In May, Donald Trump declared that the nation would experience a V-shaped economic recovery from the coronavirus pandemic. However, on the ground we’re observing a U-shaped economic recovery.
As business owners our focus has to be on finding ways to conserve cash as we navigate this economic impact of the COVID 19 pandemic. Having a LEAN approach in your business will help you navigate the economic recovery well into the future. Conserving cash will prevent cutting back hours, laying off employees, or entering a cash crisis.
Know Your Numbers
Perform a Cost Containment Study printing out a record of every expense you have for the previous year, it will be a very lengthy detailed report. You can categorize it per payable and per month. When we did this before the pandemic started, we found annual charges that we forgot about and are no longer using. After examining every payable; we asked ourselves, “Do we really need that service?” and found a lot of wasted money that we were simply not present to. Another aspect of knowing your numbers takes part in asking, “what are your highest volume items or services? What are your most profitable items and services? and What is the lifetime value of a client and your acquisition cost?” This gives you an overall understanding of some of your key numbers in the Cost Containment Study.
Adapting Your Marketing Strategy to Pivot
When it comes down to Marketing, many people are tempted to cut out their marketing budget to save money, however if you know your return on investment you should continue to market and as we would say ‘Turn Up the Volume!’. A couple of questions to consider are: How many leads does it take to convert a prospect into a client? What is your conversion rate? What is the average number of transactions a customer would do with you in a given time frame? What is your average dollar sale? Knowing these numbers allows you to make informed decisions as you navigate through. If you don’t currently have a Marketing Plan, we encourage you to create one because now is the perfect time to design one. Feel free to reach out with any questions, we would be
Use All Available Resources
When the pandemic arose, a number of economic stimulus monies were put in place by the government to help small businesses retain their employees and keep afloat. PPP, EIDL and SBA loans are some of the monetary resources that you can use to keep your business running. If you or someone you know who got access to EIDL loans of 3.75% interest, you may consider wiping out high interest credit card debt or utilize that money to improve a return on an asset investment.
Despite the pandemic, we participated once again with the 2020 Summer Youth Internship Program funded by the Children’s Trust. This ongoing program provided us with a High School Intern that joined our company for 5 weeks during the summer. This is a great time to use the extra help from a student intern who wants to learn more about the business world and to take ground on initiatives we want to implement. It’s a win-win situation. Our firm will continue with an intern on our Economic Impact Study. To learn more about the Internship Programs available visit https://www.tdnmiami.com
Eliminating Waste and Building Excellence
Paul Akers, owner of FastCap, shared his LEAN journey through his books “2 Second Lean” and “Banish Sloppiness.” Our team are inspired by his journey and we have been learning and implementing the concepts of LEAN since the start of the pandemic.
By eliminating waste and implementing the LEAN concepts we have found and shared with our clients the Kaizen method of “Continuous Improvement” and the difference it’s making for us. Here is an example of 8 deadly wastes: Overproduction, Transportation, Defects and Reworks, Excessive Inventory, Over-processing, Wasted Motion, Waiting Time and Wasted Employee Potential.
Another version of 8 LEAN Principles that are helping our business embark on a journey of growth; continuous improvement, optimizing the whole, eliminating waste, building quality in, fast delivery, creating knowledge, deferring irreversible decisions, and respecting people. We’re currently in the process of refining these 8 wastes for our professional services business so we can share them with other businesses like ours. The key to it all is being content or satisfied with small incremental wins that compound to massive wins for the organization.
Since the economic recovery timeframe is still unclear and growing revenues can be challenging you’ve got to conserve cash. Going LEAN will conserve cash and make your business better.
Begin with asking these two questions; How would a world class inspiring organization do this? And what bugs you? Exploring and resolving these we get you solidly on your way. We invite you to check out Paul Akers website https://www.paulakers.net where there is a wealth of information. We’re raving fans of “2 Second Lean” which is both simple and fun!