8 tips to grow your business during the Coronavirus
The pandemic has hit many business owners in the UK, hard. Statista.com state that "Almost one quarter of all businesses have temporarily closed or paused trading due to the Coronavirus (COVID-19) pandemic in the United Kingdom as of April 2020. The sector with the highest share of business closures were those in the arts, entertainment, and recreation sector, with over 82 percent of them currently closed, compared with just 3.5 percent of human health, and social work businesses.".
Business owners were thrown a life line by the UK Government through emergency schemes such as the Coronavirus Job Retention Scheme (furlough scheme). However these schemes won't be around forever and come at a cost.
The Office for Budget Responsibility (OBR) states that "borrowing would be £355bn for the current financial year (April 2020 to April 2021), before falling back to £234bn over the next year. That's the highest figure ever seen outside wartime".
Whilst most entrepreneurs state that failing wasn't an option, it is hard to see how you can operate with so many uncontrollable variables effecting your business.
- The Government forced you to close for a period of time
- The goods/services you provide were less in demand
- Working from home disruption - read this article on Why working from home doesn't work long term
- The toll on mental and physical health - dealing with the fear of getting and actually getting the Coronavirus
- The bail outs not enough to cover outgoings
All of the above hit one of my businesses that works in the Conveyancing Sector in England. Instead of just rocking backward and forward chanting a mantra of "I will survive", I took action. Based on my accounting background I had already put in place measures before the pandemic which protected the business. However, it was what I did during and after that saved my business and saw it grow, year on year, by 90%. The good news is that these are tips that you can implement into any business and you can still implement and benefit from from.
8 tips to grow your business during the Coronavirus
- 1
Is it worth it?
I hope if you are reading this it means that you have a business you and your employees believe in and want to grow. However, this isn't always the case. External downturns are sometimes seen as opportunities to offset, run down and close a company. If this is the case, stop reading now and start wrapping up your company - this article is solely for business owners looking to grow their business during the Coronavirus.
I did have a business I wanted to grow during the Coronavirus and because of that it was worth the time and energy it was going to take to rebuild an already successful business. I went back into textLean Start Up mode ( a must read by Eric Ries) - which isn't about not spending anything, but how to drive a start-up, how to steer, when to turn, and when to persevere and grow a business with maximum acceleration.
It wasn't just me though. I needed my team to support the company, to be resilient and fight alongside me. This, is where I saw the strength of having the right ethos within my company. Our team stood up to the challenge. We were in this together, with the overall goal of getting the company through, with as few casualties along the way as possible. This went beyond just trying to keep their jobs, it was an ingrained sense of wanting to protect the company they had enjoyed working for.
It was hard, because some of the team had to sit and watch from the side lines on furlough, whilst the others rolled their sleeves up. To keep the camaraderie within the team I ensured we had a weekly call where we all got together over Skype - those on the side-lines still felt part of the team and were kept up to speed so they were able to get back on the field of play as soon as the business needed them.
This close connection saw the first few coming back from furlough and hitting the ground running, posting some of the highest individual sales numbers ever seen in the company.
- 2
This king takes handouts!
We all know that revenue is vanity, profit is sanity and cash is king. When your business activity falls by 60% month on month, like ours did, there is very little cash coming in. You need to take whatever cash bailouts are out there.
Cash is the number 1 thing you need to protect and you need to swallow any pride you may have and look to the support that is on offer. You can click here to see what is available for your business in the UK: UK Gov: Find coronavirus financial support for your business.
"Keep a minimum of 6 months cash reserves"
Another best practice for any business is to have a minimum of 6 months cash reserves in your business to cater for downturns. The pandemic is a major downturn, but it isn't the only one your business will see especially with the 10 year cycle on recessions. Whether your business is cash rich or cash poor, you need to be storing cash reserves to cover for no money in for up to 6 months. If you think 6 months is steep, especially if you are self-employed or a small business owner, then there are some companies that hold a whole year's worth of operating costs. British Airways is one such company and look how much they have needed it during 2020-21; however, it still wasn't enough, as BA look to raise a further £2.45bn.
If you take all your cash reserves out of your business in dividends/salary every month/quarter/year then you have nothing to call upon when you need it. Our 6 month operating cost policy meant we could weather the storm making zero redundancies in our sales team. Something that enabled us to grow faster when the market picked up - I'll cover this more further down.
