Business planning sounds great, but what do you do when the future is completely unknown?
The last few weeks show the uncertainty isn’t over. The initial pandemic caused the entire world to stop. Recently, it seemed like there were fewer cases, every state began opening up and the stock market followed suit.
Now, cases are on the rise and Wall Street reacted poorly. There’s really no way to know, for certain, what next week holds.
For startups and small businesses, it’s an additional section in the rollercoaster of running a company. As a rule, entrepreneurs and founders are running around like crazy. And now, there’s another roadblock.
So how do you navigate this uncertainty? Here are 5 specific ways.
1. Pivot (with speed)
Again, startups are used to change. Negative news, product/market fit and so many other things bring the need to pivot. Times of uncertainty are the exact same, albeit it is a bit more stressful than normal.
Pivoting is beginning in one direction, with your company/product, and deciding to change directions in order to see better results. Depending on your current business model and the nature of the uncertainty, it could be a sizable change.
Here are two specific examples of pivots in the current world situation.
Example one: A law firm adds services to include bankruptcy and family services to deal with the potential ramifications of the pandemic.
Example two: A private music instructor immediately switches to holding Zoom instruction sessions to keep the client base during the pandemic.
3 Keys of a good pivot in your business planning
- Speed is vital: Businesses moving light and fast in new territory win the day, in many cases. Getting out in front of the Cares Act funding by providing needed context and explanations of new loans was a crucial part of the pivot at Pasquesi Partners.
- Solve the new problem(s): How are your products and services uniquely positioned to help your customers in the time of uncertainty? Answer this question and you’re well on the way to your pivot.
- Pivot marketing, too: How you market and sell will likely have to change as well. Take a look at your web copy, advertisements and even how you communicate with prospects to account for changes in your offerings.
2. Add value
When times are good, some people are less likely to scrutinize products and services. But when uncertainty hits, the magnifying glass comes out and the cuts begin. Keep clients and even pick up new leads from competitors by increasing the value offered.
Creating more value will be different for each business. For example, the same music instructor, not only does video conference lessons, but offers flexible scheduling. Offering sessions any time of day, instead of evenings.
More students are home during the day, with a lot of extra time. Parents are also trying to work in the same house.
3 Keys to add value
- Faster and easier: Make it easier to buy or use products/services. Handle deliverables as quickly as possible. Do your best to underpromise and over deliver.
- Extras: Offer extra things like discounts, extra services or even additional products and gifts.
- Availability: One of the best ways to add value is to be there when you’re needed by your customers. Add a number to call, live chat on your website or create a support Twitter account.
3. Consistently communicate with customers
The thing about widespread uncertainty is that it affects almost every individual, industry and even country. Your customers are seeing what’s happening, they’re looking at their jobs, bank accounts and families.
Early on in our current crisis, it seems like every business sent out emails, put out content and made an effort to communicate clearly. Over time, those voices have quieted down a bit — even though uncertainty remains.
If you’ve only sent one email (or none at all), please know, this is not at all an indictment on your business.
But your customers and leads need to hear from you, consistently.
3 Keys to improve communication
- Email multiple times: Finding the right cadence in email outreach is important. Most of the time, your audience won’t mind multiple emails per week, even daily communication. But be careful not to overwhelm your customers.
- Step up customer service: Add channels (as previously mentioned) and make sure to respond, as soon as possible, to incoming service requests. Even if you can’t resolve it quickly, respond.
- Be social: Create a Facebook group, specifically for customers. Share your personal social profiles to keep in touch, even if it’s not directly one-to-one.
4. Network
No business is an island, either.
There are a number of partners and organizations aligned with your company. For instance, you likely work with a bank or financial institution. There are also:
- Contractors
- Suppliers
- Companies in similar industries
- Local government officials
Keep in mind, this isn’t an exhaustive list. If you’re going through uncertain times, again, they probably are seeing the same issues. Now is the time to solidify those partnerships, test those lines of communication and get information.
If you sell something physical, in a time where manufacturers shut down for a couple of months, it’s very important to be on the phone. “Essential businesses” or companies in a city with violent demonstrations should be in close contact with local officials.
Key point: Get a hold of everyone in your network. Offer help, ask questions and keep in contact with those directly connected to the business.
5. Manage cash flow
Uncertainty inevitably causes financial concerns. For startups, terms like “burn rate” and “runway” are familiar. Other small businesses may count on average past sales and not really keep cash-on-hand in the front of their mind.
In tumultuous times, dusting off the business planning is always a good idea.
3 Keys to manage cash flow
- Account for potential downturn: Uncertainty can absolutely lead to lost revenue. Factoring this into your budgets and forecasts is an important part of facing downturns.
- Don’t just go one month out: Regardless of a V-shape or U-shape recovery, things are going to be disrupted for a while. Look six months ahead and see how much cash you need to run.
- Make appropriate financial decisions: Once you have a good feel for the numbers, the path forward will clear up a bit. Staffing, inventory and expense decisions won’t be easier, but you’ll be more sure about what to do next.
Fortunately for business owners, there are tools to help in business planning. We recommend Float, which is a simple but powerful tool for cash flow planning.
We also help with Float implementation and cash flow planning, so businesses looking for assistance can contact us for more information.
The worst thing a business can do
Drawing in, playing wait-and-see and hunkering down are some of the worst things you can do in a crisis. Your customers, business connections and employees are ready to walk through any uncertainty with you. All it takes is reaching out.
Head to this page to learn more about how Pasquesi Partners helps businesses in financial planning.