By Michael Iverson
We are in an unprecedented time – one that is impacting most businesses in the United States and the world. And there’s no telling what the fallout will look like or even how long social distancing and company shutdowns will continue.
As a numbers coach for my business clients, many of them are asking for advice and guidance during this volatile and unpredictable time. I assure them that as a business owner or leader, a number of financial factors remain under their control. Here’s what I’m emphasizing:
Lead where you can: Communicate and Be Flexible
Change and uncertainty are all around us right now: How long shutdowns and isolating will last, the long-term macro- and micro-economic impact of this crisis on businesses, families, and communities around the world, or whether people will regret buying a year’s worth of toilet paper are unknown. We have little to no control over most of this.
What you can control is how you react.
No one knows exactly what to do – and that’s OK. Your strategic decisions can keep your company afloat through this crisis.
Communication: Transparent and honest communication isn’t a new concept, but it is more important now than ever. Explain to employees, customers, and other stakeholders that, like everyone else, your business is experiencing the ramifications of the coronavirus. Explain your challenges and your high-level strategy to overcome them. Everyone is more likely to empathize if you communicate honestly and authentically. The health and safety of your employees is the most important priority.
Keep the communication flowing – ask where they’re struggling the most, and where you can help. Offer a free brainstorming session. Remember – your goal is to maintain the relationship so it can grow after this crisis passes.
Flexibility: As you’re asking for flexibility from your clients and employees, consider offering some in return. I always encourage my clients to have a 3- to 6-month cash reserve. Times like these are why you held that money. Offer customers a modified payment plan or if you can relax payment terms for products or services like ongoing license support or maintenance.
For employees, be flexible with time, productivity and deliverable expectations. People’s daily lives have been upended, from homeschooling and supervising children to caring for sick family members. And for the most part, they want to do their best for you while figuring out their situation. Consider staggered or flexible work schedules. Relax deliverable dates where possible.
If you have employees with a lighter workload during this time, give them the opportunity to shine when others are overwhelmed. Maybe ask for a volunteer to provide updated COVID-19 information both medical and financial. Dedicate someone to helping employees take advantage of cost- and time-saving benefits such as telemedicine, wellness programs, and EAP offerings.
But also remember as crucial as communication is, too much information, repeating the same message with minor tweaks, or asking employees to be constantly online or send hourly updates are all examples of actions that could provoke burnout and deeper anxiety. Remember, we’re all getting corona-related messages from companies we haven’t heard from in years. We’re all figuring out this out together. Don’t unnecessarily add to the cacophony.
Pivoting to new operational models
With office and business closures, we’ve shifted to working almost entirely online. Engage customers and prospects virtually through platforms like WeChat, Zoom, Skype. For those with whom you haven’t engaged with this way, the novelty may actually open doors. Use email lists and social media analytics to reach new leads. Try apps like Trello or Monday or dig out that intranet project you’ve been putting off, to organize and detail projects so everyone is working together.
Prioritize initiatives that require less capital, less risk, and have a proven positive impact on cash flow. It is possible to continue to operate debt free and maintain access to capital. For more cash preservation guidance, check out the “Preserving Cash in Uncertain Times” article I published last week.
If your company’s situation is looking dire and you’re considering layoffs, consider looking into a four- or even three-day work week to reduce costs. If employees are sitting on the bench due to loss of client work or decrease in demand, ask if they could use their PTO now or agree to work half time or take unpaid leave. Look into emerging government programs to cover salaries. The Cares Act is landmark legislation passed on March that has several key programs:
- Paycheck Protection Program Loan with a forgiveness provision
- Economic Injury Disaster Loan program as part of the Small Business Administration
- Employer 6.2% payroll tax deferral program
- The Unemployment supplemental insurance program
The following link provides more detail on the programs and what is offered: COVID-Bill-3-Summary
If you need to consider across-the-board pay cuts, keep them in direct relation to job positions. Start first with voluntary cuts. Some employees are looking for ways to help others who can’t afford a pay cut. For example, the CEO should lead by example and take the largest pay cut, the highest paid employees take the next highest cut, and so on down the line.
Finally, if you haven’t already, postpone all travel and make every effort to allow employees to work from home.
Negotiate with vendors, who are undoubtedly making changes of their own. Look for extraneous expenses to eliminate, and lower cost alternatives to conventional advertising. Look into whether your insurance coverage can help. Leave no stone unturned when looking at ways to conserve cash.
Learn, grow, breathe. We’ll get through this!
It may be the last thing you want to think about, but now is the time to take note of practices that will prevent repeating mistakes in the future.
Take notes. If you didn’t have a solid disaster recovery plan ready this time, prepare one for the future using knowledge you acquired during the COVID-19 pandemic.
And no matter how brilliant and detailed your plan is, expect things to continue to go awry. When this happens, stop, take a few deep breaths, remember your training, focus on the end goal, and make the most rational decisions possible.
If you’re looking for more guidance, I’m happy to talk. Give me a call at (404) 353-2148 or email me. I’m here to help.
With hope, gratitude, and cooperation, it won’t be long before we turn our TVs, smart phones, and laptops on and see nary a mention of pandemics. Until then, stay safe and be well!