As a CPA who has had the pleasure to work with hundreds of entrepreneurs, founders and small business owners I am often the first phone call when folks are faced with either financial adversity or uncertainty. The emergence of the COVID-19 pandemic is something that undoubtedly will impact the hardworking men and women responsible for leading their companies through the uncertainty we face but the biggest measure of that impact will be determined by how we respond to the adversity. With that in mind, I’m synthesizing the advice that I’ve already shared with a number of clients to hopefully provide some perspective from someone who is both a small business owner and a trusted adviser to other entrepreneurs.
Don’t Panic
One of my favorite pictures floating around the internet that I think ties in nicely with leadership is this one. As a business leader, your response to stressful situations permeates through to your employees whether you realize it or not. The ability to navigate uncertainty in a calm and collected manner will go a long way towards creating or reinforcing a culture in which your employees adopt and embrace the same behaviors. Now is not the time to make rash decisions or create pointless chaos. That being said, you should be paddling like hell below the surface to make sure you have a plan that you can put into action if needed.
Have a Plan
Though no one can predict exactly what the impact of this pandemic will be, that doesn’t mean you can’t take meaningful action to preemptively plan your response to a number of potential outcomes. Having a strong grasp on your numbers is always critical to success for any entrepreneur, but it applies now more than ever. If you don’t have a process for financial modeling, budgeting, reviewing budget variances and forecasting future performance, then it will be difficult to plan ahead without reliable visibility into your past, current and future numbers. How can you identify discretionary costs to cut in the event of a cash flow squeeze if you don’t have a strong understanding of where your money is going?
Identify Opportunities
This is by no means meant to be insensitive to the reality faced by those impacted directly by the virus but the current landscape could present some opportunities for your business. Do you have a key differentiator that makes your business more desirable to consumers right now? For example, as a virtual firm, we don’t need our clients to visit our office in order to do their accounting or tax work like some other traditional brick and mortar firms. If you have a similar advantage, you should bring that to the forefront of your marketing messaging as soon as you can. I do not, however, advocate taking advantage of the current situation to exploit consumers with higher pricing (even if the market conditions demand it). In the long run, that won’t sit well with your consumers.
Eliminate Your Blind Spots
Adversity can be a catalyst that causes you to improve the long-term outlook of your business. While you’re developing your action plan from #2 above, take some time to identify the blind spots within your business and where you need to improve. It can be a great way to reassess your business strategy and goals, especially as they relate to your ability to overcome various obstacles. Is your business well positioned for success for the indefinite future? If not, why not? Work to ensure your business has a healthy long term horizon that can withstand temporary hardships.
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