We are currently going through some very difficult times – no doubt. Business is challenging at best. I have read professional economists’ forecasts that business will not even start to return to “normal” until the end of June or July, some predict well later. At the very least, that is 3-4 months from now. The good news is that the overwhelming opinion (quite nearly unanimous) is that when the economy comes back, it will do so with a vengeance.
During this COVID-19 crisis, I have not only been addressing my clients’ pressing and immediate business challenges, I have also been spending considerable time counseling my clients as to how they can be proactive and use this economic slowdown to prepare their businesses for the explosive growth to come.
Below are 7 categories of the most common proactive strategic planning considerations recently discussed with my clients.
I. Cement Client/Customer Relations. Your clients are going through similar challenges as you. They will remember the companies that supported them during this time – you should be one of them. This protects your current base of business in two ways: (a) It may help them survive to continue to be a client; and (b) the better clients will be grateful now, and loyal after the downturn passes. Some strategies I have counseled include: (i) proactively (before they ask) offering your clients with outstanding accounts receivable discounts for quick payment (it helps the client and your business – during these times, cash is king more than ever); (ii) offering EXISTING clients extended terms on their ongoing – regular orders; (iii) offer clients deferred or reduced fixed monthly payment for a period of time (basically a new payment plan – with short term relief); and (iv) continuous contact with clients with business relevant updates, order/service status letters, operational status letters, and most importantly, with no business agenda, just to see how they are doing.
II. Protect Important Assets – Like Your Labor. Most businesses think of employees as an expense and not an asset. But, what happens to your business if you do not have the labor to support it? What happens when your employees feel you have treated them poorly during this downturn? I will tell you from much client experience, when the economy comes back, they will leave your company in need at a time when every business is competing for the best employees. However, it takes very little to protect this asset. If you are still operating as one of the 16 critical sector companies, protect your employees with enhanced COVID safety policies and practices. If you have had to furlough © 2020 Lee R. Goldberg. All Rights Reserved. 2
and/or layoff employees, at the very least help them with access to support services, and keep constant contact with them during the downtime. Your HR should be their one-source “go-to” for referral assistance. Maybe even help in some tangible manner (financially or otherwise). When this passes, you will be glad you did. Your HR professionals can be a great help in this endeavor, with resources, policies and practices to help maintain your very important labor asset.
III. Re-Evaluate; Reorganize. Perhaps your business had been good, but no business is perfect. Address the challenges in your operations during this downturn. Maybe you have a challenge in accounting, production, sales, or other department – fix it during this time. It’s also time to evaluate and possibly restructure your debt, or qualify new vendors. You should also evaluate and employ new methods to reduce operating costs; After all, “a penny saved is a penny earned”. (If you don’t understand that expression as it relates to business, I almost guaranty your operating costs are too high.) In addition, specifically identify the matters that you need to change, but cannot adjust today, putting a detailed plan in place of how to address the issue when the time is right (and identify that time). You may even need to entirely restructure your operations for future strategic plans, or changes in the law (e.g., California’s new 1099 contractor laws). Now is the time to get those business structures and/or modified operations in place, or at least moved forward.
IV. Marketing Plans. Let’s be clear – I am not talking about marketing during the downturn. In general, people are tired and annoyed with hearing all the great offers they can get, but only so long as we are in quarantine. However, this is the perfect time to re-assess and identify your target market and develop and prepare marketing plans that can immediately be placed into effect when the current business challenges are eased. Traditional marketing consultants, web-marketing professionals, advertising consultants and related services have availability now. Businesses that do this will realize two very important advantages over competitors that do not: (i) They will be ready and visible in the market the instant that the time is right (before unprepared competitors); and (ii) They will not be scrambling to get the attention of the best marketing professionals and consultants when all other businesses are doing so at the same time.
V. Invest in Your Business. Notwithstanding the current downturn, there is plenty of business capital available out there right now, including possibly held in your own “retained earnings”. Moreover, everyone is talking about the SBA Emergency Relief Loans (which if you qualify – there is no better current business debt/grant structure out there of which I know), but that is only one source of available debt capital. Both institutional and private lenders are lending. So, maybe you have capital improvements that have been deferred too long. Perhaps you need to acquire equipment or software to increase efficiencies and reduce operating/labor costs. Maybe your business facilities need to grow or even relocate (including potential real estate acquisitions). Maybe, your employees can use better training. All of these things can and should be addressed, assessed and planned at this time, as well as proceeding with the steps to put these capital investments in place.