Businesses forced to close, customers mandated to stay home and consumer behavior changed forever – nobody was prepared for a worldwide pandemic and weeks, possibly even months, of quarantine. Although this time is tough and a recession is sure to happen, your business can make it. You can make it. Here is how you keep your business running and thriving during tough times.
Let's review expenses. I'm sure you knew this was coming. Review your dispensable expenses such as subscriptions, renewals, or unnecessary software. Are there places where you are spending money that you don't absolutely need for the operation of your business? This may not cut down much, but every bit will help. A recession can be very scary, especially for small business owners. But it can also be a time to show your true leadership abilities. I urge you to make cuts wisely and not out of panic. That being said, do you need to cut hours or pay from your team? Here are a couple things to consider:
- Can you furlough rather than layoff? We never know how long a recession may last but letting someone go the first week may be rash or even hurt your business in the long run. Furloughing is basically your way of saying, "I will bring you back as soon as I can." But there are pros and cons to both sides, so do your research, which is based on the size of your company.
- Can you cut the number of hours someone works rather than their pay? This can avoid hurting morale. Tough times are an important time to show strong leadership and keep your team morale high.
It may come down to cutting hours, pay or even lay-offs. But always consider that as a leader, which you elected yourself as, you are responsible for the livelihood of your employees. Be compassionate with your decisions and remember that when the tough times end, you'll need people in your company to build it back up.
Maintain Current Clients
During tough times your first thought may be "how do I bring in more money"? We automatically assume this means bringing in new customers. But sometimes your biggest opportunity is with your current clients. They're already signed on, they're already needing your service, they already see your value – but they are also going through the same tough times as you are. All of your clients are going to look for places to make cuts as well, you want to make sure you're not one of them. Can you enhance their service? Give them security and show them why your service is so valuable to them during this time.
Another idea for your current customers is to offer referral incentives for your services. By offering them additional service, discounted rates, or some other perk, they're likely to have a reason to refer their friends and colleagues. And bonus, a personal referral goes a long way!
Marketing is Crucial
We just talked about making cuts, but marketing shouldn't be one of them. In addition to maintaining your current customers, staying relevant is vital. Every other business is going through the same tough times as you are, so now it's important to set yourself apart. What can you offer that your competition's not offering? How can you be seen first?
Marketing doesn't have to be a huge expense, either. With today's platforms you can focus your energy on resources you already have rather than creating new expenses. Here are some examples of free marketing that you can take advantage of:
- Newsletter campaign – create email sequences that promote your services and explain your key differentiators.
- Social Media – in this unique time of quarantine, now is a great time to up your social media game. Everyone is on their phones!
- Get personal – sharing the BTS and you as the business owner is a huge part of building your brand and creating a strong connection with your audience.
Tough times are discouraging, it's hard to feel excited about your work when everyday is a financial battle of staying afloat. But now is the time to get creative, innovate and do what you've never done before. Review your practices, where can you make shifts that will better serve your customers during this time? A pandemic with mandated isolation is a perfect time to enhance your online presence and digital services right? Maybe TikTok is the answer–even Dr. Phil is on it now!
I saved the best for last. Your cash flow has the ability to make or break your business, whether we're in tough times or not! I cannot emphasize enough how important cash flow is. To keep your small business healthy and afloat, money needs to keep flowing. You will always have expenses regardless of how many cuts you make, but the important thing is to keep cash flowing in and manage those funds well. You'll hear every successful entrepreneur emphasize "keep money in the business" and this is exactly why. The better you manage your finances, the more secure your business is. The money that matters is the cash left over after operational expenses are paid. It's the cash you have available to use!
But The bottom line to good cash management is being aware. Knowing your numbers up, down and inside out. This can be overwhelming for so many business owners because, let's be real, most of us aren't accountants. But you don't have to be an accountant. I'm not an accountant. You don't even have to "like" math. But, you have to like being in business. Because if you like to be in business, then you'll do this- for yourself.
I've created a tool that is perfect for business owners like you. I know that accounting and quickbooks and bookkeeping and all the things can be way overwhelming. I get it. We're in over our heads- we aren't trained in that- CPAs go to school for it for a long time to get their specialization. But, you don't have to be trained in it for this….
I've worked with a CPA to develop a tool to help you manage your cash flow. It's called a cash flow projector and it's completely customizable to you and your business. You can input YOUR numbers- what you're getting in income, what your expenses are, and it will give you an accurate picture of what's going on in your business. How much to save for taxes, how much you can take out as salary, how close you are to your goal, how much is left in your business after your expenses are paid, what you're projected to make each month, each year,- it will give you all that data. But It will also give you peace of mind when you get clarity around your finances, which is priceless. And bonus, it's super easy to use and it's pretty.
Check it out here: https://cortneybaker.com/cash
Look, I get it, a worldwide pandemic and a recession is scary. My business is going through it too and in this case, everyone in the world is in this together. Don't be scared to reach out for guidance or even a chat! We're all in this together–and I'm here to support you!