Many states, including Indiana and Illinois, have enacted “stay-at-home” orders for all but essential businesses. So if you find your business in this non-essential category, what do you do with 2 or 3 week of quality time? Could this turn-out to be a gigantic gift?
You can approach these 2 or 3 weeks off in one of two ways, it is really about what you believe. Are we:
1) at the beginning of the great depression as the media would like you to believe or
2) will this slow-down only be a blip on this year’s operating performance.
I’m of the belief that it will be #2. The Coronavirus facts as of today: a) 90% of those tested don’t have it, b) death rate is less than 1% (less than 1 person dies of 100 that are tested), c) it is impacting the older generation worse than anyone else; especially those that have other major health issues, d) more people are dying of the common flu than of the Coronavirus (estimates for flu deaths this season is between 23,000 and 59,000; last season 34,200) and e) the next 10-14 days will be the worst. But there are multiple procedures being tested this week that may be the cure.
This article isn’t for people who believe we are at the beginning of a depression. This is for the people that believe we see the light at the end of the tunnel and this will be a short term blip in the overall scheme of things. So we have 2-3 weeks of time that we normally don’t have at the beginning of spring to do some awesome things. What to do, to maximize the value of these 2-3 weeks?
Here is a list of things you may consider:
· Tune up your marketing plan. If you don’t have one, create one. Marketing is becoming more and more important. Creating leads for your sales people should be a high priority for you and your company. Or fine tune the one that you have make it better by evaluating the data you have been collecting from prior years. What is working and what isn’t? What should you put more resources in ($ and people) and what should you tapper off?
· Create/improve your sales plan. If your organization has sales people, what are their goals for this year, for the month or quarter? What has changed given this shutdown? Have you completely lost sales or can you recover them? How are you challenging your sales people? Are you using: a) inventive programs, b) spiffs, c) education, and d) motivational meetings (frequency of)?
· Evaluate your operational assets. With interest rates as low as they are today and with the willingness of banks wanting to loan money, it is a GREAT time to evaluate what assets are costing you more to hold and operate than to get replacements which would be newer and cheaper to operate. Many times you will find that the monthly payment for 3 years on a new(er) vehicle is cheaper than the current maintenance costs.
· Evaluate your PROFIT plan for 2020. This medical shutdown will create changes in revenue, expenses and profitability. Have you re-adjusted your profit plan for March, April, May, June, July, and August? Can you make up that profit that will be lost in the first ½ of the year in the last half? If an economic outlook for the next 12-24 months would help you, email me for my monthly report. If you don’t have a profit plan for this year by month, you can also contact me for help in creating one. A smart business man once told me, there is a higher probability of hitting your profit target for the year, IF YOU HAVE ONE.
· Evaluate your balance sheet. Given long term rates are now in the low single digits, it is a perfect time to evaluate your working capital and restructure your long term debt, especially if you haven’t done that in a while. Improving your working capital enables you to take discounts on material purchases, fund clients who need longer payment terms and make more money. I recently talked to a business owner outside of Chicago that won’t take on higher margin work (40% vs 25%) because the lower margin work turned quicker into cash and the higher margin work (more profitable) took longer to get paid. He has a balance sheet problem. You might be in a great position to re-structure your balance sheet to build up your working capital. We have a quick way of evaluating that for you, just contact me.
· Evaluate your people. Most businesses have employees that are on the bubble, they are useful; but not at the quality you really want. Maybe now is a good time to furlough them and see how things run without them for a while. Re-work your organizational chart and make sure everyone understands who they work for by displaying it.
· Evaluate your communication process. Do your key people really understand your goals and objectives for 2020? What are you doing on a consistent basis to re-enforce these? When you ask people down the organizational chart to tell you the goals for their department (or company) this year, do they know?
These two weeks of down time is a great time to do something you never had the time to do in the past. This maybe a great opportunity to get more things done than you ever thought possible.
Have a productive week
The Prophet of Profits