As a business owner in 2020, there are two words that would likely strike fear in your heart – and they are not “global pandemic.”
“How’s business?” has become the couplet most reviled by many CEOs – including those who traditionally answer that query with a smile, thumbs up, and hearty laugh.
The coronavirus has indeed transformed the outlook for many businesses, and in my previous blog we discussed the critical importance of execution, perspective, and empathy in withstanding the challenges that continue to lap at our doorstep.
And though it’s tempting to answer the “How’s Business?” question with vague platitudes, like “flat,” or “down,” or “we’re making it,” it will take a lot more specificity and understanding if you’re going to not just survive but thrive in the current season.
Gauging both the emotional and economic health of your business is an absolute, non-negotiable ingredient of your recovery recipe. Moving into a restoration of growth and health requires a commitment to preventing a company-wide energy suck out of your business, you, and your people. But it also mandates an accurate read of your business’s economic health – an analysis of trendlines and short- and long-term growth outcomes to determine whether your company is in a recession; emerging from a recession; moving into or experiencing robust growth; or suffering declining revenues.
Seems like a no-brainer, right? Well, not so fast.
I imagine many CEOs would consider their businesses are firmly in a recession phase, but it’s important to recognize that the external market doesn’t dictate the entire picture of your company’s economic position. Just ask PPE manufacturers of masks, hand sanitizer and latex gloves!
“I think a lot of business owners tend to look at the trajectory of their business relative to whatever they're hearing, reading, or seeing about the overall economy, which, as you know, often depends on your sector, and is not a good indicator of the health of your business,” said Heath Beam, Principal at Singular Private Wealth and a member of the Forbes Finance Council, and a friend with whom I consulted in writing this series.
So, how can a business owner block out the virus, maintain focus on the things they can control, and concentrate on the appropriate information that will guide the company forward? Here are some things that Heath and I agree are essential right now:
Make a commitment today that you will not simply throw ideas against the wall for adhesive quality testing. Conversely, don’t throw the baby out with the bathwater by jettisoning core business principals and strategies.
Astonishingly I’ve heard CEOs in the early stages of the pandemic state they were slashing marketing and advertising and holding accounts payable to conserve cashflow. That’s something I’d call a “random act of recovery” and it contributes literally nothing to the long-term, while potentially impacting your vision and ability to differentiate from the competition.
If you’re looking for the right place to invest energy, avoid the slash-and-burn and instead, fine-tune your microscope. The key to understanding and appealing to your prospects and customers in the market is to hyper focus on three items:
If you're focused on a strategy that hits these three things, and you haven't let the distractions cloud your focus, you have a pretty good swim lane for navigating through this wild environment.
A lot of people are ready to blaze their own path forward, in a bid to simply shake off the idea of a “new normal” and get back to what’s customary. But now is the time to build the team that will get you across the finish line. Heath and I are both observing an uptick in demand for professional services like ours because the current waters are simply uncharted.
“A lot of CEOs have a heightened sense of interest and a desire to engage [services professionals] because they're looking at what's going on around them -- socially, economically, etc., and saying to themselves, ‘you know, I've come a long way and I've been really successful and life's been really good, but I think I need some help,’” said Beam.
The temptation to try and “boil the ocean” when the chips are down can be intense. Add to that the biggest challenge to many business owners – under-capitalization or mis-capitalization – and you can truly feel painted into a corner, forced to make decisions out of the necessity of the moment.
We’ll explore these capital considerations in my third and final blog.