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I need a quick break from the madness, don’t you?

I wanted to highlight a small business in our circle that has taken this opportunity to think outside the box. They have brought smiles to faces while adding a helpful new stream of revenue during this time!

Elizabeth Ging, the owner of Sift+Pour Bakery in Dallas, makes custom cookies and treats. She started playing around with the idea of everyone buying up all of the toilet paper in stores. Elizabeth drew toilet paper on a cookie and said: “There is no shortage here!”

coronavirus business success story toilet paper masks cookies

As the news evolved of potential shutdowns and a decrease in foot traffic, Elizabeth realized it was her job to find ways to bring her product to her customers. She has created “The Social Distancing Survival Kit” and a Rice Krispy Treat Decorating Kit!

Check them out at siftandpour.com.

Kudos to Elizabeth and Sift+Pour for taking steps to be Disaster Proof!

If you have a story of a small business doing something fun, novel, or just extra caring that is helping make them Disaster Proof, I’d love to hear about it. #DisasterProof. #TASC

In these incredibly uncertain times, I’m fielding a lot of calls from current and past clients about what they can do to manage the current state of their businesses and hopefully emerge on the other side battered, but still in business and ready to ride the good times upwards. You are not alone!

The problem with a situation like the one we’re facing now is that no one knows when it will get better. It could be next month, it could be next year, it could be a lot longer than that. In the past few weeks, business has slowed in most professional industries. Most companies have gone into a holding pattern as they try to react to what’s going to happen next.

Please do not react, be proactive instead.

If you haven’t read it yet, check out our previous post about how businesses can responsibly and ethically use a situation like the one we’re facing to grow their business.

In this post, I’m going to look at how you can prepare your business for the worst without destroying your team or your business.

Expand Your Customer Base

Now is a great time to look at other avenues that your business can expand to. Some people call this diversifying your revenue.

“If any single buyer represents more than 10% of your business — or your top five clients together account for more than 25% — you need to diversify,” according to Forbes.

Think of this as putting all your eggs in one basket. If you drop that basket, the eggs break. By the same token, if a company that represents 10% of your revenue goes bankrupt, what’s going to happen to your business?

Look for ways to create relationships with new clients. Is there a service that you can offer that will help businesses or people feel safer during these uncertain times? Is there another market that your services can enter into at this time? Is there another use for your services in an industry that is impacted at this time? Once you have revenue, you have choices.

For example, if you normally deliver flowers but your business is at a standstill, can you use those same delivery trucks and drivers to deliver something else? Can you offer your services to a local supermarket? Can you start package delivery for Amazon? You already have the infrastructure set up, can you fill an emergency need and expand your customer base?

Automate

There are hundreds of apps out there to manage workflow within the office, keep track of your social media accounts, and manage your daily calendar.

If you haven’t already, set up some of these apps.

Automation of common tasks within the office will help manage employee time and make your business move faster. A program like Zapier, for example, will help you integrate various software systems within your office.

When you use it, you can set it up to take an order from a customer on your website, create an invoice in QuickBooks, and then send that invoice to your customer through MailChimp all without lifting a finger. Suddenly, a sale is made without a person getting involved. It’s all automated.

When done correctly, automation frees up your employees to focus on what truly matters within your business—serving your current customers and growing your customer base.

Look at every line, not just the bottom line

During good times, it’s easy to look at the bottom line and think if your net profit keeps growing, then the business is doing well. But while you’re watching that bottom line, the number of line items above it could be growing.

Now is the time to stop and take a look at everything your company is spending money on and what percentage of the revenue that spending represents. You need to ask yourself, is this cost essential to the business or is it discretionary?

Note: You should be looking at your spending two to three times a year whether or not the economy is doing well, but at this time, it’s a must-do.

Essential expenses such as salary, taxes, utilities, etc. are expenses that are necessary to run your business. But are there any ways to cut this down temporarily? Or even permanently with technology?

Discretionary expenses such as travel, food allowance, video production, and advertising are expenses can be cut down or cut out if necessary. They are more wants than needs.

Keep that discretionary spending under control. Ask yourself, can this expense be reduced? If it can, then will that reduction hurt the business or the growth of the business? Weigh all of these factors and then decide if cuts can be made.

Odds are, you’ll find one or two cuts that can be made without hurting your business or your business’s growth. You’ll also be able to identify cuts that can be made in the future if revenue streams slow down.

Manage your debt

Once those cuts are made, put that money to good use. Spilt it between paying down your company’s debt and socking the money away.

You do not have to pay down your debt all at once. Some debt is considered healthy for a business and in tough times, it’s important to find a balance between debt and a nest egg. If you’re uncertain, talk to your financial adviser or accountant. Interest that you pay on business debt is usually tax deductible and your tax CPA can advise you on that.

You also need to remember that some debt is worse than others. If you’re feeling uncertain about what debt is “good debt” and what debt is “bad debt” ask us. Every business is different and you always want to make sure you get professional advice for your specific situation.

