Lately, there have been a lot of blogs about obtaining financial support to help your business survive the COVID-19 crisis. And while such advice can be helpful in the short term, it's like teaching someone how to tread water: It can prevent drowning, but it's not a long-term survival strategy.
I'm more interested in teaching you how to swim.
Focus on Your Why, not Your How
Business owners tend to get bogged down in the details of how they do what they do rather than why they do it. That can be an obstacle to progress even in the best of times. During the coronavirus pandemic, it can be disastrous.
You need to open your mind to a different approach — an "AHA moment," as we call it at Allan Hirsh Advisors. For example, I have a client who operates a retail outlet at a major airport. When the pandemic hit, she was forced to close her store for the time being.
At that point, she could have gone into mere survival mode and put all her energy into securing short-term financing. Her only real option in that scenario would have been to hang on until she could reopen. But with all the uncertainty about how long the pandemic will last, and how long it will be before air travel returns to its prior level, that strategy likely would have amounted to postponing the inevitable.
Instead, she took a different tack. Over the years, she'd built an email list of her customers so she could supplement her retail outlet with an e-commerce site. It had been just a small part of her overall business. After her retail outlet closed, however, she sent out an email blast to her entire customer base and doubled down on e-commerce.
And guess what? Her business is more profitable now than it ever was. She still plans to reopen her retail outlet at the airport, but its primary purpose will be to help bolster her email list.
My client realized the why of her business was to sell a certain product line to a particular type of customer. Initially, the how just happened to be through a retail outlet at the airport. When that no longer worked, she changed the how but not the why.
Finding Your Focus Takes Fresh Eyes
I can cite other examples of how businesses have gotten stronger because of changes brought on by the pandemic. One of my clients, a website developer, realized they don't need a 5,000-square-foot facility. They can operate just as effectively in 1,000 square feet of space and save 80% of their rent.
Other businesses have seen that meeting virtually can be more efficient than meeting face to face while eliminating the cost and inconvenience of traveling. You can even put my business into that category. Not only do online meetings save me a lot of driving time, but they have also expanded my range. I can now reach clients nationwide.
(As an aside, based on my experiences as a customer during this pandemic, I can also offer this observation to restaurants looking to improve their businesses: Pickup and delivery service works much better with an online ordering system rather than with telephone orders because it eliminates a step — one that often introduces errors.)
Make This an Exercise in Strengthening Your Core Business
While the COVID-19 outbreak has created a sense of urgency among business owners who are desperate to find a way forward, the lessons it has taught are really the same ones that consultants like me, and companies like Supporting Strategies, have been preaching all along. As a leader, one of the most important things you can do is devote as much time and energy as possible to your core business — your why.
Even leaders of successful companies need to be reminded of that from time to time. For example, I had a client who billed $300 an hour for the service he provided. But he also insisted on doing a lot of other, non-core functions himself, including about 10 hours a week on bookkeeping. He thought that doing as many jobs as possible himself was cost-effective — until I pointed out that he was essentially paying $300 an hour for every one of those non-core tasks that he was doing instead of billable work. At that point, he became a believer in delegating and outsourcing.
To put it another way: He had an AHA moment about the why of his business.
Lighting the Way
The COVID-19 pandemic has taken an enormous and tragic toll on our society and our economy. But it has also provided an opportunity to see your business in a newer, more focused light. Let it guide you.
Allan T. Hirsh III is the founder of Allan Hirsh Advisors (AHA), a mentoring, coaching and consulting service with extensive experience creating AHA moments in both the for-profit and nonprofit sectors. He is a certified WHY coach.
Topics: Chesapeake Region, MD
This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.
Supporting Strategies is not a CPA firm.