Profit Power: How to respond to COVID-19 as a business owner
By Jeffrey Scott
Adapting your business plans in wake of COVID-19
By Jeffrey Scott
With the fast moving coronavirus, you need to change and adapt your plans now as a business. Those who act fast will have first mover advantage. Here are 10 responses to consider as a landscape business owner:
1. Do a couple “what if” budget scenarios. If revenue dropped 20 per cent, and if it dropped 40 per cent, what would you have to do? I am not saying the latter will happen, but especially if you are heavy in install, look at it now so you are prepared.
2. Reduce outgoing cash flow on non-essentials. This includes OT and other expenses, and other projects and investments.
In fact, start tracking “free cash flow” with the goal of it being positive each week. This is an excellent practice, and will help you steer through the next few months.
3. If you have been carrying C players (let alone D players) because of the economic boom, consider pruning back to the high performers. You may not need them especially in install work, so make that move now. Some salary people may have to work in the field.
4. If you have thought of experimenting with smaller crew sizes, now is the time to start.
5. Measure sales weekly and monthly; track your pipeline and your leading indicators aggressively. If you have been a “handshake” business developer, then it’s time to change up your networking strategies.
6. Reduce non-performing or experimental marketing and just spend on highest ROI marketing.
7. Many have predicted a coming recession, and now it is likely (as measured by two quarters of negative growth) according to my financial advisers.
This is an opportunity to combine optimism with decisiveness. For those of you who follow me, you know I believe it is important to be optimistic in this industry, but you must also be decisive as you work through these issues. Your employees want to follow a leader, so give them one!
Rally your leadership, and make sure you and they are rallying the troops.
8. The most valuable businesses will also be the most resilient — strong balance sheets, recurring services, high profit (EBITDA) are good places to be this spring. What can you do to get yourself there?
9. Stay close to your clients. Are you in the middle of a job? Those clients may actually spend more if you show them reason. Speed up those jobs, don’t slow them down. Stay close to maintenance clients, too.
Remember the best way to fight a virus is to be in the fresh air and in the sun. Sell outdoor living because it is healthy and good!
10. You need an official response to your employees how you handling COVID-19. I have been working all weekend with my clients and peer group members on this, and we have been sharing responses (a good reason to be in my community: support in difficult times.)
Prep your crew members how to talk to clients, too.
In summary: The key thing to remember about coronavirus is that it will eventually be contained. Things will get worse before they get better, but it will be contained, and there will be a built up demand (in install and enhancements) to do work, which will not all be lost when the economy returns.
Jeffrey Scott, MBA, author, specializes in growth and profit maximization in the greenindustry. His expertise is rooted in his personal success, growing his own company into a $10-million enterprise. Now, he facilitates the Leader’s Edge peer group for landscape business owners – members achieve a 27 per cent profit increase in their first year. To learn more visit www.GetTheLeadersEdge.com.