What will drive your business success in late 2020 and beyond?

Thinc Strategy

June 26, 2020

The Paycheck Protection Program enabled many businesses to defer making workforce reductions or other drastic spending cuts for a few weeks. This gave leaders time to respond to the impact of the pandemic on their business, whether that meant shifting employees to work from home, expanding online sales or pivoting their service offering.  

Those early recipients of PPP funds are now nearing the end of the eight-week payroll support and are beginning to reevaluate their path forward when those funds are depleted.

As executives now look to make decisions to drive their long-term success, we see four areas where leaders should focus as they formulate their plans. These areas are:

  • Cash flow management
  • Agile business mode
  • Sustainable growth drivers
  • Team alignment

Here are a few specific considerations for each. 

Cash flow management

During early scenario planning in response to COVID-19, one CEO I spoke with offered this obvious, but true perspective “the surest way for a business to cease to exist is to run out of money.” No matter how creative you are in pivoting your business to respond to this crisis, it ultimately comes back to finance fundamentals, so we suggest that you:

  • Update both your revenue and cash flow projections. How does your cash position compare to pre-COVID-19? What changes do you need to make to ensure your business has the cash to operate.
  • Review your aging AR reports. Where is additional follow-up needed? You may see slower payments and should potentially take that into consideration for your cash flow projections.

Agile Business Model

Unless you are one of those fortunate businesses that’s in higher demand (videoconferencing technology, PPE manufacturers, home office furniture, and yes, toilet paper) odds are you’re having to adapt your business in some way to generate sales. Those early shifts may have been hastily implemented – implementing a bare-bones e-commerce platform or redeploying teams on short-term projects, for example.

One lesson from this pandemic is the benefit of flexibility and that’s especially applicable to business models and go-to-market strategy. Take a moment to reflect on the following:

  • Evaluate how your business model has shifted over the past several weeks. Are you selling different products or services? What areas are most likely to continue to grow in the balance of the year? Perhaps your average price per project or sale is lower than before?
  • Is your current infrastructure aligned with the way your model has or is likely to change? Perhaps you need new technologies, an updated organizational structure, new processes or workflow. Are the short-term changes you made sufficient for scaling over the long-haul?

Sustainable Growth Drivers

Many businesses saw a quick decline in sales opportunities or experienced delays in getting new contracts signed. Some companies cut marketing to conserve cash and in response to the elimination of large events and in-person business development.

  • Update your sales forecast and pipeline. Adjust your benchmarks to reflect changes in your metrics on cost per lead/sales, time to close, etc. Have opportunities rebounded or do you need to adjust expectations? Where will your future sales come from?
  • Revisit your sales and marketing strategy. Do you need to shift your product offering or messaging? What new tactics are needed to replace trade shows, events or in-person sales? Are there different ways to package your services to make your value proposition more compelling? Will you need to invest more in sales and marketing to fuel your business? How can you best deploy sales resources?

Team Alignment

Do you have the right people in the right seats for the business needs you have today and are likely to have in the future?

  • If your business model is changing, does your staffing align with the future model? Perhaps you need to redeploy part of your staff to new areas.
  • If you have to make reductions in staff, are you making decisions based on where you think the future of your business will be?
  • What training and team development should you be doing to enable your team to work effectively in the new work environment?

 

Go back to your scenario planning for the balance of 2020 and apply these considerations, incorporating your recent experience as well as your best assumptions on how your industry and market will continue to be affected. If you have questions or want to discuss, sign-up here for a complementary strategy consult with one of our partners.

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