Leading Your Business Through Challenging Times

This has certainly been an eventful week. 

For those of us who operate in the CPG Natural Food / Health & Beauty space, we saw our largest trade event postpone at the very last minute, to be rescheduled at a future unknown date. That was followed up with a postponement of Shoptalk until September with Groceryshop moving to 2021. These event changes impact the retail shopping channels, their supplier partners, and for many of us, results in delays around new product launches.

It doesn’t end there. I live in Chicago and the events held at McCormick Place and other meeting venues are essential to bringing revenue to the city. Within the last few days, we saw the Housewares Show cancel, an Oracle event cancel, and just today Ace Hardware cancelled their upcoming event. In total, these cancellations result in 80,000 less people coming to our city. 80,000 less people spending money in restaurants, taking taxis and shared rides, tipping hotel staff, not to mention the loss in revenue by the hotels.

What’s happening in Chicago is occurring around the country as well as the world. We are seeing conferences cancel on a daily basis, resulting in a significant reduction in air travel, and in harkening back to the days of President Ronald Reagan, this is true trickle-down economics, only that the trickle down impact that we are experiencing is one that is negative as opposed to positive. This is all taking place while we experience the roller-coaster ride of the global securities markets.

So, what do we do?

My late father, who was not a management guru by any means, yet taught me more than I’d like to admit, would tell us to “Buck Up”. In essence, as a child who lived during the Depression and was forced to sell Liberty magazines on the street corner to bring money home so my grandparents could afford to eat, my father, if he were alive today, would remind us that times can be tough, so deal with it. He was old school, and he encouraged individuals to pull themselves up with their own bootstraps, don’t wallow in pity, instead understand the current situation, and adapt. He didn’t need to read books to know what to do, he simply did it.

Here is the reality; business can be difficult. It has its ups and downs. Shows get cancelled, appointments with buyers get postponed, new retailer shelf resets are delayed, and sometimes, as we are seeing today, life throws us a previously unknown and unseen curveball such as COVID-19. Seemingly no one knows what to do. It is times like this when true leadership is needed. You can desire that it come from our politicians, or our Boards, maybe our investors, but the fact is, the leadership challenge falls on us, on you. It is our job to plan, and plan fast. Don’t simply react to the challenges, have a plan. Thus, I implore you that if you have not created a plan, it is imperative that you do so as quickly as possible. 

Here are some questions you might want to ask yourself:

1.     If my business declines by 10%, do I have enough cash to continue? What about 20%?

2.     How long can my business sustain a 20% decline?

3.     Should a 20% decline in revenue occur, am I overstaffed? Can I still afford the payroll and the overhead?

4.     If I have to reduce staff, do I know who I will let go, and in what order?

5.     When will I need to start reducing my payroll commitment?

6.     How is my supply chain? Can I source ingredients, packaging, corrugate, etc. all from local suppliers? Are they having supply issues? Are my lead times extended and can I last?

7.     If I have current loans from my bank, have I proactively contacted my banker to inform them as to the state of my business, and my go-forward plan?

8.     If I am in the middle of fund-raising, how are my investors feeling and do they feel they are still comfortable in investing? If not, or if my fund-raising is now put on hold, how long can I continue to run my business? (see #4, #5, #6)

9.     Where can I find additional revenue to replace the 20% decline?

10.  Once I have my plan in place, do I know how I am going to communicate this plan with all of the necessary and interested stakeholders?

Here is the good news. As a society, we all have to continue to eat, continue to drink, continue to shower; in short, we are all continuing our daily lives. Our habits may change, our discretionary spending may change, but we are not crawling into caves waiting for the plague to pass.

The companies that prepare will survive. The business owners and managers who plan will prosper. The leaders who lead will not only survive, but they will come out of this experience as much stronger leaders.

These are tough times. But don’t kid yourself when people say it is unprecedented. In the past, we have made it through recessions, we have made it through depressions, and we made it through the Spanish Flu of 1918 when an estimated 17-50 million people died around the world. When you think of these tough times that those who came before us experienced, this current business and social environment certainly seems manageable.

In closing, I offer these three simple recommendations:

1. Get your plan in place immediately.
2. Work Your Plan
3. Lead with confidence.

Or in simple terms as my Dad would say, “Buck Up!” 

#leadership #strategy #planning