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When the Covid-19 bans went into effect, I immediately received calls, text messages, and emails from customers, friends, and family around the world.
The lyrics contained questions, fears, and a consistent theme of not knowing how their business would survive the lockdown. They were stuck trying to figure out how they would pay their team, suppliers, and rent with the business closed.
Many small businesses in the US have already closed permanently. An estimated 55% of businesses that have closed since March are not expected to reopen.
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I sat down with my team and spent a few days working out some measures business owners could take to enable them, firstly, to survive the lockdown and, secondly, to rebuild a more substantial business than they did before the Had done chaos.
1. Protect your operating money
To make this easy to understand and understand, let's look at how people deal with a lack of resources. Humans can survive for 30 days without food, 3-4 days without water, but only 3-5 minutes without oxygen.
Running cash is oxygen in your business. If you run out of operating money, your company will suffocate very quickly. If you want to keep your business healthy and alive, you need to make sure that you are protecting your operating money.
We use a very easy to understand exercise that will allow you to make significant savings in just a few hours. Since the global lockdown began, we've taught business owners worldwide and we've been able to help:
A Texas gym owner saves $ 5,400 a month on income statements (approximately $ 60,000 annually). A Toronto business consultant saves $ 3,000 a month on business expenses (approximately $ 36,000 annually). A medium-sized company in Amsterdam was able to save 300,000 euros on their expenses
Our team called it the traffic light exercise. Imagine a traffic light in the United States. It consists of red, yellow and green colors. Red means stop; Yellow means slow or careful. Green means to go.
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Part 1 is to print out your detailed income statement or credit card receipts for your business.
Part 2 is to comb all the editions and colors, each with red, yellow or green. Red represents any expenses you need to get rid of right away, yellow stands for expenses you may need to keep or which you may need to cut out if your business slows down. Green is the output you need to keep your business going to keep your business going.
Part 3 is to get rid of the cost in red right away. Put together a plan for the spending in yellow (the following question may help) and you'll keep the spending in green as it is necessary to keep your business alive.
Question: What specific results do we need to maintain or achieve in order to maintain the yellow issues? If we fall below these results, we must eliminate these costs immediately.
2. Protect your core customers
A core customer is a customer with whom you do business on a regular and consistent basis. They depend on your product or service to meet their own needs and your business depends on their business to keep the door open.
According to Harvard Business Review, acquiring a new customer costs 5 to 25 times more customer loyalty. The annual Salesforce Sales Status Report shows that 79% of business customers agree that it is easier than ever to move my business to another location.
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A few years ago I worked closely with one of my favorite business mentors, Keith Cunningham. He suggested a question that changed the way I work with my core customers.
He asked, "What would you have to offer your core customers to be insane for them to ever consider going anywhere for that type of product or service?"
To find out, we need to take the time to get to know the needs, wants, and desires of our core customers.
A need is something we cannot live without. If this need were not met, the business relationship would end immediately.
A need is something we can certainly live without, but we may not want it. An example of this would be the fact that we need a safe place to live, but most of us want a ______ (lake house, chic home, one with a great view, etc.) place to live.
A wish, these are the things that call us when we drive through town or leaf through a magazine, but we could never justify investing the capital in maintaining it.
Take the time to sit down with your core customers and get to know their needs, wishes and wishes. When you've finished your research, answer these two questions:
What would you have to offer your customers that would drive them insane to ever think about going anywhere? What would you have to offer your customers to make them go insane to ever think about not working with you anymore?