Keep an eye on what the government is doing

Federal, state, and local governments are all working to make sure that local businesses and workers are not completely flattened by this sudden stoppage. On Wednesday night, President Trump signed the Families First Coronavirus Response Act into law. Among other things, the law creates rules for small and midsized businesses to offer paid sick leave and family leave to employees forced to stay home because of the coronavirus. NBC in Washington has a good Q&A about what the bill means for employees and Inc.com looks at some of the key provisions of the bill as they affect businesses.

States like California are also taking extra steps to try and make things easier for businesses and individuals. California’s Franchise Tax Board has extended the filing and payment deadline to July 15 without penalty. While in Illinois, the Governor’s Office is working to secure federal grants from the Small Business Administration to try and offer relief to small businesses. The SBA is (and has for a long time) had special disaster relief loans which are being strengthened specifically for this time period.

Cities and counties are doing what they can. In the City of San Jose, where Towne Advisory is based, city officials have set up a specific webpage to help small businesses navigate these difficult times and get help when possible.

Keeping an eye on what your local, state, and federal governments are doing will be an important step to making sure your business gets the best help possible.

Please stay safe and healthy.

Ben Towne

No one wants to see something like the recent outbreak of the novel coronavirus make headlines around the world, but it happens. It’s undeniable that the worldwide spread of the novel coronavirus has had an impact not just on our everyday lives, but in the way that we do business. World markets have felt the impact as well as supply chains and to a lesser extent, consumers. And with the full impact of the virus still unknown, the economic impact could get worse before it gets better.

Now businesses can react to this impact in a few ways. Some businesses will conduct business as usual, operating as if the novel coronavirus will have little to no impact on what they do and how they operate. Other businesses will plan for the worst and lose sight of what they’re doing in the present.

And some businesses will see the novel coronavirus as the unfortunate business roadblock that it is. It’s something that exists whether we like it or not and we can either run from it or find a moral and ethical way to make sure our business comes out on the other side of it stronger.

Never take advantage of the customer

Before I get into the ways a business can overcome novel coronavirus and come out the other side stronger, I want to make sure people understand what I’m talking about. In no way, shape or form am I suggesting that a business take advantage of the consumer. Price gouging, also called profiteering, is not only bad karma but it can be illegal.

If you own a company that makes hand sanitizer, by all means, advertise but don’t price gouge.

No matter what you do as a business, remember that human decency should always come first.

Do satisfy a new, temporary need

However, your business can still use a world issue like the novel coronavirus to its advantage. Ruth Fisher, economist and CEO of Quantaa says, “During pandemics and other such crises, people avoid crowds and public spaces. A company can commercialize on this by tailoring products or services to this situation: enable people to access or use the product or service at home or in a venue that’s physically separated from others.”

A great example of this is Netflix. As the New York Post reports, while the S&P 500 lost points in the final week of February, Netflix’s stock rose. Netflix is a company that’s specifically set up for people who want to seclude or quarantine themselves. “Social distancing” as a business model.

Think of this in terms of yourself. What would you do if you were stuck inside all day, whether it’s just for one day or a series of days? There’s a reason why companies like Amazon, Zoom Video, and Netflix as well as work applications like Slack are gaining so much attention during this outbreak.

Sometimes a temporary method becomes permanent

The spread of the novel coronavirus could be the opportunity a company needs to infiltrate a saturated market.

“When the pandemic subsides, a lot of people will have found that the stopgap (temporary) product/service fills their more general needs, and thus adopt that measure permanently,” says Fisher.

In particular, Fisher sees the novel coronavirus as having the potential to speed up current trends in home delivery of products and services, as well as employees working from home.

Company goodwill

Sometimes your company is not in a position to fill a commercial need during a pandemic or crisis. That does not mean that you should pretend that the crisis does not apply to you.

“A company can earn reputational benefits or goodwill by putting the needs of its employees or the community ahead of its own,” says Fisher. “This will increase loyalty of employees or community. For there to be real value (and not just empty virtue signaling), however, the act must be costly to the company.”

Johnson & Johnson, for example, is a leader in the health industry. To date, the company has donated 1 million surgical masks to impacted areas of China, 48,000 bottles of alcohol, as well as money and other supplies necessary for battling the outbreak in China.

Companies like Facebook and Google, who don’t have the healthcare inventory that Johnson & Johnson does, can use its buying power to build company goodwill. According to CNBC, Google will donate $1 million to Mountain View organizations to support small businesses after the company canceled its annual Google I/O conference. Facebook is donating $500,000 in San Jose after canceling two of its conferences in the city. Both companies are also donating millions of dollars in free advertising to help the World Health Organization (WHO) battle misinformation on the internet.

As these actions show, goodwill doesn’t have to be a concept thrown around by valuation professionals, it can be real positive karma that your company builds by the actions it takes in the world.