I am an avid fisherman and outdoorsmen. If it involves being in the woods or on the water, I am ready to go. As a fisherman, I learned very early on that different fish, waters, and even locales require different approaches. What works for bass fishing in East Tennessee doesn’t necessarily work when I’m fishing for trout in Montana. Depending on my goal, I need to change and adjust my tactics. The same is true in business. Sometimes, we need to change our approach in order to find success. In today’s business climate, more and more business owners are discovering that what worked before the closures may not work when they reopen their businesses. Recently, we discussed how turnaround management can help small business owners to form a new approach. Today, I’d like to dig a little deeper with 10 keys to getting off on the right foot when reopening your business.
With so many business owners considering how (and when) they can reopen their businesses, we realize that this is uncharted territory for many of them. Even the most seasoned veterans may have never needed to utilize turnaround management. It is for this very reason that I want to provide some educational and informational resources for business owners to review.
Understanding the how’s and why’s can be an invaluable tool when we’re forced into brand new pursuits. Typically, turnaround management is used when a business is in dire straits and MUST rebrand itself in order to survive. For many of today’s businesses, this is the case. However, I want you to put aside any negative connotations you might have surrounding a turnaround.
The truth is, we’re all in the same boat. None of us has ever attempted to run a business in a crisis like COVID-19.
Therefore, needing to use a turnaround strategy isn’t an indictment of you as a business owner. In fact, being proactive about this approach shows savvy. So without further ado, let’s take a look at 10 keys for a proactive turnaround!
If you’re anything like I am, nothing gets done if you don’t first, write it down. I don’t make a trip to the grocery store without a written list, much less plan the course of my business. Written plans are valuable in multiple ways. Having fully developed and written plans in place can increase the value of your business. In addition, they can aid you in the direction of your company. Perhaps even more importantly, they can communicate a sense of confidence and control to your team, your vendors, and your investors.
Having a well thought out and written business plan enables you to accurately and confidently inform anyone who needs to know, exactly what the company’s future direction looks like. The benefit of this is that your team, your investors, and even your vendors are able to see where they fit into the plan. This fosters buy-in and opens lines of communication for them to make suggestions.
Folks, I can’t emphasize enough, the importance of having a written business plan. Too many times, I meet with clients who don’t have a written business plan and don’t understand the value that it brings to the table. According to a Dominican University study, not only are you more likely to accomplish goals that are in writing, but you can actually see where your business was and where it is heading.
The next step is to gather your team for a meeting. This is a time for open discussion about the state of the company and the best strategies to move forward. Although you want to hear everyone’s input, it is important that you have a plan in place when you meet with your team. Doing so can help instill confidence in your leadership. In addition to your key team members, it is a good idea to include your advisors in this meeting.
Your financial planners, attornies, CPA, business advisors, and even your banker all deserve a seat at the table during this meeting. These are the people who are going to help you to implement your plans and they probably have some pretty good advice to give as well. The purpose of this meeting is to present your plan and allow your support team to point out problems. Allowing them to poke holes in your plan can only make it stronger!
Now that you’ve discussed your plans with your team and your advisors, it’s time to take their thoughts into consideration. You’ve surrounded yourself with some pretty intelligent people and their wisdom is an asset to you and your business. Use it! Taking the advice of your advisors and your team, revise your plans. Remove the weaknesses and enhance the strengths before presenting them to your employees and your board of directors.
By this time, you should have a solid plan for your turnaround. You’ve identified the weak points and developed a strategy to repair them. Now’s the time to gather the troops, so to speak. Call a meeting with your entire staff. This meeting is your opportunity to be honest with them about the state of your business and how you plan to fix it moving forward. Present the relevant aspects of your business plan and ask for their input. If you’ve been in business for a while, this will demonstrate careful consideration for the development of your business.
Although your employees are the biggest asset to your company, your customers and clients are the lifeblood. Without them, you would have nobody to provide your products or services to. With that understanding, it is important to meet with them to discuss how changes to your company might affect them. More importantly, you need to provide them with context and clarity. Rumors have a way of getting around and spiraling out of control. As business owners, we have a responsibility to set the record straight and reassure our clientele. After all, our focus is on serving our customers!
Just like your employees and your customers, vendors rely on you for certain things. Like you, your vendors have employees to care for, and hearing rumors that they’re about to lose an account because of closure can be stressful. However, there’s an even bigger reason to keep your vendors in the loop about your business plan: You need their products and services to continue supplying the demand of your own clients! Honesty and proactivity are your best tools when detailing your company’s future plans with your vendors. The sooner you can fill them in, the better.
I’ve often said that taxation is the biggest robber of our wealth. Improper filing can cripple a business. Understanding how tax laws work can be one of the most valuable weapons a business owner has. This is exactly why you need a great advisory team. With that said, if you find yourself in a position where you’re unable to pay your local, county, state, or federal taxes, you need to reach out to the proper authorities.
Many times, tax authorities are willing to work with business owners and they are much more inclined to do so if you’re open and honest with them upfront. If you simply try to avoid an uncomfortable conversation, it’s going to appear as though you’re attempting to avoid taking care of your obligation. Don’t waste any time. Call your tax authority and communicate your situation with them! Usually, this makes for a much more pleasant tax experience.
Speaking with debtors about money problems can be uncomfortable. However, putting the conversation off only leads to greater problems. If you have outstanding loans or lines of credit with your bank, call them — don’t email — and schedule a face-to-face meeting as soon as possible. Tell them what is going on with your business and outline your plan to fix the issue. You’ll probably be surprised at how much they will work with you. It is in the bank’s interest for you to succeed. As you grow, so do they!
One of the unique situations that have come from the COVID-19 closure is the ability to restructure your team by how they would fit your company moving forward. You may have certain employees who were great for your pre-coronavirus business model but just no longer fit the direction of your company. This could be due to cultural changes or even the closure of a certain department.
Whatever the reason may be, it is vital that you only bring back the employees that are vital to your business’ future successes. While this is a difficult task, it may be necessary for the survival of your business. If you can rehire them later, that’s excellent but if you have to let some of your staff go, make your first cut deep! You don’t want there to be any doubt about the rest of the team’s status. Attempting to make layoffs in rounds is mental and emotional torture that puts everybody on edge, wondering if they’re next.
The last of the 10 keys for a business reopen is to take a good hard look at ALL of your expenses and cut out anything that is not absolutely essential. Make a written list — here I go with putting it in writing again — and go through it line-by-line. If it’s a “nice to have” but not needed line item, cut it out! The entire point of this exercise is to shed any dead weight and buy yourself as much time as possible. Once you’ve completed your turnaround and stabilized your business, then you can start thinking about some of the bells and whistles that you enjoy. In the meantime, you are working to save the life of your company and you should go through each of these steps with that mindset.
Folks, these are trying and difficult times. However, I’ve said it before and I am saying it again, I’ll bet on the entrepreneur every time! You’ve stayed up at night and worked long past “quitting” time throughout your career just to make sure that your business was successful. It’s that same ambitious determination that can drive our businesses to thrive once again.
I know life is hard and it can be frustrating but life is good. With the right written plans, your business has a great chance of getting off on the right foot and potentially becoming stronger than before!
How has your own advisory team done during the COVID-19 crisis? If you don’t have an advisory team or you’re just unsatisfied with the one you currently have, contact us! Our team is here to help.