Consumer confidence isn’t very high right now. That’s not a surprise, and we all know why it’s happening. While optimism did have a comeback earlier in the summer, as COVID-19 cases spike due to the re-openings, the numbers are tanking again.
But with two thirds of the U.S. economy riding on consumer spending, answering what to do about it is becoming increasingly critical. What are the things that you need to do to help your enterprise survive these times, and even have the possibility to thrive? What tools do you need to deploy to see the bigger picture and make the right decisions for you and your future?
Winning back your customers
Paying attention to safety is a quick win. Unlike in 2008, this isn’t a crisis spawned by economic oversight. This pandemic is all about public health. Our health is what we are afraid of and addressing it will likely win back the faith of your customers.
Don’t bother looking for pity. Consumers are callous to the struggles of a business. They have their own problems and couldn’t care less about yours. If you want their attention, stand up and earn it.
These are trying times, but that doesn’t mean that they are devoid of opportunity. Finding new and novel ways to serve the needs of your customers can not only keep you afloat, but help you grow.
Automation is coming and the number of ways that you can use it to give your customers what they want faster and more efficiently multiplies daily. Now could also be a great time to humanize yourself and get in touch with your customers. We are social animals and having meaningful connections with one another is always important to us.
Right now, when connection is in short supply, the human factor could be what you need. If you can find a way to make your customers feel heard, cared for, and foster a connection all while staying at least six feet from them, that skill will serve you well through this pandemic and beyond.
Evaluating where you are
Now is an ideal time to step back and reevaluate your business and how it runs. With the knowledge that it is going to take some time before the economy gets back to anywhere near normal, there is no time to waste in taking a look under the hood and ensuring that all the parts are running smoothly.
Slashing unnecessary spending is a natural first step. If a department isn’t generating revenue, then it better have a solid justification for being there. Infrastructure needs to be solid, but not excessive.
Optimize everything you can. We love to make things more complicated than they need to be and constantly subscribe the mantra of ‘good enough.’ Humans value heuristics and will labor to find something that works, but we rarely go the extra mile to be sure that the solution is effective.
Once we establish a process, we then go to work digging in to make sure things don’t change. We favor short term solutions that patch together current processes. Budgets always have a way of spending themselves and bloat up as much as they are allowed.
When trying to fix things, we get emotional and defensive instead of reasoning through what should be done. To overturn poor decisions made in the past and sway wary department heads, you need hard numbers. Having a comprehensive look at important metrics like cash flow will make the right decisions clear and easy.
A proper assessment of cash flow shows you exactly where the money is coming in and how it’s moving and gives insight as to what happens when it gets there. To stay open, you need to stay in the black. If a project won’t be generating revenue until five years from now, you need the data to make a call of whether or not you can last that long.
Planning where you need to go
When the weather gets rough, our first reaction is to hunker down and weather the storm. We protect our assets, curb our spending and start planning for when things improve.
If this pandemic only lasted for a month or two, this may have been a viable option, but that’s not the reality. Now you need to be answering the question of what can you do to fight this storm.
You can’t stop innovating; the business world is adapting at an ever-faster pace. The companies that stop to admire their accomplishments get disrupted and overrun. A pandemic isn’t going to change this, in fact it may even accelerate it.
Established companies are learning to adapt to working remotely after resisting the trend for years, and many don’t plan on going back to how things were. Citizens are fleeing cities, and there is a legitimate question of whether they will fill back up again once this is over.
Now is not the time to panic, it’s the time to pivot. You need to look at your industry and get ahead of the trends. You need access to accurate models of what your cash flow is going to be in the next few months. You need to figure out what resources you have so that you can deploy them to where they are needed most.
Any hopes that we initially had of just riding this sickness out are dissipating quickly. To survive in this quickly changing environment, a business needs effective tools to evaluate whether it has positive cash flow. Evaluating what parts of your business are necessary is critical and getting back to basics with solid numbers on ‘cash in’ versus ‘cash out’ can help with these critical decisions.
Once a business knows where it stands, the next challenge is to figure out where it is going. Accurate forecasts will help you know what capital will be available so that you can deploy those resources. At Dryrun, we excel in clarifying how your cash flow operates, and forecasting your future to help you make critical decisions and pivot before the competition.