- 3
Cut back now
Our traffic fell by 40% over night when the Government stopped house viewings so it was clear turnover, profit and cash were all going to take a hit. Whilst I work on turnover/revenue in step 4, I worked on profit and cash by looking at costs I didn't need - I pay less out, then my profit and cash increase - Simples!
For the majority of businesses you can break down your costs into the following and I'll explain how to save money in each category:
Type of Cost | Explained | How do you save money? |
Costs of purchase | These costs directly relate to the money you make. For example, if you sell bread, then flour is a cost of purchase. Costs of purchase go up or down based on the amount you sell, so if you make less bread, you buy less flour. Other costs include card or bank charges, PPC, referrals and affiliate marketing. |
|
Fixed Costs | Contracts that no matter what you have to pay at a fixed amount. These include staff salaries, rent, broadband, mobiles |
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Variable costs | These are completely variable costs and don't go up or down directly based on the business activity. |
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If all of that is way too much detail, then the simple version is list out what you are spending and cut out anything that you don't need or isn't tied into a fixed contract. There are nice to have costs when you are busy, but ask yourself, can you still operate with it now you aren't as busy. Licences for software are often on a monthly rolling contract and you can take them out at any time in the future for the same cost so why not cut them out now if you don't need them. Similar costs include publication subscriptions, groceries to the office, entertaining, memberships.
It is, what I like to think, Marie Kondo would do to your accounts - Ask yourself "Do I need this to perform my business now?" and "What are the costs implications for cancelling it and then taking it back out again in the future?". I added £20,000 to my profit in 2 months using this technique and I spotted some dross that I will never pay for again. How much can you save?
Oh and whilst I am sure everyone reading this only puts through expenses related to their business through their business accounts it is worth stating that now is not the time to 'put the wife's mileage through' or 'put that dinner through'. You need cash for business only expenses not personal benefits.
Managing your costs is one of THE biggest ways to grow your business during the Coronavirus, because you will have the cash to do it by not spending it on dross and spending it where you need to!
- 4
Diversify
It is easy to say, but whilst you are panicking about cash coming in, staff redundancies and cut backs, how do you reinvent the business to make money in a different way. The answer is, the good entrepreneurs make it happen.
Here are some ideas:
- Tom Kerridge (famous chef) - owner of the world famous 3 star Michelin star restaurant, The Hand and Flowers in Marlow, turned being closed to the public in to an opportunity to help the local community and build good will & brand recognition, by delivering food boxes to Wexham Park Hospital in Slough. Meals from Marlow was born. This act of generosity fulfilled a need for the hard working NHS staff and shone a light on Tom's work.
- Brewers and Gin distilleries - finding a new use for ethanol supplies by making and distributing hand sanitiser which is a product in high demand.
- Red Roof Hotels - for $29 you can hire a hotel room to work from as an alternative to working from home. They had empty space, so they found a need for it.
- Session Music - After 30 years of selling music equipment indoors, Session saw the opportunity for the outdoor market for event/private hiring, adhering to the Covid restrictions. They offer a range of outdoor event hire for cinemas and sporting events.
- Parachute Law Solicitors - During Covid, you weren't able to visit a solicitor's office to verify your ID1. When the Land Registry allowed for these to be completed via video conference, Claudine saw an opportunity as we were already using this technology and providing other services using it. We quickly made a web page, SEO'd it and a few weeks later we were page 1 rank 1 getting leads from the high demand. Since March 2020 to April 2021 we have sold 567 ID1s at £100 EXC VAT each.
There are plenty of opportunities to make the most of what you have. You just need the ability to change your mind set and diversify.
Before I move on, my example for Parachute Law is a short lived opportunity, with a short period of time to utilize the niche, or USP. ID1s will slow down once offices are open again. You need to be ready to change again and not just reliant on that one diversification.
- 5
Set-up a task force
This is your core team. The team that no matter what your company can't trade without. It isn't a likeability contest, it is a who do I need to call upon to make the operation work. The rest of the team need to wait to come back from furlough.
It reminded me of when I set up the business. We were doing all the jobs the company needed within a very small group. The balance was getting the right amount of people back, at the right time. For 6 months this was a juggle. However, we were then able to get back to building and growing the business.
