10 — Offer Remote Services
Consider what kind of remote services you might offer your clients. This might be especially applicable for B2B companies.
11 — Call Key Clients
Call your key clients — the ones you have solid relationships with .
This serves two purposes:
- you’re calling to see how they’re doing and demonstrating that you actually care, which can only serve to strengthen your relationships
- you can determine if there are any struggles they’re having that your your company assist with — assistance that they might be willing to pay a small fee for.
12 — Review Your Marketing Spend
In this current climate, it’s easy for a lot of your marketing dollars to be flushed down a black hole. Turn off underperforming or non-essential ads (note: observe how your marketing performed during the period March 9 to March 20 — this is when reality set in for most businesses in the west).
At the same time, it’s worth noting that you might be able to buy advertising and marketing services at distressed rates — which is fine as long as the short-term value as opposed to the conventional lifetime value, beats the cost of acquisition.
13 — Offer Gift Certificates
If applicable, offer gift certificates whereby loyal customers can continue to support your business for products or services they are likely to use in the future but now now. This helps you to bring forward some future income.
While this is something that seems to be more applicable to brick and mortar businesses like restaurants, it might be something worth considering in other types of businesses — especially if those gift certificates offer the ability to lock in products at a discount.
14 — Renegotiate Interest Rates
Central banks around the world are dropping interest rates — in many cases to zero — so if you have business loans — or personal loans for that matter — get on the phone and renegotiate your loans.
15 — Collect Outstanding Debts
Review your outstanding and overdue debts, and get on the phone, send those emails and do what you can to get paid as soon as possible. Having said that, you’ll want to be diligent about how you do this as not burn any bridges or compromise any relationships — we’re all doing it tough and that includes your clients.
16 — Consider Selling Investments
If your company has invested spare capital into stocks, bonds, property or commodities, consider the risk of the underlying assets defaulting.
If there’s a good risk of default, you might be better off locking in your losses than walking away with nothing.
17 — Consider Buying Investments
If you have more than 24 months runway then explore the merits of investing in seriously distressed stocks, bonds, real estate or commodities, perhaps via a diversified index fund, in order to lock in a significant capital gain during the recovery. If you purchase a stock that has fallen 50%, and it makes a full recovery in 24 months, then you have effectively doubled your money — it would seem to be a great time to buy if you have money.
This might also be a great time — if you have the capital — to buy competitors, or complementary companies that can give you access to resources or relevant eyeballs that will help you to increase your company’s revenue once this whole thing blows over, or even in the near term.
Caution: Nobody knows where the ‘bottom’ is and just how bad this thing will be, so it is possible that companies with typically sound fundamentals could go bust. There are no guarantees in life, and COVID-19 reminds us that black swan events do happen and they serve to challenge our entire world view. However, it is almost certain that the current bottom is not tomorrow’s top, and that markets will, over the long-term at least, make a full recovery.
Note: I am not a financial advisor and this does not constitute financial advice. You should consider seeking independent legal, financial, taxation or other advice before making investment decisions.
18 — Introduce Paycuts and Defer Bonuses
It’s a time for fiscal frugality, and with so many people losing their jobs in the current environment — unemployment is projected to hit 20% in the US — a temporary pay-cut to the order of about 20–30% is preferable to losing your job altogether.
While never an easy conversation, your staff are are unlikely to be spending as much money as they normally do and will likely be presented with other Government concessions and handouts themselves, so it’s a matter of mutual sacrifices for the greater good.
The counterfactual might be that your company runs out of cash and your staff end up jobless anyway in a market characterised by hiring freezes — I’d rather take a paycut.
How paycuts extend your runway:
- 20% cut in total payroll extends a 12 month payroll runway by 10 weeks
- 30% cut in total payroll extends 12 month payroll runway by 4 months
19 — Scale Back on Perks and Fringe Benefits
You might also want to look at other perks or fringe benefits that you’re offering employees — scale back or temporarily eliminate those that are non-essential and definitely not need-to-haves in the current climate.
20 — Offer Redundancies
Price’s Law suggests that the square root of a company’s headcount creates half of the value, so if you’re a team of 20, then about 5 people would create half of the value. As such, there might, sadly, some tough decisions to make by way of letting less essential people go.
If you can manage it and only if you can manage it, offer them some kind of lifeline or redundancy package on their way out — do the maths to make sure this is preferably to keeping them on the books for the next six months, and ensure you have enough liquidity in place to keep rolling.
Personally, I’d rather not let people go in the current climate. It’s a matter of what you want to optimise for — the health, wellbeing and survival of your people, or your company making money. I’m not saying there’s a right or wrong here but this is question many entrepreneurs will need to answer.
21 — Offer More Attractive Terms to Investors
If you’re a startup that’s staring down the barrel of a 6-month runway, you might want to offer potential investors — be they angels or venture capitalists who have the capital to invest in the current environment — more attractive terms.
It could be a convertible note with a larger discount, or a lower valuation. Whatever the case, make sure it’s something that’s not debilitating and that it serves to do more good than harm to the company in the long-term.
22— Scale Back on Office Space
COVID-19 has sparked a remote working revolution of sorts that might last long beyond the end of the crisis. At least for the next few months, it’s likely that you won’t need as much office space as you’re paying for.
Renegotiate rent or scale back on office space if you can. Companies based in coworking spaces on month-to-month contracts have a lot of flexibility in this area.
23 — Inspire Confidence in Your Team
While it’s easy to immerse ourselves in nothing but COVID-19 news and tweets, and become incredibly depressed in the process, and project a sense of doom and gloom to your team, you’ll want to inspire confidence to ensure that they are motivated to keep doing their part to keep the company on its feet.
Leaders earn their stripes in times of adversity, so it’s time to earn yours.