These are screwed up times. For everyone. A few monhts ago my small business was on pace to have a record sales year. Today, I’m happy we still have a business.
Here is what I’m thinking to get through this.
1. This is going to take longer that any of us want
When state lockdowns first started rolling out, I assumed the disruption would last a few weeks. Then a few months. Then through the summer. Now my planning is based on “normal-ish” starting July 2021. My hope is that we can develop a vaccine. Or treatments so CoVid becomes something that is manageable but not a death sentence. Either way we need something to change everyone’s risk calculation.
2. Start Developing an Opportunity Mindset
Here is the number one piece of advice I’m sharing with other small business owners:
If you ran a good business before Covid (BCV), you need to find a way to survive this. If business wasn’t great BCV then consider cutting the cord.
Anger and fear are everywhere right now. Rightly so. For a few weeks I was angry. Many of us were closing businesses, firing staff and applying for loans. There’s no joy to be found in any of that.
But I also know that I don’t make very good decisions when I’m emotional.
The business landscape is changing and new opportunities are developing. Stay pissed and you will miss those opportunities.
So, I’ve been trying to develop an opportunity mindset. One that helps me choose to work on positive activities.
If you ran a good business BCV you should be able to do it post Covid. In fact, now might be a great time to plan expansion.
For those who were barely making it before this, now may be a good time to close. I realize this is not an easy decision. Seven years ago, I closed a business and lost a lot of money. For months afterwards, the decision bothered me. But it was the right call because it allowed me to focus on other opportunities which were successful. The sooner you can move on from a situation that isn’t working the sooner you can start working on one that will.
3. Profits matter
When the pandemic hit and we could see that this was going to have a major impact on our businesses, my wife asked me how stressed I was. On a scale of 1 to 10 I felt a relatively low 3. The reason was simple. Both personally and professionally we saved money.
Financially speaking, the past several years have been good for our businesses. Profits reached all time highs. This helped us pay for a big remodel, reward our staff with awesome bonuses AND we saved money. This nest egg, is buying me peace of mind and will help us survive. We are very fortunate.
My hope is that Covid teaches us to develop a new narrative around business profits. And how we manage them. All too often I hear people talk about profits in the context of greed. Or, if you’re in the restaurant industry, resigned defeat.
“It’s the restaurant business, you don’t make money.”
Just a few weeks before Covid hit I was in a meeting discussing the 2019 financials for one of our locations. Sales were great, but the profit margin was barely 4%, which is awful considering how hard we work. “We pay our people really well” was the rationale I was told. That’s great! But we still need to make a healthy profit if we want to run a healthy business. As one of my heroes, Maggie Bayless (co-Managing Partner of Zigtrain) told me many years ago, “Profits are the lifeblood of a business.”
When Covid ends, one of my goals is to help all of our locations to achieve greater financial success. Not at the expense of our people or by sacrificing quality, but by running a better business. If you are getting your business back on its feet or starting completely over, I encourage you to do the same. Because profits matter.
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- The one thing business owners can do to change their lives forever.
- 80% Busy: Part 2
- This is How you Own a Restaurant