Like many company leaders, due to government lock-downs, I’ve been forced into a change of scenery. Over the next few weeks, I’ll share some ideas and experiences from my background in business. We’re all in this together, I hope my ideas are useful to you in some way.
“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
- Bill Gates
You've been here before
If you were starting your business today, you would have costs but no revenue. You would expect to run at a loss. Staff would work on activities that create future revenue, developing services and making products that can be sold. It’s normal for a new business to run at a loss for a time while it builds its offering.
For a mature business, having costs suddenly outstrip revenue can be a shock. After having been profitable, it can be hard to return to the mindset of “building a business”. You did that when you started the business, can you do it again now?
If you’ve suddenly got too many staff due to a loss of revenue, you may be able to redeploy them to projects that will jump-start the business? Sometimes it is necessary to lay off team members; but this shouldn’t be the default course of action.
If you need to downsize, do it now
Businesses that do need to shed staff, usually do it too late. Most businesses that lay off staff do so within the last quarter of a recession. By then, they have bled all their cash, missed opportunities and suffered a drop in morale. To put a nail in their own coffin, they then go and lay off their experienced people right before things start to pick up. If you absolutely must shed staff, do so now.
But don’t be too hasty. If you’ve been through a couple of business cycles, you will know how long it takes a new team member to become productive. Months, or even years. If you’re thinking holistically about your business, you might be able to redeploy people into new areas of opportunity or tasked with their own cost-reduction project.
What if you were starting out again?
Think about what your business looked like when it was a start-up, and see if you can redeploy staff to meet the needs of your new, emerging company. Here are some ideas:
- Optimize administration by moving to automated invoicing, accounting and debt collection. You can task an idle staff member with this project.
- Call existing customers to see if they need any help. They are more likely to answer your call when they’re working from home.
- Look through old databases of contacts and see if you can make a marketing list of new prospects.
- Start a new project. Could an Idle staff member begin building a new project for you? I started two successful businesses that way.
- Look for internal efficiency. Clean out your CRM, tidy databases and get internal systems working efficiently so that you are ready to move when things pick up.
Your team have been your biggest investment. You have invested time, resources and money in them well over and above their salary. Don’t give that investment to your competitor by letting that person go. Hang on to them and they will reward you by growing your business on the other side.
Next time, I’m going to talk about how you can use your lock-down time wisely.
Kia mau, kia ū, otirā, kia haumaru (Hold fast, stay strong, furthermore be safe). Peter Thomas, Director, Comet Backup
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