The New “PPP” for Small Businesses: Proactive. Positive. Planning.

    There are a number of key action steps small business owners need to take in your quest to not only withstand the COVID-19 pandemic, but to also be able to tell your story on how you managed the worst global crisis of your lifetime. Businesses that survive the pandemic will be those that take action, face the challenges and stay strong.

    Maximize Your Leadership Role
    “The speed of the leader determines the rate of the pack.” — Wayne Lukas
    • Inspire and motivate your team. You are the one who can set the pace and tone of your business. Now is a good time to reevaluate your team, realign your structure and determine which tasks to delegate and to whom.
    • Dust off your strategic business plan and re-look at your company’s plans for the next 12-24 months. What are the new opportunities that you can take advantage of to maximize your strengths?
    • Leave time in the day for the unknown. Be available for questions from your team. Address rumors immediately. Communication and transparency have always been important, but right now they are critical.

    Leverage the Power of Outside Resources
    “Knowledge speaks, but wisdom listens.” — Jimi Hendrix
    • Establish a brain trust by developing an independent board of advisors who can bring to the table “outside of the box” thinking. These individuals should be people you trust and respect.
    • Be open to new ideas. Meet with your professional advisors collectively on a
    quarterly basis. This may include your CPA, Insurance Agent, Attorney, Human Resources Consultant, Industry Expert, Marketing Firm and Banker. Stay on the cutting edge. Consider pursuing a leadership role in industry trade associations.
    • Become the expert and make yourself known to be the “go to” person for advice. If you haven’t already done so, consider investing in a business coach. What’s in your personal library? Take time each day to listen to a podcast or a short video.

    Operate for Cash Flow First, Profit Second
    “Revenue is vanity, profit is sanity, but cash is king.” — Unknown
    • Create and monitor cash flow projections. Now, more than ever, you must know your sources of incoming cash and manage your outgoing cash. Creating a cash flow projection takes time and/or resources.
    • Consider investing in software that
    does the hard work, so that you can spend time analyzing. Review your cash flow
    forecast weekly. A common trait among all successful business owners is that they understand their cash flow and create action plans accordingly.
    • Reduce fixed costs. Bill early and bill often. Drop deadbeat clients…a slow paying customer can be worse than no customer at all. Create contingency plans, both worst- and best-case scenarios, and know what
    triggers you are going to pull on either end.

    Define Your Reality: Negotiate & Document Everything
    You may have to fight a battle more than once to win it.” — Margaret Thatcher
    • Negotiate with vendors. Be willing to walk away from a bad deal, either on the purchasing side or the selling side of your business. When was the last time you looked at your pricing and mark-ups? Is it time to increase pricing? Mystery shop your competitors. Look at your industry’s studies for fees and pricing.
    • Challenge the “untouchables.” Make a list of your commitments, contracts and purchase orders, and calendar their expiration dates so you can prepare to negotiate in advance. Don’t settle for the same old; be creative, and look for bargaining points.
    • Protect yourself. Memorialize agreements and understandings in writing.

    Grade Yourself Often
    “To map out a course of action and follow it to an end requires courage.” — Ralph Waldo Emerson
    • Hold Monday morning team meetings to review deadlines and weekly metrics, which would include financial, production, personnel, and marketing. These meetings enhance collaboration toward common goals and provide clarity of what is to be achieved. You want your team to all be rowing in the same direction.
    • Benchmark your business against industry standards, know and develop your business metrics and key performance indicators. Ask your bank for your company’s “spreads.” Even if you don’t have a loan outstanding with a lender, they will have targets for businesses similar to yours for various ratios, including liquidity, debt to equity, and fixed coverage ratios.
    • Consider surveying your employees, vendors and customers.
    You will not be able to do all of these things at once. Determine and prioritize your actions so that you are positioned to survive and thrive through the post-COVID-19 era.

    “Failing to plan is planning to fail.” — Effie Neal Jones