Will your small business survive the Covid-19 pandemic? If history is a guide, most small businesses won't. So, what can you do to vaccinate yours against failure?
In this article, I lay out a five-step plan to ensure your business not only survives but thrives post-pandemic.
Your Small Business is Vital to the Economy
"In America, small business is a big deal." - Bob Beauprez
According to the Small Business Administration a small business is any business that has fewer than 500-employees. Small businesses make up more than 99% of all companies in the United States and employ nearly 50% of all private-sector workers.
Not only that, but small businesses also create twice as many jobs as mid-to-large size businesses. It's clear to see that those small businesses and their owners are critical to the U.S. economy. And, why the 2020 pandemic's effect has been so devastating.
Small Business Failure Rate
"The reports of my death have been greatly exaggerated." - Mark Twain
Despite popular myth, most small businesses do not fail in their first year. In fact, according to the Small Business Administration (SBA), 80% of all small businesses survive their first year, and more than half survive their first five years.
But, that's not the case following a disaster. The SBA and the Federal Emergency Management Agency report that 40% of all small businesses that close during a catastrophe do not re-open following the event.
What's more, of those that do recover, 25% will close within a year and, another 25% will shut down within two years.
You can do the math. The Covid-19 pandemic is likely to have a devastating effect on small business. Your business has likely been affected in some way.
If you want to be one of the few small business owners that survive and even thrive post-pandemic, you'll need to be intentional about your rebound.
"It's odd but, agitation or contest of any kind gives a rebound to my spirits and sets me up for a time." - Lord Byron
The word rebound comes from the French word boundir, which means to bounce up. And, that's precisely what we need to do, bounce up.
Now, when I think of rebounding, I think of basketball. And, interestingly, the principles that apply to rebounding in basketball hold in business, too.
In basketball, there are three keys to rebounding:
- Go to the Ball
Related: USA Basket Rebounding Tutorial
In basketball, the first step in rebounding is to locate your opponent and create a spot to get the ball. It's about creating an opportunity.
In business, you want to spot your opportunity, too. Start by examining your strengths and the strengths of your business. I suggest making a list of ten things you did really well before the latest economic crisis.
That list will become the basis of the opportunities you'll want to leverage.
In basketball, once you've identified and moved into your opponent, you pivot to get position. The same is true in business.
You've examined your business pre-pandemic and identified the strengths you want to leverage. Now, it's time to pivot.
Undoubtedly some things you used to do in your business did not serve you well; they mat have even hindered your effectiveness and efficiency.
Take some time to examine those elements. I suggest you make a list of five things you want to leave behind as your business re-emerges.
Similarly, there has likely been some benefit from the recent challenges. Maybe you've found you're spending more time with family, or you've found a new way to accomplish your targets more effectively. Make a list of five new things you want to carry forward.
Go Get The Ball
"Create a definite plan for carrying out your desire and begin at once, whether you're ready or not, to put this plan into action." - Napoleon Hill
Once you locate the opportunity and pivot to get into position, you have to go get the ball aggressively. Now is not the time to wait. Now is not the time to hope. It is time to act.
100 Day Action Plan
When a new president takes office, or a new CEO takes over a company, they often focus on the first 100 days. In fact, many have their entire career judged by what they do in those early one hundred days. It sets the tone for what is to come.
The next 100 days are critical for your rebound. It's time to create a plan and execute that plan. Your 100-day action plan should focus on the following, in this order:
- Financial Management
- Sales and Marketing
- Customer Service
When I am coaching a business owner, I rarely start with financial management. In most cases, lead generation and lead conversion are the most critical factors to success.
But, it is critical right now that you can to weather the storm. So, we'll start with financial management. And the first step is to prioritize your expenses
You may not need to cut, but if you do, you want to ensure you cut the fat and not the meat. So the first step is to prioritize your expenses from the most necessary cost to the least critical.
At the top of the list (the last to cut) are expenses that provide a return on investment. Once you identify those, rank them from the highest return at the top to lowest return.
Next, rank all other expenses based on their need to the business. When you have this list, you're prepared to cut if you have to. Simply cut the costs from the bottom of the list up, cutting only what needs to be cut.
Prioritize Profit Over Revenue
Too many business owners fall in love with the products and services that provide the most revenue. But what is most important is profit. If you're forced to cut back services during the pandemic, make sure to focus on providing the most profitable services.
Sales and Marketing
Once your financial house is in order, you need to ensure you generating and converting leads.
The best way to do that is to double up on engagement with your current and past customers. Reach out, check-in, ask how you can help them.
Be sure to make a list of your most profitable customers, those who continually use and refer your business. What new problems do they have that you can solve for them?
In prosperous times it's easy to take customer service for granted. In tough times excellent service is a linchpin. There are three things to focus on right now:
- Removing pain points
- Being excellent
- Being consistent
Now more than ever, it's essential to make it easy for customers to do business with you. When they do provide them excellent service. It's far better to do less and do it better than it is to do more.
Finally, be consistent. Human Beings crave consistency. And, right now, most people have lost a sense of stability. Be consistent in what you do, and you'll be filling a huge need.
Focus on streamlining what you do. You may have to do it with less staff and fewer resources. So, eliminate anything that isn't essential. And, finally, look for ways to systemize what you do best.
I keep hearing people say they want to get back to normal or create a new normal. Forget normal. Now is the time to innovate.
Customers have new needs, find out what they are, and fill them. Competitors have left the marketplace, how can you fill that void? Now is the time to look for opportunities and innovate.
More businesses will be a casualty of the pandemic than will survive. In fact, I believe history will show the economic damage to be far worse than the health consequences.
If you want to not only survive in business but thrive you need to focus on creating a rebound. Don't wait; the next 100 days are critical to your success.