In this final installment of a three-part series, we dive a little deeper into the “Ride it Out” phase. If you missed the first two, first check out Three Phases for Today’s Small Business, then read through Disrupt the Disruption to get the full picture. In the Ride it Out phase, we’re attempting to do business after having made quick, short term decisions required by many laws, acts, mandates, pandemic safety and health updates. As we move forward with the decisions we’ve made thus far, our eyes are scanning the horizon for what’s next. The rear view mirror is probably not going to help us as much as staring out the windshield because the next challenge is determining how deep your fishhook will become.
Most companies cruise along for years with business as usual, maintaining a certain level of financial success, brand awareness and effective business management practices. Most will also bump up against unforeseen hurdles that can spiral them down into lost revenue and profitability and increased issues. This is typical within the average business cycle especially if one is intent on growth. Call it a setback, a crisis, external threat or a change in how we conduct business. The business takes a dive into a fishhook. As entrepreneurs, we’re used to fishhooks and have experienced quite a few. It’s not the dip itself that challenges the risk takers. It’s the measures we take to dig out, betting that when we do, our growth will spike to a level even higher than what existed before the hook was set. The big question for leaders is two-fold: how deep is our hook and how do we dig ourselves out?
As we continue to ride out this pandemic, most of us are in the middle of the fishhook. What can we do today to make sure we aren’t digging ourselves deeper than necessary? As our nation recovers and businesses regain momentum, how can we quickly increase our trajectory up and out of that fishhook? We must get back to the basics. Remember the 3 R’s from grade school? Try these 3 R’s for business.
How are you spending your PPP money? The intention of this loan is to bring your workforce back to work in full. However, if your customer base is down, most managers wonder how to keep their employees busy. It would be easy to slip into old habits and simply expect employees to do what they’ve always done. Unfortunately, that could deepen your fishhook. Productivity as we knew it has changed. Now we must identify what work is productive. Do not place additional employees out into the field just because you can. Protect the productive efficiencies you’ve gained recently. If you realize two team members can get a job done efficiently and effectively, why would you add another body to the mix? Instead, direct additional employees to work on strengthening your internal systems. Task them to improve your properties, rearrange work stations to allow for physical distancing, update procedures, update your training processes, maintain equipment, re-work a production line, etc. Finally, now is the time to study your accountability chart and prepare it for 18 months from now so you can dig out faster and go further.
Resetting helps you be proactive about the future even if it is filled with unknowns. There are short term, proactive preparations that every organization can work through right now. How are you planning to bring your employees back now that shelter at home guidelines have ended? Are you bringing your workforce back all at once or slowly in a phased approach based on essential functions that are needed?
Now is the time to reset your projections and financial models so you can start to clarify the actions needed in order to dig out as work returns. Digging out from a slump does not happen when you are at the bottom of the hole. Digging out happens with the strategy you put in place well in advance of better times.
How deep the fishhook goes will determine your rebound efforts. To rebound quicker will require:
- A critical focus on building your sales funnel immediately versus waiting until times get better to get back to prospecting and marketing. Sales people should be collecting emails with an eye towards building and refining the database while marketing should be leveraging social media as much as possible. Without emails, climbing out will be slow and cumbersome.
- Consistent communication. This is critical. Fill the dip with constant, consistent touches for every one of your stakeholders. Many businesses have been proactive in their customer touches, but do not forget about your employees (laid off or not), vendors, referral partners and the community in which you do business. There are plenty of reasons to touch base and update. Leadership should be all over this.
- A shorter strategic plan. Think of it more like a “what-if” scenario. Have multiple plans ready and be prepared to shift to any one of them. For example …
- Plan A – identify workforce capacity adjusts. Occurs with a 20-30% reduction in revenue.
- Plan B – determine what sustainability looks like. Occurs at the break even point.
- Plan C – drastic times require drastic measures. Be bold and get out front of it. Occurs when below break even.
Digging out also means being prepared for potential relapses due to lingering Covid-19 effects for the next 18 -24 months. Create another contingency plan and be ready to rinse and repeat in case of a relapse, but this time with a better learning curve in place.
The fishhook has begun for many small businesses. Now is the time to not only ride it out but get planning in place for how to dig out. By following the 3 R’s (regroup, reset, and rebound), an organization can set the game plan to not only minimize the depth of the hole, but also dig out faster.