The COVID-19 Business Game Plan Part II
PHOTO BY OLEG MAGNI FROM PEXELS
In part one of this series on best practices for dealing with the current world pandemic, I outlined some of the possible impacts we will see as shelter in place is a mandate across most of the United States.
In Part II, I am going to discuss things you should be doing right now to strengthen your business and position yourself to take advantage of opportunities that will come once your doors can be open again.
The most important message I’d like to share with everyone is to stay positive and have a plan. Keep calm and use all the resources you have available to make the most of what you have.
The first step is the most painful. It goes without saying that lost revenue demands cutbacks. And this should be done across the board: employees, overhead, and all possible expenses. It’s key at this time to conserve every single penny of available cash.
Because at the end of the day, when you’re out of cash; you’re out of business. It’s as simple as that. It will not matter how much inventory you have or how many receivables. When you can’t pay your bills, you are done.
You should have already tried to collect as much as you can from current customers, even if it’s at a loss. One inducement might be to offer a discount, perhaps as high as 20%, simply to build your cash reserves as much as you can.
Once this is done, any profits should immediately be deposited at your bank in a newly created “vault” account. If you managed to get any money from the Paycheck Protection Program (PPP), which ran out of the allotted $349 billion Thursday, April 15, or Economic Injury Disaster Loan (EIDL), which also out of the $10 billion it had to spend, it should go into this account. Money deposited into the vault account does not come out until you absolutely need it.
If you didn’t get any money, prepare now in case the pot is refilled. Gather documents, get in touch with your accountant and check in with your local bank so you can get in line.
In the meantime, focus on cost cutting, realignment, and bidding on profitable work. Some companies have temporarily cut salaries by as much as 50%. However, if someone can get more than 50% on unemployment, I'd let them go on unemployment. They should go with whichever is higher.
Businesses that are already set up with a web store have an advantage, because they can take funds directly. One of the continuing big shifts in business, which I've been advocating for the past 10 years, is that decorators need to collect 100% of their payment upfront. Companies already doing this are in a stronger position right now than those who have not.
An effective strategy employed by some decorators has been to implement a “#Here For Good” campaign. This is a program that has allowed printers to keep some money coming in while helping businesses in their local communities. But it does require e-commerce capabilities.
The shop creates a design for a local business for free and uploads it to a dedicated web store for that company. The local business promotes that they have logoed shirts for sale to anyone who’d like to support them during COVID-19. Typically shirts are sold for $20. The decorator keeps $10, and the other half goes to the customer’s business.
See Online Fundraising Stores: Creating a Positive Impact and Can T-Shirt Sales Save America’s Restaurants.
Why this strategy works is because now is not the time to try and sell. What you should be doing is building reciprocity currency. That means reaching out to your customers and asking them how you can help. The goal is to create goodwill, get your name out there and be perceived as supportive without taking anything.
I recommend contacting customers by phone--either voice or text--and asking them directly “How can I help you?” Do not use social media or email, because people are being inundated in those places. And it doesn’t have to be apparel decorating. Showing empathy and not trying to sell your services is critical.
Shops also should be offering face masks, either blank or decorated. With many of our industry manufacturers switching from T-shirt production to personal protective gear, masks are becoming available and are an item customers want and need.
Another way you can help, if you have wide-format printing equipment, is to offer to do signage and banners for businesses. Yard signs and posters posted outside the building allow a business to announce that they have reduced hours, curbside pickup, or are available by appointment.
You might also consider offering buttons with pertinent messages such as “Stay 6 feet away,” “Going Nowhere,” “I finished Netflix today,” and “Stop COVID-19.”
If you laid off employees, start thinking now about who are the best people to bring back. There's going to be a specific methodology for bringing them back, and unfortunately, you may not be able to bring them all back. Prioritize who you'll bring back and in what order.
For decorators who survive, the opportunities coming out of this are going to be greater than I've ever seen. There will be a leveling off of the field, and entrepreneurs will be able to redefine the markets they are working in. It’s going to be a whole new game with a different set of rules, and you'll remaking the world in a new way.