The past couple of months have left small businesses in a sea of uncertainty. As the pandemic continues to have major economic impacts and we try to anticipate our new normal, businesses are looking for the steps they should take to course correct in a time of crisis.
From how to manage capital to communication best practices, there are several lessons that can be learned from past crises and financial downturns that can help small businesses, even if today’s situation is unprecedented. Personally, I’m reminded every day of when my co-founders and I started building WooThemes and WooCommerce back in 2007. Shortly, thereafter, we hit the 2008 financial crisis. We learned a tremendous amount on how to create and sell products, and build a customer base, while simultaneously struggling to weather the storm. Our focus on financial discipline and building brand loyalty that drives repeat business are areas that small businesses can focus on today and use to set themselves up to thrive in the future.
Know your numbers, reduce all unnecessary costs
To start, do an audit of your business. It’s important to understand what hits you can take and what would impact operations to the point of no return. Get truly familiar with your current financial situation and your numbers. You need to know the health of your business today to determine what you need to address or change as you navigate the coming months.
Increase the cadence in which you are monitoring your finances. A weekly review allows you to spot changing trends and address them proactively and quickly. In addition, it’s critical that you model different scenarios to better anticipate and prevent various drops in revenue. If your revenue drops by 10%, 20% or 50%, what does it mean for your business?
Finally, once you have a good understanding of your finances, cut out the extra expenses that won’t help you make more money now. All businesses incur a few luxury expenses that make our work slightly easier, but these are also the expenses it makes sense to cut during tough times. For example, do a full audit of your online subscriptions and apps and cut what’s not being used as much as it should and what’s not bringing you value that outweighs the investment. In addition, don’t start new exploratory initiatives such R&D on a new product line or an upcoming store opening. New initiatives that require significant investment are high risk when you can’t immediately anticipate a fruitful result.
Take a people-first approach to external communications
So long as you are taking the right tone, your marketing does not need to come to a complete standstill. To make sure you’re striking the right tone, change your communication from sales-driven to people-driven. That means pausing campaigns that are too salesy to avoid risking coming across as insensitive, and instead relying on honesty and transparency to inform your brand voice. At a time where things are so uncertain, customers will feel relieved to see a brand that manages expectations, shares honest and pertinent updates, and shows that we’re all in this together.
It is also important to conduct a full review of existing marketing automations. Automated marketing is generally accompanied by a “set-and-forget” mindset, which means we don’t necessarily look at the things we set up weeks ago that might not align with the landscape today. Make sure all marketing material is adjusted in both tone and cadence to fit current pandemic expectations. Marketing in a crisis will cause for a more agile approach, with constant adjustments to align with changing customer sentiment.
During uncertain times, business leaders have an added layer of responsibility to all relevant stakeholders – from keeping the lights on and ensuring jobs to providing unwavering and honest customer experience. As an entrepreneur myself, I recognize this isn’t easy. But by taking these steps, you’re heading in the right direction to weather today’s storm for a brighter tomorrow.
Adii Pienaar, VP, Commerce Product Strategy at CM Commerce, cm-commerce.com