Rather than worrying or panicking about how the Covid-19 scare might impact your business, focus on taking action. The expected economic downturn may be a silver lining for those who are prepared!
Below are five steps you can take to position your company for success:
1. Minimize outflows of cash.
Focus on spending money on activities that will increase income. You can also try to lower your monthly rent. For example, you may be able to negotiate a longer-term lease in exchange for the lower rent.
Also, instead of reducing salaries, reduce hours first, if necessary. Think productivity. If you cut someone’s salary by, let’s say 15%, but ask them to handle the same workload, they will resent their lower hourly wage and will (subconsciously or otherwise) reduce their productivity by the same amount or more. Cutting hours is a much better idea. You’ll save the same amount of cash, but have a better chance of getting the same level of productivity from your employees.
2. Revamp your product/service offering and marketing campaign.
Even in a recession, billions of dollars change hands every day. However, consumers and companies shift their spending habits during economic downturns. They want to get more value at the right price. It is important not to fall into the trap of lowering prices; someone else will always be willing to make deeper price cuts. Instead, change your marketing message to highlight your value proposition: tell prospects why they should buy from you over your competition and how your product or service solves/improves problems. And, finally, increase your marketing reach by at least 4x!
3. Communicate, communicate, communicate.
Ideally, the employees should be the first ones to know about how the company intends to handle the situation. Don't let them hear negative news about your business from external sources. It would only alienate them. Instead, a crisis is a perfect moment to enhance trust and keep morale high.
4. Don’t slow down. During this period, the instinctive reaction is to slow down. This is a huge mistake. Why? An economic downturn is an ideal occasion to improve efficiency, finalize those job duties you've been meaning to write or put together detailed quality control checklists. When the economic activity resumes, you not only want to be ahead of the pack, but in a better position to handle the uptick in business activity that will come. Keep the momentum high!
Set new goals. Keep your staff motivated and productive. Do this by working on a new game plan so the whole team can focus on concrete actions and goals. Cultivate and support an attitude of “we’re going to weather this downturn together.” Including staff members in the problem-solving process will motivate them to give that extra effort during tough times.
Marco Scanu is a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in 4 different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based consulting firm providing attorneys and individuals with immigration business planning services.