Standing still is not an option
Here we are nine months into COVID-19 with its associated shutdowns and restrictions with no long-term solution in sight. For some of you, the situation has brought on adequate revenues or even enhanced revenues because of customers associated with companies that distribute essential products and services. For others, it is a major bump in the road that cannot be reversed until revenues return to 2019 levels, but from what I read that probably will not happen until the start of 2022. And for too many this pandemic most likely will wipe you out unless you find alternative revenue and profit sources VERY SOON.
One thing I know for sure is that things will never be the same, which translates into your business will never be the same, requiring heavy action with your crystal ball to find a fix. Can you possibly imagine what will be discussed in public and private board rooms between now and the end of 2020?
Since I am a board member myself, I wonder what changes will be put forth. How to pay for them. What to expect from them and how long to go with the plan before we throw in the towel and move to Plan 2. What is interesting is I had a Board Meeting planned for October 22, 2020. The agenda was set, documents transmitted, and all Board Members notified of the meeting date. But one member suggested we wait to have the meeting until after the election because “I don’t have a clue what to suggest from a planning standpoint until I learn who won the election. “And guess what? All agreed with him because he hit the nail on the head. We would have just wasted our time with discussion covering both sides of the outcome.
Keeping in mind all the changes taking place, with few standard business practices able to provide relief Board Members have to throw out historical data and methods to find new revenue sources from both existing and new customers that may never have been thinkable in the last four or five years. And even those of you finding yourself in the enviable position of making above average profits due to your customer mix, cannot ignore the fact that one of those players in the ALMOST WIPED OUT position will be forced to find new disruptive solutions that could be better than your current offerings to the point where your customer base is leaving for something new, something more efficient and something more profitable.
Let us also keep in mind that if historical data is now useless, preparing budgets using historical data will lead to potentially big mistakes. You almost must start from TODAY to get a clear picture of cash flow.
The November 2020 issue of Forbes covers how many companies are dealing with the pandemic. There are various articles that cover how companies and leaders found ways to excel at these most challenging times. 25 examples are presented where disasters are transformed into opportunities of a lifetime. From flower delivery to high-end hotel services to banquet furniture to training services to modular building blocks. All were transformed into new revenue streams and related profits from selling products and services new to the company after the Covid hit. Other publications offer up similar examples. Try to read them and see if they can help create a new business model or revenue silo for your company.
Entrepreneurs drive the economic engine of this country. And once an entrepreneur always an entrepreneur. Start one business and if it tanks, build another, and so on. The core of our economy is driven by these types of people. Starting and running a business is in their blood.
You are one of those people. But maybe you never had to practice this gift you have. But if it is true that how our economy works going forward is going to drastically change without any hope of returning to previous modes of operation is suggest maybe it is time for you to stir up your business juices to protect your involvement in the material handling business. In other words, you now employ several people, have multiple locations to service customers, probably represent various product lines, and borrow along with industry standards.
Now lock the door and ask yourself “What would I do with all this if sales decreased 50%, and my customers start leaving for a lower cost, efficient option? What would I do with these assets to stay afloat?” Many of the entrepreneurs in the Forbes article found ways to make it work, to use their experience, obtain financing, and forming partnerships to make life easier. What did you come up with?
The “partner” part of this equation is also especially important. There are people out there and companies out there that can help you turn assets and supply services using the assets and knowledge you have. I know if you spend 10 minutes thinking about this partner angle you will find a “partner” you can work with to cross-sell products and services.
In the end, remember that the only person you can count on 100% of the time is yourself. And it is 100% up to you which way it goes.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail firstname.lastname@example.org to contact Garry