Your business is not you.
Your business no doubt reflects your values and even your personality, but it is not you. It is an LLC, or a Partnership, or an S-Corporation…or even a Sole Proprietorship, but the way business works is that there is in the law some “entity” that is your business. Not you.
The larger your practice grows, the easier it is to recognize when you are acting as you, and when you have to put on your CEO hat and represent the entity that is your business. Hiring, firing, negotiating, suing, lawyering up, singing leases, borrowing money… These are all examples of you acting as CEO and, as noted, occur more often in larger companies.
So, let’s take a look at the reaction of one Edge member (who is among our largest member firms) to the current health and economic uncertainty. My guess is that many of the same issues are present among our smallest, including solo acts.
This Edge member emailed me expressing understandable concern about the current threats to her business. She’s a consulting client of mine, so I know her business and her personnel well. Based on her concerns, I suggested the following:
- I hope you saw my last webinar and have been getting my blog posts on the Coronavirus, including one specifically related to the risk of purchasing. (https://designingprofits.com/should-you-delay-placing-orders)
- The good news is that in unprecedented times, no customer will punish you for taking whatever extreme actions you must take, especially if it does turn out that things start to thaw out in 2-3 months. In fact, I suggest you sit down and think in terms of a 90 day budget for survival! Sit down with your team and come up with a best case, worst case and most likely case scenario for surviving, preferably without taking on any more debt.
- These will undoubtedly include basic working capital “tricks” like slowing down payables. For example, you might just notify your landlord that you’re not paying rent for 90 days. There’s absolutely nothing they can do at this point. You might try to keep employees but reduce salaries by 50% for 90 days.
- I would charge someone with giving you a daily report on federal programs that have actually been approved and pursue them aggressively. As an example, we hear a lot about small businesses being reimbursed for wages IF they will keep employees on the payroll for the next few weeks.
- As for cancellations, I would work hard to turn them into “reschedules.” Accept no cancellations and certainly return NO deposits. There IS going to be enormous pent-up demand when people are feeling optimistic again and the markets recover…which they will whether that’s 3 months or 3 years.
- As for purchases...I would not take any personal risk for purchases. Give every manufacturer a call and find out their exact status. If you’re not convinced…consider having the clients make direct deposits (rather than through you) after explaining to them that you’ve done your homework…but have too small a business to personally take on this financial risk. Maybe it will work.
- Our next Edge Coaching Call is coming up April 2. I’ve thought about throwing together some interim events, but the news changes so fast that I’ve decided to spend my time creating a “Recovery Plan” outline which I’ll present during that webinar.
- Your commercial business is going to take a big hit in the short term. No way around that. I was going to congratulate you on your new hire in that area…but I’m sure you’re now wondering about the timing. This truly is something no one saw coming and puts us all in uncharted waters.
- My most critical question is always, “What’s your timeline?” Are you still planning to be in the same business five years from now? If so, put your head down and do what you have to do, no matter how much it hurts (or hurts others) in the short term. Or, as Winston Churchill said, “When you’re going through hell…keep going!”
- If you don’t want to be in the same business five years from now, you have more options. But that’s a different conversation.
- One of the problems with an event like the ASID webinar you referenced is that everyone’s situation is different. And your firm is unlike 80% of our members. There is no one size fits all, though perhaps there is some comfort in group commiseration…and there’s value to that.
- For you…please feel free to email me at any time with the decisions you’re facing. I’ll get back to you as fast as I can with the hard truths you’re facing.
- You’ve done it before…you CAN do it again.
Here is her reply a day later:
- Thanks for the super quick response on Monday. On Monday afternoon our Mayor put a Stay at Home order in place that meant we had to shut down our office by 5pm yesterday so it was a crazy scramble getting the remaining people working at the office to work remotely.
- On the bright side, home builders are exempt for the ruling which is good because construction is continuing to move forward in housing.
- Thanks for the tips for us to come up with the best case, worst case for surviving the next 3- 6 months. Our quick estimate is we are fine until June if nothing new comes in and we currently do not have any debt so that is a positive.
- We have spoken to our landlord and I told him projects were being put on hold. We did pay our April rent to him in full already, but he did tell me to let him know and he would work with us on it if the need arises.
- Don’t think we need to go to that extreme with employees yet, but are starting to weigh our options and looking at who we are okay laying off and who we might furlough, voluntary leave, reduced hours with reduction in pay.
- On Monday we put in an application to the SBA Disaster loan group and after this 2 Trillion Stimulus goes through hopefully we can apply for that one as well. I think that requires you to not lay anyone off to get the assistance, but not sure of the details yet.
- So far no project cancellations clients just putting them on hold for now. Also reached out to one of our best clients and said we can take on more for the remainder of the year and he mentioned there are projects in the pipeline so that is good.
- Thanks for the tips on purchasing we will take that into consideration. There is no need for me to take on any personal risk. We have plenty of cash at the moment and large accounts receivable and we are invoicing everything we can this week and will stay on top of that.
- Regarding “what’s my timeline,” I have great dreams for the business in 5 years and just need to hunker down and get through this bump in the road. Saw a quote about good leaders see this as just an adjustment in the sails. Having a sailing background I like that—we just need to redirect our course to weather this storm. Love your quote from Winston Churchill as well! (“When you’re going through hell…KEEP GOING!”) We’ll get through it and come out stronger on the other side.
“Regarding ‘what’s my timeline,’ I have great dreams for the business in 5 years and just need to hunker down and get through this bump in the road. We’ll get through it and come out stronger on the other side.”
- The timing of a new top-level hire is ironic, but she’s doing a great job and really whipping the team into shape and has already helped us bring in some new work with her experience. So think it was definitely the right decision in the long run.
- Really is a comfort knowing you are there for us! Thanks again for the super-fast response. (You’re welcome...)
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Take Care and Stay healthy,