Most businesses are now able to operate at Level 3 but Pavlo Phitidis argues that this doesn’t mean that you should rush back without considering the implications.
His point is that all the costs you negotiated down to keep your business afloat during lockdown will probably be due once you go back to work. And are you able to cover those costs yet?
Listen to the podcast of Pavlo’s discussion about this with Bruce Whitfield on The Money Show on 702 & CapeTalk:
Re-negotiating with these suppliers, based on a percentage of revenue, for example will enable you to re-start without suffocating under the burden of full costs as per pre-lockdown, when your income is not going to be back to where it was pre-lockdown.
Do not take bets, which if they fail, will sink you altogether. He uses the example of learning to jump from a 3m height. You don’t start at 3m – you start at 30cm and practice jumping perfectly. When you have that, you go up to 45cm – and only move on when you land perfectly, 500 times over, at that height – it has to be safe before you can proceed
Only choose 2 or 3 of all the products and services you could take to market post-lockdown. See what your customers need – and concentrate on those rather than chasing the ones you THINK will generate the biggest revenues.
Focus on your customers and categorise them into Red, Amber and Green – in terms of their likelihood to survive lockdown. It may feel very callous but if you are struggling, you can’t afford to invest in your Red clients, who may not be there next month. You need to go to the money – those who will likely pay, and will likely be there next year.
If you consider this re-opening as a battle, you need to be right at the frontline of the battle, to listen to what your customers are saying, and to understand what is really working, and what isn’t, to make the calls on what to do next. You have everything to lose as the business owner – so you’ve got to be confident in the market insight that you have.
Don’t be bullied by clients who are demanding excessive terms to secure their business – negotiate terms that give you some cashflow – maybe it will be monthly payments for the duration of the project rather than your usual upfront terms, but you cannot afford to invest any time and effort in anything you aren’t getting paid for. And you don’t know how desperate that client is and whether their promises to pay at the end are realistic.
As we re-open, you need to tell your customers that you are open again. Without knowing what their circumstances and experiences are, you need messaging that is appropriate to the times. Maybe they aren’t opening, maybe they have had to lay off team members, maybe they are scared of re-opening. Consider your tone, approach and offer carefully to ensure your message resonates with their need needs.