- 6
Keep healthy
According to Run Repeat, "Globally, 35.82% of people reported they gained weight during the pandemic" and the BBC reported that mental health problems associated with the Covid-19 pandemic are "likely to be profound and felt for many years".
Whether you think you operate better with a hang over or after a binge on drugs, the truth is you aren't, the business will not benefit from you being unhealthy.
For me I found that I needed to be at my very best physically and mentally to ensure the business was a success so I stopped drinking alcohol for 6 months, exercised for 2 hours a day and lost 3.5 stone. During that 6 months I dedicated myself to keeping physically and mentally healthy so I could run the business and support my team when they needed me the most. I felt more energised, had clearer thought processes and was able to grow the business.
Could you do it? Would you make that sacrifice to grow your business during the Coronavirus? Note I said, could, not would. For some it isn't a choice.
- 7
How can I improve on what we do?
So I'm back into working at the coal face. Seeing the operation of the business with fresh eyes. I had an A4 piece of paper next to me and I made a note each time I thought "Why are we doing this?". This time was the most useful time I have spent in the business because I could fine tune what was already there. Here are some areas you could improve:
- Marketing Messages
- Delivery of services/goods
- Improve cross sale opportunities
- Enhance customer experience
- Internal communication
- Automation (the biggest thing I found was I could automate so much of what I had 2 admin people doing. I now have them focused on managing automation and messaging.)
Make sure you factor in this stage when choosing your team in stage 5 to keep working with you because you need to have strong skill sets around you to improve how the business functions. The business may have out grown your own opinion (and actually, decisions about the operation of the business are far better for being based on statistical facts and testing your theories with clear metrics).
- 8
How do I grow my business after the Coronavirus?
As I write this, the Indian strain is effecting the UK. We have all been building up to restrictions lifting on the 17th May and now there is a new strain that potentially could set back our move toward normality.
One of the greatest challenges is to know when to start building and growing again. When to increase your marketing spend. The traffic light system for flights abroad came in on the 10th May and on the same day every other advert was Booking.com, Trip Advisor and British Airways. Now with Germany placing the UK on the high risk list we are faced with having lockdown measures, if we travel to some destinations - basically, all of the millions of pounds spent on marketing is wasted because it was just too soon.
The Coronavirus isn't going anywhere and whilst we see the summer months come by and businesses open back up and start to build again, the Winter months will come and there is likely to be another variant of the virus. This is a market where you can choose to stay static and hope for a return to normal, or accept this is the new normal and start seizing the market share.
Here are ways you can grow your business after the Coronavirus:
- Scale up
- Sources of work
- Develop
Uncertainty in the market can make your competitors slow to react, or even cause businesses to go under. Depending on what you are offering, you may find an opportunity to buy a failing business and take on their client book.
It might even be an opportunity to spend more on PPC and grow greater market share. The businesses waiting for normality to arrive give you a head start, to put yourself ahead in winning new business.
Marketing for some is a Facebook page and a weekly post on the local buying or selling page. You might even spend £100 to boost your post. This is a very valuable source of work for some, however, it isn't the only place and to be honest is stage 1 of 10.
How about a website refresh, some good old fashioned content writing and then natural search business - something we at Boast Consultancy have succeed at on over 6 different websites - one of which is visited by 200,000 per month and turns over 2m a year.
What about PPC, email marketing to existing clients, referrals from local businesses or previous customers, affiliate marketing on well visited websites, posters, flyers, Twitter, Instagram (as long as it is visual), retargeting web traffic, door to door - or as my dad once said, walking the board walk.
Do you have a data management system so you can look after your client data, manage work flow, marketing and delivery of services? Do you need to enhance a product you have or want to bring to market? Is there a new idea yet to get pen to paper?
Now is the time spend time and money developing so that you are ready to sell when the market picks up. There are Government grants available for R&D: Gov.com: Business innovation: what funding you can get and how to apply. No better time than now to grow your business whilst the business activity is slower.
Have I missed any? Get in contact and let me know what you did to grow your business during the Coronavirus.
Whatever you do, remember you can only control what you can control. Make sure to seize the opportunities in front of you. Because, there are enough businesses getting it wrong, that if you manage yours well enough, you will succeed and grow.
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