“I never saw this coming!” Said every business owner a month after the Corona Virus shutdown A shutdown never seen before that made every owner scratch their head, double check their budgets, and wonder how they will survive the shutdown and reopen their doors. Yes, we’ve been through recessions and depressions, but those always accompanied a bubble in the stock markets. A new kind of shutdown, a recession that came from a virus, wait what? It became a time that made everyone shutdown with their money, avoid it like the plague, yet still be haunted by the fear of losing their business, income, job, house, and even retirement. And here we are 1 year later, so what have we learned?
In my 10 years of being a financial advisor, I’ve never witnessed something that impacted people’s income, investments, business, and livelihood quite like this. I heard from women business owners of all sizes. The owners who not only survived the months long shutdown, and even thrived at times had a few things in common. I became obsessed with learning the secrets of a pandemic proof business, and found the common strategies and methods that worked so well. And if they worked great during a shutdown, how will they work during a recovery? Is there a recovery wave the businesses can also profit from after COVID 19 gets tamed? A wave to help them and you recover faster, build income to replace the months of lost income and savings.
There are four key ingredients to build a safe room around your business for future shutdowns, recessions, and depressions. Implementing these strategies can help you recover faster from any hits your business took, and also prepare for what is lurking around the next corner.
- Save money no matter what is coming in.
- Build an emergency fund for your business like you would for your personal money.
- Create a community around the services and products you sell.
- If you can’t sell, give yourself a raise!
By always saving money from your cash flow, you’ve already created a buffer into your budget. Save a percentage of every sale, which you can dial up or down depending on your income streams. The key is to continue saving, even if it is just 1% of your income, because no matter what…you can live on 1% less of your income. If you can’t then you are already overspending! The hardest thing to do once you stop saving is to begin again! Plus it is a huge blow to your confidence, and tests your sense of financial security.
You might have heard, strike that, you definitely have heard of building an emergency fund for your personal money in case you get hurt, your car gets totaled, or you are laid off. The money is to carry your overhead until you are back in action in the workforce. The same is true for your business! I call it your overflow account! Those months when you are reaping the cash, move a percentage of that cash into your overflow account for the slower months or for shutdowns like the COVID 19 shutdown. Save before it happens or risk getting into debt to keep your doors open, which will only delay your recovery and pause any expansion you had in mind.
The loyal customers will return! If you only sell with little connection or relationship with your customer, then chances are they buy from you because they like your product, not you. But what if they like YOU and your product, they become loyal, raving fans. Even if they can’t buy from you at the moment, they will return, send people your way, and be rooting for you! Keep your audience engaged, make them feel FOMO: fear of missing out. Make them wonder how far behind they will be among their peers if they don’t work with you. How can you compliment your service with a community of support that is so hard to walk away from and impossible to replace?
If you can’t sell, give yourself a raise! How? From day 1 identify which expenses can be lowered and raised depending on your growth. You can begin by prioritizing your overhead by needs, wants, and risks. What are the risks to your business? What do you need to spend to operate, and what are the flashy items you really don’t need but look pretty? If you earn $10,000 more this year, but your expenses went up $10,000, did you earn more money? Nope! Yet if you earned $0 more, but lowered your expenses by $5,000, then you earned $5,000 more. Give yourself a raise by shedding the frivolous items you’ve been spending money on and getting no return on your investment.
Your business should have a money plan to complement it as your business grows, remains stable, or even shrinks at times. Any good plan will move in alignment with your business and vision, which is why implementing money systems that move and contract with your income is key! Think of your money system like your client onboarding system, seamless, time efficient, and optimizes every client that walks in your door or jumps on your website! COVID 19 showed which companies are weak, good, and money making machines. Some good companies got even stronger, while some lagged behind and will continue to lag behind. What kind of company do you want when this is all over?