March 16th, 2020
Corona Virus, the Economy and Your Business
Last Thursday was quite a day … eh? The world seems to be shutting down.
Actually, the world is shutting down. Schools, businesses, gatherings—I’ve never really seen anything like this in my lifetime. I could draw some similarities (from a business point of view) to the events of 9/11, but frankly, I don’t want to assign that kind of “weight” to COVID-19, the novel strain of an ordinary coronavirus.
The reason I’m writing to all of you is just to give you some outside perspective from a business point of view. Plenty of people will weigh in from a personal or medical point of view, but that is certainly not my place.
When it comes to the uncertainties facing our businesses, I hope that some of these points might help you.
- This too Will Pass
I remember 9/11 like it was yesterday. I don’t know what it says about me, but the reason it sticks in my mind so vividly, is because of the business situation that I (and my partners at the time) were in.
I don’t want to seem unfeeling. The magnitude of loss on that day doesn’t escape me. But the reason the feelings are still so visceral for me is because of the business pressure I remember.
At the time, our company was a startup manufacturer. We were about five months into production. We had a 57,000-sq.-ft. building leased. We had delivery trucks. We had automated machinery. And we had about 35 people already depending on the company.
We also had a $2 million line of credit and it was down to about $400,000 in availability. And, last but not least, we had bills.
So, when I think of that day, as selfish as it seems, I think of looking at my partners and thinking, “Oh shit … business is about to stop.” And you know what? It did.
Business came to a grinding halt. At the time, orders were still being placed via fax machine to an extent (if you can believe that). I remember staring at that fax machine, as it sat silent.
There are essential human needs that must be met, no matter what’s happening in the world. I was not in that kind of business. We are not in that type of business. So, when people stop consuming (let alone leaving the house), our business slows, or stops.
But here’s the thing I also remember: Business didn’t stop for nearly as long as I thought it might.
A few weeks after the shock of the events had worn off, orders started to trickle in.
As quickly as the marketplace can react in a panic, it will race back to normalcy.
People don’t want to spend extended periods of time “frozen.” They want their normal lives back. They want to see the optimism of a new day. They want to act, and spend, like they did before.
This is not going to last forever. Consumers are worried right now, and they’re not thinking about their appointment with your sales consultant. But this, too, will pass. And quicker than you think. Remember that.
- Focus on the Right Things
Right now, you might be laser focused on things like the cancellations of events, appointments and installs, and rightly so. But there’s only so much that you can actually control, and your focus is the most valuable asset you can protect.
Instead of focusing on how your business activity might be slowing way (way) down, shift that focus to things that are going to ultimately empower you and your team to a better state.
Focus on this: The word “pandemic” doesn’t mean that COVID-19 is going to kill everyone and send us into Armageddon. Pandemic is related to geography. The term doesn’t speak, necessarily, to a level of danger. So perhaps what I should say is: Avoid a focus on this negative buzzword (pandemic) and get your team’s focus off of it, too.
Focus on this: What can you do to preserve your customer experience? It is time for you to communicate with your staff, your installers, your prospects and your customers. Ask them their preferences, when it comes to meetings, appointments, installations, etc., and balance them with your own. Ensure they know that you’re taking their wishes into account, that you’re taking the precautions recommended by health authorities, but that you’re not taking the focus off of how your business can serve their needs. Let them know that as everyone adjusts to this unique situation, that your focus will remain on making them happy, when the time is right.
Focus on this: What can you be doing now, in the face of a temporary downturn, to make your business better in the future? Instead of focusing on a temporary loss of business, here are some things you can be laser-focused on, that will turn this into a positive: training, planning, systems development, your business plan, training and training. You can also use this slower time for (you guessed it) training.
- Look to the (Near) Future with Excitement
Remember this: Swine Flu didn’t “break” the economy. The world is taking great precaution to avoid the spread of this virus and that’s great. But those precautions, and the virus itself, do not themselves change the fundamental strengths of the economy.
The stock market is crashing downward, that’s true. But just as influenza cannot inherently weaken the balance sheet of Apple, this virus will not permanently erase consumer confidence.
This situation is temporary. It is a freeze-frame, or a glitch. The stock market is speculative and is sometimes hyper-sensitive to consumer fears. But the market will recover, just like it has in the past. And by recognizing that pattern, you can look to the near future with excitement.
Your leads may be drying up right now, but history has shown us that the demand for your products isn’t being erased; it’s just being put on hold. This situation is constraining demand, not eliminating it. And it will build up.
And when people’s fears subside, that demand is going to punch you in the face like a gentle right cross from Iron Mike Tyson.
- Understand and Embrace This as a Lesson and Become Better
For some of you, a “glitch,” or temporary suspension in business activity is a big deal. It’s a big deal, because you may not be in a financial position to withstand too much inactivity. This might even be the proverbial elephant in your room at the moment.
And while I can certainly understand the importance and urgency of a situation like that, let’s face it, there may be nothing you can do about now (immediately), other than just to grind it out and find a way.
But what you can do is understand why this is happening to you. Then you must decide whether to allow the situation to repeat itself in the future, or to embrace this lesson being thrust upon you, while learning from it.
We often speak of sustainability, or adequate gross margins, and of “overhead expense.” The fact is, part of running a profitable business includes preparing for glitches, or hiccups, or downturns, or even emergencies.
If you find yourself struggling with cashflow over the next few weeks, as business activity slows, there’s one place to look, and that’s in the mirror. Use this difficulty as a lesson. Make a decision that you will run your business with the proper financial discipline, in order that you may withstand a situation like this in the future.
Do what you must do to get through this temporary setback and make the decision that you will never feel like this again.
I’m sure there are other lessons to be had from this unique situation, other than just financial. But I’m also sure that I’d have the same advice: Do what you must do to get through this temporary setback and make the decision that you will never feel like this again.
Let’s keep our heads up, folks, because this, too, will pass. And let’s wait for that gentle right cross from Iron Mike, because it’s coming. But let’s prepare along the way to emerge a stronger, more well-run, and more profitable enterprise.
Stay safe, stay positive, and stay focused on the right things.