Last year was unexpected for everyone in business, large or small. If anyone says they were expecting a worldwide pandemic, stay-at-home orders for weeks that turned into months, mandated business closures, a 30% drop in the stock market, a complete rebound of all major indices to record highs in the market, another oil and gas crash, and trillions of dollars of federal aid to the U.S., they are lying.
We were caught off guard.
Even if some of you pivoted quickly and salvaged your year.
Even if some of you benefited from the federal aid to small businesses.
Even if you reacted quickly and shut down before you lost a lot of money.
You were caught off guard.
We all were.
Although 2021 is a new year, it is still fraught with unknown factors that can affect our customers, our communities, and our businesses.
Will the vaccine be distributed quickly?
Will the rise in cases cause another shut down?
Will the new strain in the virus resist the vaccine?
Will the new political administration help more or less? In the short-run? In the long-run?
How will the stock market respond to the new political administration?
How will the economy respond to the new federal aid?
We all celebrated 2020 being over, but what can we expect in 2021?
Fortunately, there are things within our control that we can do, in and for our business, that will help us mitigate the volatility in our own business. And they are good for business in good times, as well as a repeat of 2020.
Start Aggressively (and consistently) Selling.
Many people were so taken aback by the stay-at-home orders and business closure mandates that they just froze. I know that most people expected a two-week blip and then things would return back to normal. They kept waiting as two weeks turned in to three, four ….ten, twelve for some. Then many of our customers decided to continue working from home to keep their employees healthy and safe. Or, at a minimum, they weren’t letting you in for sales calls.
As January marches on, we must focus on regaining our sales momentum. It may look different today, but don’t keep waiting for the vaccine to get distributed to start consistently selling. Don’t assume it will all be over soon; we just need to wait it out. Get creative and start planning and start selling.
- Call and ask for appointments. (the blocking and tackling basics)
- Ask current customers for referrals.
- Switch to video meetings.
- Send samples.
- Move to online sales.
- Use digital marketing if you can’t get in to use traditional outside sales.
- Offer creative solutions i.e. takeout, curbside service, contact-free delivery, etc. Others have already paved the way.
Even if you are not getting the response you hoped for, your name will still be out in front of people, you are planting seeds, and your customer-centric service is highlighted. The worst-case scenario is that you will still be top of mind when things open up. Plus, you will be in the habit of consistent selling which will gain traction and build momentum at some point.
The alternative, to wait, could close you permanently or have your company lag behind when things do open up more widely.
Focus on Cash and Cash Flow.
Cash is king is a cliché for a reason. Adequate cash reserves and/or strong cash flow are the best protection against economic calamity. Obviously, continued sales as discussed above helps cash flow. A few other suggestions to consider:
- Collect your money. Be very clear in your credit terms. For those purchasing on credit, make sure that they have received your invoices, and that they are paying on time. If you continue selling, but don’t collect your payment, you have incurred the expense without any revenue. This is worse than not selling at all. Suggestion: Review your credit terms and make any changes that will ensure timely payment of your invoices.
- Keep available credit options open for yourself. If you have a line of credit, keep it open. If you don’t, apply for one. Even if you don’t use it, having it available provides options and better decision-making.
- Apply for a new PPP loan if you are eligible. We hope things keep getting better, but we don’t have a crystal ball. You can always re-pay it if you don’t need it. Apply and get it as a safety net in case. Again, when we have resources, we make better decisions in our business.
- Manage expenses prudently. For small business owners, this may include personal expenses. Many times, we have a personal spending problem, not a business one. This inevitably results in us pulling more and more money out of our business. Be mindful of spending on “nice to haves” because you may need your funds for “have to haves” later.
Invest in Your Team.
This can take many forms.
- If your business is really slow, spend your personal time mentoring and training your team for the next level in their area of expertise.
- Have your team work on internal projects to improve the processes, systems, products, and services.
- If you have to pivot your business in some way, allow your team to train up for the new direction so they can keep their jobs.
- Invest in new team members that may help in continuing momentum or that may have the expertise to help you pivot.
- Use the PPP funds you may receive to keep your team intact. They will be more loyal to the business if the business is loyal to them.
- Provide time during work hours, if things are slow, for them to work on developing a new skill or increasing their knowledge in their area of expertise.
Regardless of a good economy or a bad economy, regardless of your business’ sales growing or slowing, in all scenarios, if our business is a going concern, we have to:
Manage our cash resources.
And take care of our team.
If you feel like you and your business have been in limbo, or worse, fighting an uphill battle, if you are to remain in business, these are still the priorities.
If you made it through 2020, and with the federal aid you faired pretty well, don’t take it for granted and assume 2021 will be more of the same.
Do the things that help ensure a healthy business.