There are two choices when approaching this pandemic. Choice A and Choice B. Choice A consists of blindly letting go of your employees, buying materials in a panic, and obsessing over the news while ignoring the changing marketplace. Choice B is analyzing company cashflow, securing government incentives, repositioning service offerings, and using the right technology when working remotely. Danny Kerr joined Michael Gogan on this webinar to fully flesh out how and why your company should be striving towards Choice B.
Danny Kerr is the Director of Assessment at Breakthrough Academy. He founded BTA in 2015 and has been successful “through pure hard work.” Being an entrepreneur, he can relate to the struggles COVID-19 has brought businesses. But through three distinct steps, Kerr has found a way to navigate the changing economy and all the challenges it brings.
Click HERE to watch the full webinar.
You can view all of our COVID-19 resources here.
Planning Cashflow Strategically
A cashflow system tracks the movement of the money within companies. Within this system, sustainability and balance are important. It is not necessarily always about making a profit. Sustainability ensures stability — which in times of chaos is invaluable. Understanding the company’s stationary monetary position, as well as the movement, is vital when protecting liquidity.
Another helpful trick: analyze your financial projection. Do this by evaluating variable, fixed, and non-profit expenses, as well as any owner withdrawal reviews. Variable expenses include rentals, payroll, materials, etc. This category typically has the most room for monetary cuts. Be sure to allow what is efficient to guide your decisions!
Cutting fixed costs can be an “emotional thing.” Do your best to set aside all emotions and assess the situation objectively. Examples of fixed costs are office expenses, vehicle leases, marketing costs, etc. Identify where the dead weight lies. Many cut their marketing budget before anything else. But! That’s a bad idea — “in fact, you should double [your marketing budget]!” This is the time to get your name out there.
Non-profit and loss items are centered around loans and taxes. And the owner’s withdrawal is the money provided to the company from the owner himself/herself. Many companies are still waiting for clients to pay for past projects. Add incentives or penalties to the completion payments to positively impact your cash inflow. Danny recommends starting to collect your ARs (accounts receivable) too.
To improve company cash inflow, identify available resources. There are new government incentives. It includes paid leave, a government stimulus package, small business loans, tax credit/deferrals, mortgage deferrals, etc. Those are opportunities worth sharing with coworkers. Danny also explores the option of temporary layoffs. To do this, know which high skill talent your company needs to provide long term value to your business. When employees have been laid off, set up a package so they know where to go to get assistance and what to do next. Communicate weekly and take care of people you want back. BTA sends temporarily laid-off employees UberEats, for example.
Maintaining Through the Turbulence
It has been a month. And everything has shifted. Companies need to adjust and evaluate what work is available now. For example, schools are empty! Danny asks, “how can you get into that world?” Assess the situation and modify your workforce accordingly. Because of social distancing, several industries have changed their focus from interior to exterior. Buildings are still needing to be cleaned and maintained — so use your team to disinfect homes, businesses, and government property. Focus on the landscape element of the building, as opposed to concentrating on interior components.
Money is one of the main stressors during a time of turbulence. Setting realistic financial goals will help minimize that stress. Predict your sales funnel, jobs obtainable, and estimates in advance. Numbers have likely decreased during this pandemic, however, restructuring old goals will pave the way to business success.
As mentioned earlier, the marketing budget should be the outlier. Warren Buffett famously stated, “be fearful when others are greedy, be greedy only when others are fearful.” Danny says marketing is the answer to thriving in a turbulent period. From google ads to calling loyal customers, network and connect with everyone possible. When the world gets back to normal, people will remember you and your company. Although social distancing may deter face-to-face interactions, it doesn’t have to prevent people from connecting. Both passive and active forms of marketing are recommended.
Building Into Your Business
Your business is a machine. It produces great work but requires support. Entrepreneurs can get carried away by pouring so much into their company, they forget to invest in themselves. Danny reminds everyone to take the time to build and strengthen oneself first. When leaders are at their best, the results show vibrantly within the company. Self-care is non-negotiable.
With the extra time on everyone’s hands now, invest in your company’s internal systems. Look into apps and services that provide team communication, systemization, digital meetings, and estimation. Maybe set a company goal and go paperless! Many apps can help keep business records, as well as assist with any project and financial management.
Here are a few of Danny’s suggestions: Slack (for company communication), Zoom (for digital meetings), Eagle View (for aerial view estimating), DocuSign (for electronic signature), and CompanyCam (for photo documentation).
Comb through inefficiencies within projects and employment. Start by restructuring your recruiting system. Due to the coronavirus, many have lost their jobs. 6.6 million Americans are currently unemployed, and a lot of them are absolute “rockstars.” These unemployed individuals are only available for a short time — find space for them. Key sources for recruiting are: Craigslist, Zip Recruiter, Indeed, Facebook, and Linkedin. There is no expectation of officially hiring, but at least get your name out there. Familiarize these talented candidates to your business.
“It is important to keep context of what is really important.”
Thanks Danny for the advice!
Click HERE check out the BTA Playbook. It provides tools to plan your cash flow, a summary of government incentives and technology ideas for working remotely, the 71 Point implementation checklist, a company dashboard tool to track KPIs, and much more! Download code is: JN0414