Your COVID 19 Survival Kit

Hi Folks,  

I sincerely hope June is the month you get back to being great.

This is an interesting time with no precedent that we can learn from. Most experts say that this period is going to test businesses and their core fundamentals. Many opine that the recovery period is going to be an uphill battle for all of us as a whole.

So like most of you, I did my fair share of ‘sharpening the tools' too.

I sieved through and enrolled on as many ‘surviving COVID’ or ‘post lockdown strategies’ or ‘cost-optimization’ or ‘beyond COVID’ or ‘dealing with COVID challenges’ or even ‘responding to COVID’ themed webinars as possible.

I found many of course.

I spent several hours each time, often waiting for that one line of inspiration that we had not tried yet.

Every time I encountered the ‘No cookie-cutter model’ or ‘No one-size-fits-all’ language I ended up a little more disappointed.

At the end of most sessions, I felt I was left hanging - hanging for conclusive and actionable solutions.  

If I, as a professional, felt this way, I could only imagine the business fraternity.

I decided, that this is going to be resolved only with cookie-cutter language.

Hence this article. 

Note:

This article is different.

With each step, I will try and provide you with case studies from work or examples of how you can actually implement these initiatives. Do spend some time going through the links if you plan to implement them in your organization. It could give you a fresh starting point. 

Let's begin.

#1 / ‘Start with why’ is a great place to start.

Also, ‘Start with Why’ by Simon Sinek is one of my favorite business books - take a gander at it sometime.

This is a great situation to ask yourself why you are providing a particular product or service. This will help you analyze if everything you are doing is tuned to help you collectively move ahead. Some products/ services can be cash-cows, some can be stars or some can be question marks even (recommend reading BCG’s Growth-Share Matrix here > https://www.bcg.com/en-in/about/our-history/growth-share-matrix.aspx). 

In real life (IRL):

One of the technology companies we worked with was doing great, but their profitability did not seem to be matching their revenue growth.

We questioned why the company was selling any of its products or services while running a financial deep-dive in parallel quietly.

Being external service providers, we had no preconceptions or biases.

More importantly, we did not run the risk of looking stupid while challenging basic assumptions.

Turns out that while the company had moved to more premium offerings – that were making them the margins that outperformed their competition, there was still a division that was selling a legacy solution which:

• dwindled profitability at a gross margin level;
• required high allocation of sales effort;
• had low relationship value; and
• provided little to no upsell opportunity.

You can read our case study with step by step solution here >

How we helped a 10+YO tech company recover ~10% of their bottom-line by deep-dives into the LOB profitability & scenario analysis

[ Download Leaf Case Study ]

#2 / Don’t aim for ‘cost reduction’. Aim for ‘cost prioritization’.

Another tech company, let’s call it Leaf too, was starting to sense that it needed to increase its runway to stay afloat so it could maintain the valuation metrics we had defined.

After several discussions, we realized that the benefits of doing a cost reduction cannot be achieved without it hampering the business progress or impacting the psyche of the team.

We suggested a cost prioritization exercise instead:

1. all units were asked to come out with priority schedules to the costs they were incurring and planning to incur over the next without hampering progress in any way;
2. units were then asked to create ‘what if’ scenarios for all the costs that ranked toward the bottom half of the priority checklist;
3. each business unit head was enrolled to prepare a ‘Win-Sheet’ summarizing how these risks could be covered and the potential costs/ gains could come.
4. all business units were asked to present their win-sheets to all the other unit heads in the organization
5. a competition was conducted to reward wins based on the % achievement of targets set up

Impact:

Leaf was able to set aside over 30% of expenses to the next quarter and led to a cost reduction of ~$60k per month as well, which was over 10% of their bottom-line in under 30 days. 

#3 / Level-up your pricing strategy

61% of companies don’t have a pricing strategy at all.

I know!

I was as shocked as you are.

Well, do you have one?

Ask yourself:

1. Do different people in your sales team get different prices for your services?
2. Do you have an idea of the exact cents per dollar you bring back from an additional sale?
3. Do you feel you underpriced on some bids?
4. Do you feel you ended up losing bids because you priced way too high?
5. When was the last time you relooked at your pricing? Has it been 6 months since you did?

If the answer to any of the above is yes – You don’t have a pricing strategy.

Doing pricing right has statistically increased revenue by 16%.

But changing pricing strategy now is scary right? What if my customers leave?

98% that changed pricing saw an immediate increase in LTV.

Don't worry.

Pricing is an extremely simple process - if you do it the right way.

You can read our whitepaper here >

How to price your SaaS product the right way

[ Download SaaS Pricing Whitepaper ]

#4 / Enroll the entire team to think ‘for us’.

Entrepreneurship feels like a lonely journey right?

Well, it doesn’t have to be.

Getting the team’s enrolment also means that they feel responsible to see this through together.

This means that everyone looks for ways to do things better too, not just the management.

This automatically means that they become invested and accountable to give you wins.

Enrolment does that.

So how did this help us advise our client, lets call them ‘Pepper’, use team enrolment to speed up collecting on receivables by over 50% and increase their bottom-line by 5%?

You can read our case study with step by step solution here >

How we helped a 5+YO tech services company add 5% to their PAT by rethinking their approach in collecting on their receivables.

[ Download Pepper Case Study ]

#5 / ‘Revamp your reporting language’ to include accountability & ROI thinking every time.

If there is only one thing you do this time around, this has to be it.

One of the most effective things we have seen work is getting a super defined reporting language that ditches the typical MIS understanding and focuses on only those metrics that matter.

In a few of our mandates, an MIS does not even contain an income statement or a balance sheet. We like to center it only around those business metrics that are capable of either detecting, diagnosing or performing a root-cause-analysis – this includes companies who are doing business in the 10s of millions of $s.

It gives the business a more structured way to interpret and use data.

When was the last time your financial accounts gave you any actionable insight?

You can see our product deck with samples of dashboards and what they should ideally cover here >

Alpha Metrics, dashboards that matter

[ Download some dashboard screens ]

Back to the beginning

This year has been ‘tumultuous’.

This year has been ‘unprecedented’.

This year has been ‘challenging’.

This year will be about resilience.

Nobody said it was easy.

No one ever said it would be so hard.

I’m going back to the start.

Credits: The Scientist by Coldplay

Wishing you a speedy recovery.

That's all folks.

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Disclaimer: Please note that these are our views are based on our experience in being advisors and working with various organizations across 20+ industries. They are for the limited purpose of educating the leaders of a company. The rationale and the procedure to be followed can vary significantly based on the context, exact nature & size of the business. 

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About me:

A Chartered Accountant by qualification and entrepreneur by passion. I also hold a post-graduate in international business strategy from IIFT, Delhi. Currently working with Prequate, a management^finance advisory company in the Strategic Finance Office & Investment Banking, Mergers & Acquisitions verticals. You could read an expanded version on Prequate's blog: [ To be updated ]

More about Prequate? [ Website ] or [ Book some time for a chat ] or email me on nag[at]prequate.in.