The COVID-19 pandemic is causing major shocks to our everyday lives. But are they just shocks or are things changing more permanently? That is a question our entrepreneurs will need to answer for themselves within the economic ecosystems in which they operate. This is not to be taken lightly as it could be the difference between life and death for their companies.
Entrepreneurs think about the way things will be in the future because of changes that are happening currently. Is that how you are thinking about this COVID-19 crisis as an entrepreneur?
The best and worst thing
The best and worst thing about being an entrepreneur is that you are the boss. No one is going to tell you exactly what to do. That is one of the main reasons people start their own businesses and, ironically, the reason that they close or sell a business.
Independence is difficult. There are more facts, figures, and statistics available at your fingertips than ever. This is information but not knowledge. Strong entrepreneurs know what information matters and how to synthesize it. They also know how to listen.
Collaboration is key
Listen to your ecosystem. Things are changing quickly, and one entrepreneur’s customer is often another entrepreneur’s supplier. Everyone in the supply chain is panicking in today’s world and things entrepreneurs once knew as facts have quickly changed and everyone is back to working with assumptions.
“Supplier X always delivers on time, so we can accept this customer purchase order” is now a riskier statement than it was a couple of months ago. “Company Y always orders 200 of these a month so start production” is now a dangerous statement if left unverified. Instead of making decisions based on assumptions, call your suppliers and call your customers. In times like these, they will tell you about their problems, and your entrepreneurial superpower of parsing out what information is important will be vital.
Do you see the problems described as temporary or enduring? Don’t forget that many people have been cooped up in their homes for days or weeks. Give them an outlet and call.
The breadth of your suppliers should not be overlooked. Talk to the key suppliers for your company. Landlords or mortgage holders for property or buildings, bankers for loans, employees who are delivering your services or the manufacturers who are delivering your raw goods are people after all. See what they have to say.
On the other side, your largest customers are probably going through their own challenges. What are their biggest problems? If you help them out, you’ve forged a strong relationship with the king, the customer. Contingency planning with multiple scenarios is a way to talk through what may happen with your upstream and downstream partners in the supply chain. Be collaborative and your whole ecosystem will benefit.
Cashflow is the lifeblood
Conventional wisdom holds that gaining a new customer is 10x more difficult than keeping a current one. No matter what happens, if you run out of cash, you’re finished. The same is true of your suppliers. If you are in a situation where your cashflow is grinding to a halt, let your suppliers know and attempt to renegotiate your terms. Losing a customer is a problem most businesses will be looking to avoid as uncertainty grows in our economy.
Change is happening. There may be temporary resources available from government entities to keep your business going in the short term, but never lose sight of your customer’s desires. The customer is, and always will be, king.
This blog post was inspired and informed by a podcast that can be found here and many conversations I’ve had with local Gunnison County businesses in the last two weeks.