This is the final blog after our 3 Steps in Dealing with a Financial Pandemic and Phase 2 Steps in Dealing with a Financial Pandemic blogs.
Step 1: Discover your “new normal”
- You and your business have experienced a major life impact event which requires a change in thinking and practices. Reach out to your customers and find out what has changed for them. Are they still in business and, if so, do they have the same needs? Will they still buy the same quantities?
- Find out what your competitors have done: who is still in business, who is weakened and who is stronger?
- Is your marketing strategy still viable? Likely customer buying habits will not instantly snap back to old ways. Web based purchasing will be greatly expanded as customers got used to it while being sequestered.
- Which of your employees will come back once you ask them? Do you have the talent pool to deliver services or build products? Some may now be working for Amazon.
- Find out how key suppliers are doing, how willing are they, or can they supply you in a slow restart. Find out if your banker is still able to support you, or if you have been successful in receiving a PPP or EIDL loan, how does that change your banking relationship?
- Evaluate operational changes made to operate under these extraordinary circumstances and determine if they make sense going forward to “normal” operations; do not assume the way it was is the best way going forward.
- After doing your homework, assemble an operating plan for a restart over 90 days. Operational efficiency, customer care, and cash conservation plans are vital to move forward. Hope will not conquer these issues.
- Forecast three scenarios: best case, likely case, and worst case for 90 day and six-month outlooks. Identify trigger events that will cause you to change plans. This focuses on what will work to regain your business health.
Step 2: Getting back to work
- From Step 1, look at your sales forecast and look for orders more than 90 days out. Focus on offering incentives for customers to move up the order delivery. Time degrades all deals.
- Focus on doing the most you can with less people, less inventory, and less cash. Operating efficiency is critical to extending your cash and timeline to recovery. Conserve cash.
- Communicate your COVID-19 restart plan to your landlord, banker, key customers, key suppliers, and employees. This makes others view you as a more important customer, supplier, and employer.
Step 3: Scale up process
- Work with your key suppliers on your growth plan and purchasing timeline. If growth is not an option, plan steps to extend your survival. You may need to tread water until the tide turns your way.
- Set up a scale up plan to bring back staff based on sales growth. If you depleted your delivery capabilities, outline steps to recover those capabilities. Get it in writing to clarify your thinking.
- Look for niches in your market where you can offer special deals to expand short term sales and create more brand awareness.
- Look for new sales channels where you can expand geographically or expand product lines.
- Companies that will prosper have a positive plan and know their options.
C Squared Solutions provides fractional CFOs and COOs for businesses in nearly all industries. We offer four hours free consultation to help you with the analysis and planning of these steps. Give us a call and let us discuss your concerns.