Not to make light of the disease and difficulty that the virus has caused for people, the title of this blog is to simply call out the focus and creativity that has been brought out by the pandemic.
Over the last 30 years as a business owner, we have experienced economic repercussions of the dot com bust, 9/11 in 2001, the 2008 crash, and now the fallout of COVID on our economy.
While the specifics of this economic crash are different than the ones listed above, the results are not as unique. The thought was “Wow, didn’t see this coming, but here we go again.”
In 2008 I recall with great clarity the conversation between my business partner and I regarding how long might it take to break even on a monthly income basis, and how much money we each needed to pull out of savings to fund the gap. We guessed 10 months – it took 20.
We now had the motivation to have the hard conversations and make the hard decisions.
Our game plan was to simply stay in-game. I enjoy new projects, business experiments, and innovation. There was none of that for two years. 90% of our discussions were about how we could reduce expenses. I recall saying at least once “I’m not having fun at work.” My partner confirmed, “Sometimes work is work.”
That made everything better. Not really.
Like a body fighting a virus for its very breath, we got to work cutting monthly fees from services we didn’t use anymore – something we should have done long ago. Surely those miscellaneous expenses didn’t add up too much? Wrong. They did, and it was unhealthy.
We looked at how we paid our employees. We had inadvertently set up production incentives that fostered double-dipping. We had avoided the confrontation of removing them because surely those bonuses didn’t add up to very much? Wrong. They did and it was unhealthy.
We also looked at the base salaries we had for our sales management staff and cut them by 20%. We offset the loss by offering the same amount in production bonuses. Those were hard conversations that left some people angry and a few quit.
These economic downturns happen, but they can create health for our businesses if we eliminate the unneeded expenses and learn to do things more efficiently. This is not the go-to thought for 90% of entrepreneurs, but it is a necessary habit to form as a business owner.
You may recall the fact we had savings to dip into – that’s a post for another day. A financial war chest turns an emergency into an inconvenience. Authentically successful businesses have to be able to fade some heat.
There are many businesses doing these very things and are in process of developing new ways of serving clients using tech they weren’t motivated to use until now. Remote working isn’t an option anymore – it’s a necessity. Same as is the curbside pickup for food. Millionaires will be made from this thing we call COVID. Will you be one of them?
Business owners and entrepreneurs are invited to take my Free Online Assessment on the main page of the 7th Gear Website.