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Running a business is challenging, and as the world scrambles to make sense of and respond to COVID-19 and the subsequent economic crisis, entrepreneurs are being challenged in unimaginable ways.
As we all learn to navigate this new normal, business owners are called to react on what seems like a moment-to-moment basis. Fortunately, entrepreneurs are resourceful and resilient. Just like any other business challenge, now is the time to keep calm, stay agile, and strategize to work through it. Here are 5 things you can do right now to weather through this storm:
1) Look at your cash flow and get clear on your numbers
As an entrepreneur, cash flow is vital to the survival of your business. Understanding how cash flows in and out of your business allows you to plan and act strategically so you can manage and grow your business. One of the most important aspects of cash flow management is knowing your numbers. You must know where you stand and have a pulse on your business’ cash so that you can spot problems early and identify opportunities.
If you don’t currently have a system that allows you to track your financials, stop here. There are plenty of free tools available you can use to pull together your current revenue and expenses to gain clarity of your business’ cash flow (Here is a tool you can use to easily plug in your revenue and expenses to gain an understanding of how much money is flowing in and out of your business each month.
If you delegate this task to someone else in your company or 3rd party, remember that it’s important to stay up to date. Ask your accountant/financial advisor to generate reports and review your cash flow statement regularly and get clear on how much money is coming in and going out.
2) Start making critical decisions based on your numbers
Now is the time for action. You need to start making some decisions based on your current situation. When it comes to your business it’s easy to let your emotions take over, especially when you don’t have the data to back it up. Understanding the ins and out of your cash flow will allow you to be objective, not emotional when making these important decisions regarding your business.
Before you start making changes, you must first assign a cash threshold. That is the amount of money you need in the bank to make it through a predetermined amount of time (ex: 2 months). Identifying an amount of money you must have in the bank gives you an understanding of your risk tolerance.
Based on where your business stands at this moment and how close you are to meeting your cash threshold, you can begin to start making strategic decisions to close the gap in your cash flow or build a cushion for what is to come.
3) Keep marketing and keep your community engaged
As more businesses are forced to close their doors or make drastic changes to their delivery methods, now is not the time to go silent. Your customers and clients are relying on you to provide updates and stay in communication during these times. If you decide to pull back and make cuts to your business, you can not cut out your marketing or go dark on your community. Doing so could cost you in the long run. Instead, now is the time to decide how to market your business in a way that matches the needs of your target market.
Keeping up with marketing does not necessarily mean you should keep the same marketing tactics. You can, and should, pivot to meet the needs of your clients at this time. For starters, depending on your current level of risk you might decide to put all of your marketing budgets towards direct marketing channels, not branded channels.
Reassess your marketing budget and reallocate funds accordingly. If you need to pull from your marketing budget or ad spend, consider focusing heavily on your existing list. Offer incentives to clients or use a win-back campaign to re-engage with past customers.
4) Get creative and pivot where necessary
Right now we are all navigating uncharted territory and there is so much opportunity and unmet needs. Now might be the time to get creative with your services. How can you pivot and capitalize on new needs?
Here are a few of the creative approaches other companies have taken to reposition themselves to thrive in the current environment.
- Go Virtual – Under a Stay at Home order, the easiest way to connect with your customers is through the internet. Many gyms and fitness centers have begun doing live-streaming classes, while doctor’s appointments and therapy sessions are also moving online. If you don’t already use video conferencing, it’s the easiest way to get multiple people in one place while continuing to make money.
- Offer delivery – From restaurants to farmers’ markets, companies have begun shifting primarily to offering home delivery.
- Create a new Product – If there is anything we have learned from this crisis it’s that the world was not prepared. If there isn’t a great need for your product or service right now, there may be something else you can do to meet demands. Such examples include a 3D printer making valves for respirators or distilleries who have made a shift to start producing hand sanitizer. While these shifts may not be in line with your current business, they could open up an entirely new revenue stream you never thought was possible.
5) Stay productive and keep working on high impact items
If you’re like many people right now and you’re learning to navigate working from home. A key to staying productive at home is to keep your daily routine and schedules consistent and make sure you’re not just staying busy, but that you’re prioritizing important items.
To be successful you need to be focused on the right things done. Once a week, do a brain dump where you write down everything that needs to be done that week. Then, take a look at your tasks through the lens of achieving your goals —whatever that means for you in this moment—and rank those tasks by priority.
Once you evaluate your tasks, you’ll know exactly what you need to go do to hit your goals and where you should focus your energy during this time.
Remember to stay calm and agile during this time. This is an unprecedented time for everyone. But now is the time for action. If you’re feeling uncertain about what the future may hold for your business, you don’t have to go at it alone. Schedule a free two-hour session to dig into your business to uncover bottlenecks and opportunities and develop a plan to weather this storm.
Have any more questions on how to manage your business through the COVID-19 pandemic? Contact Cultivate Advisors or leave a comment down below.
This article was originally published in GREY Journal.