Tips for SME businesses: how to survive in the Corona business environment

There is a lot of fear in the market right now, and nowhere is that more evident than in the small business community.

Social venues are closed, networking and events have all but ceased, and a stressed group of business owners who have just weathered an extended period of Brexit based market hesitation are now facing a very challenging business environment indeed.

BUT there IS hope!

Whilst many companies are simply battening down the hatches and hoping for a quick resolution of normal duties, lots are now seeking alternate operating approaches. This is a good thing, as it means that the survival instinct is kicking in and the true entrepreneurial business owners are rising to the challenge.

Saying it is a good thing is not taking away from the peril small businesses are in right now. It is simply recognising that a survival instinct has been initiated and is already underway. It would be much more concerning if we just saw apathy and despair.

The Government has just announced some fairly substantial support measures for all business owners, with some more significant measures for those most affected. We can always hope for more, but we must act with what we know about and not rely on handouts coming that we are not yet aware of. The time for action and response is now… and the fact that I see it happening now is a good thing.

Having said that, the response taken needs to be the right one. Most companies do not have vast reserves of cash, and cannot afford to get it wrong too many times or for too long.

Below are some key business considerations that will apply to most (not all businesses).

As every business is ultimately unique I am sure you will forgive a broad brush approach to this blog!

1. Remember that cash is king.

In business, the liquidity you possess is the ultimate evidence of your resilience. With this in mind, you need to be effectively chasing up debtors to expedite the rate of receiving cash into the business, and using systems that don’t tie up cash too heavily (i.e. don’t carry excess stock in the warehouse in most cases). Likewise, don’t pay your creditors early – pay to terms, and where possible look for preferential terms to preserve and improve your cash position.

2. Adapt!

We know that there are restrictions on how we can communicate, operate, deliver and manage. We don’t know exactly how long that will last, and it would be prudent to assume it will be an extended timeframe. Now is the time to work up a business model that will be functional for the long term. Set up new methods of meeting your clients, customers, suppliers and teams. Make use of technology. Adopt alternate forms of revenue making (e.g. take-away as an alternative to eat in, or video tours instead of visits in person)

3. Don’t cut your nose off to spite your face.

The tendency is to react in fear, and to just cut cut cut expenses anywhere and everywhere. If you listen purely to your accounts officer that might seem like a wise move…it isn’t. No business ever grew (in good or bad times) purely by cutting costs. It is those that are prudent with their cash, and focus its use on effective actions that survive and thrive.

“Trim the fat, but leave the muscle” ... else all you'll be left with is bones!

Over the course of many economic recessions for example it has been proven time and again that companies that cut the business driving elements of marketing too soon and too heavily also experience a much higher percentage of failure.

Now is a time to focus your marketing and sales messages, to better position your value offering, and to leverage the relationships you have with existing clients. Communicate, educate, reassure, re-align, and re-connect.

You need more, not less communication to retain the relationships and capitalise your opportunities. This probably means a change in tactics and messaging.

4. Establish credit lines early – even if you don’t think you need them yet.

Banks and lenders are still lending, and they do understand the need for forward planning and business resilience. What they don’t like is last minute crises. Approach them with a practical forecast, and a reasonable worst case scenario, together with a recovery plan based on a practical estimate for when the restrictions are removed (currently a pragmatic estimate might be between 3 and 6 months)

5. Motivate your team.

Right now lots of employees are worried.

They are concerned about the resilience of the company they work for, and they are concerned about what that might mean for their jobs, finances and families… and they aren’t just worried about their own situation; in many cases the same is true for their partners.

If you plan to fight through this economic crisis, you will need your teammates to be on their A-game.

Help them focus on the intention to win, and ask them to step up and be their best every day. Invite suggestions and recommendations, and encourage their participation in initiatives to boost and improve the business performance or the adoption of new approaches.

There isn’t room for slackers or those resistant to change, but there are rewards coming for those who help us win the battle.

6. Plan for the future.

When this crisis has passed, the market will recover. When it does, there will not be as many businesses around as there were at the start and most will be in a poorer situation. This represents opportunity and you need to be ready to make the most of it. Start preparing your recovery strategy and your marketing attack plan to drive opportunities into your business in the re-emerging marketplace.

After the 2008 recession, many companies were still very cautious and had a ‘ration mentality’. Challenging this can mean the difference between surviving and remaining mediocre or capitalising on the fact that you did actually survive!

What is different about the survivors?

There are several practical tasks within the above points, but there is also an indication of required mindset.

During the 2008 recession I saw many businesses fail because that was the belief of the business owner… they had accepted that failure was their inevitable fate, and acted in line with that belief just because that is what the media was suggesting repeatedly to them.

Of course that is deeply unfair to many who fought and failed regardless, but it was genuinely the case for more than just a few. I saw it with my own eyes!

At the time I was new to business coaching, and vastly less skilled and experienced than others I saw fail at that time whilst I survived. The difference for me was that I came from a Policing background and had a ‘never say die’ attitude. I knew I didn’t know everything and worked blooming hard to learn enough to plug the gaps fast. It made all the difference, and it made me get up early, complete more calls and visits, run more events and win more clients as a result. If I had been lackadaisical or uninspired I would have failed… and I believe the same is true in today’s environment. The survivors will those who are adaptable and make change happen rather than waiting for it.

Be brave, be flexible, and be inventive. Be pragmatic, and be resilient, and you will be successful in your fight.

If you are a UK business and want to talk through your business ‘corona survival’ strategy, or need to some help in creating one do get in touch.

I’ll be happy to arrange a complimentary online meeting with you and see where I can help.

You can email me at [email protected] or call me on 07735 414185 to get that arranged.