5 Key Business Actions to Take Now!
Updated: Apr 28, 2020
Learn what steps you can take now for your small business during the COVID-19 crisis.
"These are tough times for our businesses. We’re being tested in ways we are not accustomed to. Our goal is to weather this COVID-19 storm so we can get back to business as soon as the storm passes."
When a butterfly flaps its wings in China, who would expect it to create an economic hurricane around the world?
It probably started as an insignificant incident at an open-air market in central China.
A tiny microbe passing…
Infecting some unknown soul…
No one noticed...for days...perhaps weeks.
Three months later, an economic storm, the equivalent of a Category 5 hurricane, is ravaging the world’s economy, touching every member of the human race in some way.
The COVID-19 pandemic is a financial crisis that is affecting literally every business on the planet. If you are a business owner, these are uncertain, fateful times. This is not a time for panic. Rather, its a time to be proactive, clear-headed and communicative.
There’s a lot that we don’t know right now. Even so, we must act in order to safeguard our businesses and support the customers we serve.
I run a technology commercialization consulting and training business, with clients all over the world. These clients are small business owners and entrepreneurs. Every one of their businesses are under stress, just like mine. And yours.
Here are five things that I am doing right now to protect my business, and serve my clients.
#1. Talk to Your Key Customers
Communicate with your customers in an authentic, helpful way. You want to let them know that you are thinking about them and are concerned for their businesses, too. Everyone is going through this. Let’s do it together.
We’ve all seen a few tone-deaf businesses out there that are using this opportunity to market to their customers. Over the last few weeks, I’ve received several salesy emails from companies that I have relationships with. It always comes off as crass and self-serving. Be careful with that. Don’t be that person. Seek to help, not to sell during this time. Sales will come later.
Share useful information with them to let them know how your operations have changed, how to reach you in the crisis, and what you can do for them. Encourage them to reach out to you as well. However, ensure that you have the ability to respond when they do call. This is not the time to allow a genuine customer outreach to morph into a customer service fail!
For your most important customers, reach out person-to-person via email; or preferably a phone call. You need to understand how the COVID-19 crisis is affecting their business. Are their offices and facilities operating? Are they going to accept your shipment that they’ve ordered? Are they going to be able to pay your invoices on time, etc.?
This conversation may be a bit tricky and should be handled with care. It's best handled by a senior member of your team. You may need to offer some flexibility to help your customer through the crisis. You will have to decide on a case by case basis what’s appropriate.
The key thing here is to have a conversation for concern and understanding. Share your concern and understand how the crisis affects your human and commercial relationship with your key customers. You need to know this critical information to guide the hard decisions you have to make for your business.
Do this right away!
#2. Talk to Your Critical Suppliers
Next, reach out to your critical suppliers. There are two important reasons to do this.
First, you need to understand how their operations are being affected, and how that will impact your business. Are they still shipping their products, and are they shipping on time? How will this affect your business?
Second, and this is really important, you need to understand what they are able to do for you. Are they offering any flexibility in their usual terms? Are there any concessions or temporary offers. To take it a step further, are they willing to negotiate with you regarding payments that could allow you to manage you cash better?
Don’t be afraid to ask about concessions. Your customers may need some flex from you. Your suppliers are probably seeking some relief from their own suppliers. If you don’t ask the question, the answer is certain to be NO! So, for the sake of your business, ask your suppliers about concessions. Or, at least some flexibility in payment terms.
#3. Check Your Cash
Cash is the lifeblood of your business. When you run out of cash, you are out of business!
At this point, you should have spoken to your key customers to understand their ability to receive the orders you are shipping, as well as their ability to pay your invoices. You’ve also spoken to your suppliers to understand what kinds of flexibility they are offering regarding your payments to them. With this information, you can create your own crisis cash management plan.
First, determine how much cash you have available to meet the ongoing needs of the business. This will include your bank accounts and any lines of credit you currently have open. It could also include new sources such as new loans or any government stimulus payments you may be able to collect.
Second, honestly evaluate your accounts receivables to determine who will pay you, when they’ll likely pay and how much of the invoiced amount they’ll pay. Again, this information should have come from your earlier discussions with your key customers.
Third, review your payables to determine which bills you will be able to pay, and when they are due. Were you able to gain any flexibility or concessions from your suppliers? Here is where that knowledge is added to your cash plan. Aren’t you glad you asked?
Now you can bring all three pieces of the puzzle together. You now know how much cash you currently have available to fund operations. You have a reasonable estimate of which customers will pay how much and when. You know the bills you have to pay, and what flex, if any, your suppliers will be able to provide to you.
With this knowledge, you are now going to have to prioritize which bills you will pay, and when. To do this, think survival mode. Prioritize these bills based on which suppliers are most vital to your business’s survival until conditions improve. You want to pay as little as you can, as late as you can. This will differ for every business. And, your plan may change over the next few weeks as local and global conditions change. So, keep you plan flexible and open to frequent reviews.
This should help you to understand your month-to-month cash burn rate, and ultimately your business’s cash runway. You run out of runway when you run out of cash. That means ‘Lights Out! None of us want to go there!
Once you determine your cash runway, other decisions about seeking extra capital or decreasing expenses will be more clear.
The bottom line here: communicate...be decisive...don’t run out of cash!
#4. Safeguard Your Employees
Your employees are your most important asset, right? This pandemic is especially hard for them as they have to deal with its effects on their jobs and within their families. Here is a quick list of actions to safeguard your team:
First, make your company facilities virus-safe. Follow local guidelines for physical separation, sanitation and similar precautions. Conspicuously post hygiene guidance everywhere. Lead by example with the precautions.
Second, implement work-from-home policies as much and and as quickly as possible. This provides your team with added protection, as well as helps you ensure continuity of operations if your local government requires you to shelter-in-place. Do this now!
Third, monitor your essential on-site employees for illness. Implement regular checks and briefings to ensure that any employee with symptoms is identified quickly. If an essential employee is found to have symptoms, send them home immediately and take appropriate actions.
Note: If you have work-on-site employees, its a good idea to check with your local public health department before an incident occurs to ensure that you will be prepared to handle it properly.
#5. Support Your Community
The COVID-19 pandemic is hitting our communities hard. And because we are all going through this together, our companies should work together with local agencies and organizations to fight the pandemic and lessen its impact on those around us.
For starters, companies should be good citizens by following local guidance on protective measures. Take care of your team, and your customers by every means possible.
Next, look for problems within your community that your company can solve,...then solve them. This could mean supporting a local food bank or other worthy charity. This will look different in every community. The opportunities to help should be easy to find.
Finally, wherever its safely possible to do so, invite your employees to engage with your efforts. This builds teamwork, and allows people to give back to the community.
When this crisis is over, people will remember who stood with them in their moment of need.
These are tough times for our businesses. We’re being tested in ways we are not accustomed to. Our goal is to weather this COVID-19 storm so we can get back to business as soon as the storm passes. We’ll do that by being resilient, proactive, decisive and communicative.
This, too shall pass!
I hope you find these suggestions helpful. I wish you well.
Be strong...be smart...be safe.
I write for small business owners and startup entrepreneurs who are trying to change the world with their new products and services. But before anyone can change the world, they have to get someone to buy their product. My personal mission is to help innovators win. I do that by helping them succeed in getting to market. How can we work together?