If you want to save your business from the coronavirus crisis, Sageworks co-founder and Inc.com columnist Brian Hamilton says you’ll have to start by turning off your news notifications.
In a webinar hosted by Inc. Wednesday, Hamilton presented his 90-day action plan for surviving the pandemic. The first step in the plan is focusing narrowly on what you can control, which means ungluing yourself from anxiety-inducing headlines and constantly shifting predictions about the virus. “We have to look inside,” he advises, to pull away from the chaos and get your business through this. Here are four more of his tips.
1. Use cash forecasts.
You want to create a 12-month cash forecast that includes your fixed and variable expenses, as well as good, bad, and ugly scenarios for how business could play out over the next several months.
He likens this step to the adage, “When you’re in a hole, stop digging.” Slowing down and developing concrete data can help you stop sinking further and further into a hole. Instead, calculate how much dirt you might need to fill it up again.
2. Communicate thoughtfully and proactively with landlords.
Rent is a key concern facing small businesses right now, he says. But, once you know your cash flow, you can communicate more effectively with your landlords. As a commercial real estate owner himself, Hamilton says he would be most responsive to a struggling tenant if they were to do the following:
Send a thoughtful email ahead of time
Cite their cash forecast and modeling work
Communicate precisely and frankly about their ability to pay over the next several months
Don’t just tell your landlord you’re not going to pay, Hamilton recommends. Try to come up with a middle ground, like paying half at a certain time and half later.
3. Cut expenses (not personnel).
“Every business, every one of you, has expenses you can reduce. You can always do it,” Hamilton says. Pore through your expense reports to find small costs where you can save money. After that, especially for services like marketing and advertising, he says, you’ll want to measure the relationship between the things you buy and how much money they generate for you. If you can show a causal relationship, keep it.
The last thing you should cut is personnel, Hamilton says. Once you do, you’ll likely see a drop in morale, difficulties hiring the employees back, and lower chances of having your PPP loan forgiven. Motivated employees are important, he argues, because they can help you execute one of the best ways to make it through this crisis: the pivot.
While the exact pivot will be different for each company, finding a way to move your business online or produce in-demand coronavirus-related products are two examples.
4. Apply for aid early and with experienced lenders.
When you’re applying for federal aid, Hamilton advises:
Go to an (accredited) lender that is very experienced with the SBA, even if that means it’s not your usual bank.
Be a “nudger.” Check in with your point of contact at the bank every couple of days to keep your loan request top of mind. It probably won’t be there otherwise.
“Be the first one in line,” he says. Apply early and carefully for your aid, so delays don’t cost you time and money.
Being realistic with yourself and your employees and proactive with your lenders and landlords are all ways you can sustain your business through this crisis. Consider Andy Dufresne in the tunnel at the end of The Shawshank Redemption, Hamilton says: You just have to make it through this challenge one inch at a time. The best you can do right now is just keep moving.