The Pappajohn Entrepreneurial Center and SBDC knows that small business owners are rightfully concerned about survival during these uncertain times. Businesses that survived 2008 and beyond didn’t take needless risks with their businesses, but they did do a few things differently. Take the necessary steps so that you come out of this short-term disruption stronger than ever. Here are some key imperatives that can carry you through these uncertain times.
Manage your cash and credit.
How much cash do you have on hand? How you could make it last for at least six months? And if you don’t have enough cash on hand, evaluate how you can cut expenses or increase sales by doing something different. You may be able to negotiate with your lenders, suppliers or landlords, letting them know you need some form of cooperation in order to survive. Contact your bank to see if there are any accommodations for your current loans.
Turbulent times are turbulent for both sides. This can give you leverage in many ways to negotiate terms and pricing. And when you do, write down the date, name of the person your spoke to and your agreement. Get it in writing when possible.
Review & revise your sales strategy.
Here is where you need to get very realistic and creative. The goal is not to hunker down and hide but to develop or brainstorm ways you could actually sell more of your products or services. How can you utilize online sales and/or delivery, curb-side pick-up? Challenge yourself and your staff to think differently and ratchet up your value proposition!
Think outside the box.
Remember when you started your business on a shoestring budget and you were crazy creative on using word of mouth, organic social media, and key networks to sell your product or service? It’s time to jump back into that mentality. Be more creative with respect to your marketing expenses and look for ways to use marketing tactics that don’t have a significant cost.
- Zero-in on Customer Success One of the benefits of an economic downturn is that it frees up some time and forces you to dig deep. Prioritize customer involvement, even if you’re only serving a few customers due to a slow down. Utilize free or low cost digital tools and ask questions that allow you to nail down the core of your product and build the next phases on strong foundations. By the time the downturn becomes an uptick, you’ll have a proven product or service ready for scale.
- Zero-in on Customer Retention Your immediate goal is to sustain business success. Because it is cheaper to keep a customer than acquire new ones, ensuring customer satisfaction is crucial to your short and long-term business success. Find ways to communicate and keep your name top of mind. This doesn’t necessarily mean promotional strategies, but by creating value in this chaotic time such as sharing tips for staying safe, humor, uplifting stories, etc. Become a beacon of hope in a dark time.
Control employee expenses.
As you examine your business, look at how you can control expenses related to employees. Can you temporarily reduce expenses delaying hiring any additional employees? Perhaps use freelancers or contractors to temporarily reduce work-load. Iowa Workforce Development has put special concessions in place to alleviate some of the unemployment burdens faced by small businesses.
Spend every dollar as if it were your last.
Adopt the concept that you need to protect the lifeblood of your business: cash. Whether it’s cash going out in the form of expenses or cash coming in from revenues, cash is king.
Economic downturns can be chaotic and uncertain. Know that you are not in this alone. Our community of business leaders, economic developers, and Chambers of Commerce are pulling together and collaborating on various ways we can be of support to North Iowa small businesses. The Pappajohn Entrepreneurial Center & SBDC is here to support you! While we are not currently meeting clients face-to-face, we are still seeing clients for business counseling via virtual methods (e.g. web conferencing, conference calls, etc.). We can work with you virtually on cash flows, financial analysis, and business strategies to help you survive and thrive. You have the energy and resolve needed to weather this storm! Together, we’ll get through this.
To set up an appointment, contact the Pappajohn Center at pappajohn@niacc.edu or 641-422-4111.
Additional Resources
SBA – Coronavirus (COVID-19): Small Business Guidance & Loan Resources
SBA Disaster Assistance in Response to the Coronavirus
Iowa Workforce Development Updates and Resources about COVID-19