, we tend to have a lot more time to ourselves. Less meetings, time spent socialising, grabbing a coffee, going to get lunch etc. That in itself sounds like a good thing, but it also means that we have more time in our own head which can detrimental if you’re not harnessing mindfulness and emphasising positivity & personal development. It’s so easy to panic and just say ‘well, this is shit’ and go into a state of paranoia when almost everything we see both in traditional and social media is negative or scare mongering. Now more than ever, it’s important to know the facts, come to terms with them & worry about what you can control in an ever-changing landscape. Don’t spread fear, just facts.
Both from a business perspective, and a personal one, we firstly need to accept that the coming months will be uncertain. Humans crave certainty, whether it be a fixed rate on your mortgage, a secure income, booking holiday dates a year in advance or just knowing what we’re having for lunch. We like to know when things will happen and how. But it doesn’t necessarily work like that, and these times are no different. We don’t know when a full lock-down is coming (if at all), we don’t know the extent of what types of businesses are going to be able to operate, we don’t know how long it will last & we don’t know the extent to which our livelihoods will be impacted. Nevertheless, one of my favourite quotes is:
Get comfortable with being uncomfortable.
It could not be more accurate at a time like this. As business owners and humans, we need to accept the fact that our landscape is going to be ever-changing and we need to be mentally and emotionally prepared to adapt quickly to the changes. This is not the time for knee-jerk reactions to every media article, to every rumour from your mate who knows someone who works in government, to the uncertainty. It is the time for balanced decisions based on the facts and accepting that we do not know exactly what’s going to happen, and that’s okay.
YOUR ACTION PLAN
It took me a while to actually figure out how you write an action plan when there is no start date, no end date and you don’t know what’s going to happen in the middle. But we’ve got to be adaptive to the situation, fluid in our strategies but clear goals in mind. For most businesses during this time, it’s about staying healthy & reducing risk. It’s probably not the time to go out and purchase big risky assets, implement growth plans and expect it to be business as usual. The landscape is evolving and you’ve got to keep up.
For most during this time, it’s simply about surviving rather than thriving. It’s about getting through to the other side of this pandemic with the least amount of damage as possible. This should be the first and most prominent element of your action plan because your strategies will change as the landscape evolves, but your goal should remain the same.
Reduce Risk Factors
This is a good opportunity to take the time to really look at our businesses. Are we operating efficiently? Are we actually achieving our goals? What’s our cash position? Cash burn rate? What are our strengths? What are our weaknesses? What products are quick sellers? Which products take longer to sell? It’s time to look at every nook & cranny of your business to identify where you can reduce your risk during this period.
– Cash is king. What expenses do you have that can be reduced, re-negotiated or simply cut? This is not a time to be wishy-washy because the reality is that if your revenue falls, which unless you’re in the 1% of industries that benefit during this time, you’re likely to see a decrease in revenue. A study in the US has estimated that eCommerce businesses will see an average revenue reduction of 30%-50%. Can you reduce 30-50% of your expenses if you need to?
– In Australia logistics companies are still operating, but for how long? What’s your plan if your 3PL or warehouse needs to suspend business? What if Australia Post or DHL stop running for non-essential businesses? Can you offer pre-orders on products at a reduced rate? Maybe you can look at services like Zoom2U and offer courier delivery (if permitted).
– Whilst there is a big emphasis on reducing unnecessary expenses, I believe there needs to be a strong and adaptable approach to revenue. How long can you survive if your business drops in revenue by 50%? What if it drops by 30%? It’s important to brainstorm strategies that can produce revenue in different scenarios, for example if logistics ceases. Could you sell a digital product? A video? Run an online class? Perhaps a 30-day workout if you sell gym equipment etc. We need to get creative because it’s important to keep that revenue flowing (as much as possible) through the books.
- Consumer Spending
– In Australia we have seen a devastating number of job losses. I personally haven’t seen anything like it, just the mass cutting of staff across the country particularly for a number of my friends in the sports industry. This means that people are going to be tightening their wallets, there’s going to be less disposable income for people to spend on discretionary products. Are we able to create or sell a similar item at a lower cost to maintain sales? Perhaps it’s about packing in more value? We all need to adjust and accept the fact that people will likely be hoarding more of their money in the next few months because of the personal and financial uncertainty.
This is a time to pivot your branding and the way you communicate with your customers. This is the time to become more relatable, if you’re selling sports clothes, you’re not marketing them to be worn at the gym, now you’re marketing them to worn for comfort at home. If you’re selling a fruit subscription box, you’ve gone from being a ‘that would be nice’ product to more or less an essential service. Your product, your offering and your messaging to customers must change.
Brands are adapting by offering free home workout videos, live streaming health sessions, meditation and yoga, they’re giving their customers advice and resources for isolating at home etc. For example, for one of my businesses UNCLE JACK, we’re re-introducing an old campaign of ours #OwnYourTime. This time around, each day will be a different idea, tip or trick to #OwnYourTime during this period of isolation and uncertainty.
Companies such as WhatsApp, Uber and Groupon were all started around the time of the 2008 GFC. The chaos and turmoil of the global pandemic that we’re facing is going to provide opportunities not just for new businesses, but opportunities for existing businesses to evolve. Apple is a great example of a company that evolved during the dot com bubble to become a powerhouse. Great businesses evolve over time, they don’t create the same product over and over again for 100 years, they adapt, they innovate, they find new markets, they create new technology, they develop more processes and they create stronger revenue streams. Amidst the storm that is COVID-19, I encourage you to not only reduce the risk factors in your business, but also keep a keen eye on what opportunities may be staring you down. It’s time to put your entrepreneurial hat back on, if you ever took it off that is. Whether it’s evolving to a subscription model, becoming a lean-machine that lets you work from anywhere in the world or developing a new tech platform that allows you to scale faster, there’s going to be ample opportunities for those that are willing to seek them out.
As a final word; look after your family & your mates. Shoot them a message. We’re all going to have our moments during this period of isolation so look after each other and get through to the other side.