2020 was set to be a fantastic year. All signs were positive, and the first two months were already promising. Until suddenly, in mid-March, the virus arrived from China and simply stopped life in its tracks.
Suddenly, businesses faced an unprecedented situation that no one could have prepared for. Unfortunately, this is not the kind of nightmare you can quickly wake up from in the morning. Instead, it’s the kind of ongoing situation that we will continue to face, day after day.
At this point, most of our strategic plans can be thrown away, and we must go back to the drawing board. The high level economic indicators do not bode well. In 2020, our economy will shrink by 8%, according to the Planning Bureau and the National Bank. But… strategies to come out strong after this strange, surreal state are still possible.
Ready to shoot your business off the starting blocks again? Find out how you can get the most out of annus horribilis 2020, by reading on…
1. Map the impact in detail
First of all: measure the damage. How much has your company been affected financially? What does your current cash flow look like? Can you still fulfill your obligations to pay off debts? Have you benefited from any support measures?
Mapping some detailed answers to these questions will give you valuable information, and help you make smart decisions moving forward.
In terms of support measures, be sure to assess the long-term impact they will have on cash flow. Don’t get caught off guard. Some measures, like postponing social security contributions, only provide a forbearance period – rather than a full forgiveness.
Next, make sure you are aware of your customers and their situation. Good communication with your existing client base allows you to more accurately estimate impact on your current AND future sales figures.
And of course, don’t forget your suppliers. They are likely facing challenges too. Make sure you identify possible delays or complications with deliveries, logistics, and transport so that you can have a backup plan ready.
Lastly, how do things stand with your employees? Have your team members or their loved ones been affected by the virus? Check in to see whether there is a skill or experience shortage due to the absence of important colleagues. Provide open and clear communication. Motivate your team while remaining clear about your expectations, and staying in compliance with guidelines.
2. Make a survival plan for 2020
Reculer pour mieux sauter… the fact is, you have to take a step back in order to jump forward towards a brighter future.
For the remainder of 2020, your goals should be to simply survive while determining which direction your company will take moving forward.
Make clear choices. Work in survival mode while evaluating your business plan in the short term. Later on, you can roll out long-term strategies. For now, be agile and flexible in order to get through the crisis intact.
Now is the ideal time to focus on innovative digital ideas for your work tasks. Many of these may even be possibilities you toyed with in the past, but never implemented because other projects took priority.
3. Boost Your Sales
Acquiring new customers might seem impossible in a crisis situation. Yet, if you take a step back, you will see opportunities opening up. For more ideas, take a look at this article on how you can increase your turnover in the short term.
Start with an analysis of your current turnover. Align your sales activities with your survival plan. Prioritize your best customers and pause less profitable customers if necessary.
Try to sell more to your best customers so that your average order value increases.
And of course, be sure to evaluate your pricing strategy. Jagmohan Raju and John Zhang of Wharton University previously showed that a 1% price improvement can lead to a 10% average positive impact on profits. That means making even a small adjustment in price is even more important than a 1% savings on fixed or variable costs.
4. Cut Costs
In order to come out stronger after a crisis period, it is crucial to strike a balance between savings and countercycle investments. Save on fixed costs, deploy employees efficiently, and increase your process efficiency. You can find a more extensive look at cost reduction in this article.
In a crisis period, many businesses are tempted to immediately dismiss employees. This is necessary in certain circumstances, but take a look at which skills and workers you will need in the future. Layoffs are not always the best solution, and loss of knowledge and expertise may make it harder to emerge after the crisis.
Get assistance you can trust
The three crucial ingredients for a successful restart after the crisis? Motivation, thoroughness, and communication.
After a health crisis, you need to be ready for the economic consequences. Conduct open communication with your stakeholders and keep in touch with colleagues.
Most importantly? Don’t fight this crisis alone. There are many people around you who can be an honest, helpful, and supportive sounding board.
When you run into challenges, it becomes almost impossible to see the forest for the trees. Don’t be ashamed to call in external help. An expert or coach can guide you through tough times, give you focus and perspective, and get you on the right track.
Need a sounding board to help restart your organization during this crisis?