I’m currently reading Dare to Lead by Brene Brown and although I’m not ready to do a newsletter series on it yet, I wanted to borrow something from this book. Let’s rumble with vulnerability. There are many attributes to Daring Leadership, but I just want to bring out 2 for now. I’m Daring to lead my team, clients and followers with Clarity, Kindness and Hope as well as
acknowledging, naming, and normalizing collective fear and uncertainty. I’m by no means an expert in this area, but I’d like to give it a try.
As we wait… and wait… and wait to hear if we will be a lucky recipient of the SBA EDIL and/or PPP, we can be doing something to help our businesses survive, and maybe even thrive during this uncertain time.
We need CLARITY around our business (and yes personal) finances. Make sure your bookkeeping is up to date because we are about to need this information to make Daring, Courageous and Bold decisions. I recommend getting a detail P&L out for the last rolling 12 months. If you have the book, I’m going to refer to chapter 7. This chapter deals with our “wants” and “needs.” Many business owners now find themselves in a place where they have no choice but to do this exercise. Get out your red pencils, we are about to mark up that detail P&L with our “needs” and “wants.” Remember, “the goal is to cut cost, not to compromise the business.”
For example, I have worked from home for over 15 years. I like meeting clients at the Capital Club. It’s a private club in the heart of Silicon Valley. It’s plush, convenient and now that it's not even open it may even be completely unnecessary. As a matter a fact, Zoom meetings will become so natural for people that I don’t even know if that expense will ever come back. It just might not be necessary. I may like it, but I don’t have to have it. That’s now on the Unnecessary column.
There is a free version of Asana (a task management system for my team) and a paid version. The paid version has bells and whistles that are nice, but I can live without them in this climate.
Labor is of course the hardest one to deal with. The words said above are worth saying again – Cutting cost NOT compromising the business is the goal. However, with most businesses’ payroll is between 30 and 50% of revenue and it can not go ignored. We need to be careful on this one. If you do receive a PPP loan in order for it to be forgiven you have to keep the same head count, hours and pay for the 8 weeks following receiving the funds. Considering that unemployment has also been fortified by the government, it might be hard to rehire those that may be receiving more on unemployment than they would if they came back to work. I’ve already heard the rumblings of this problem as some businesses that are considered essential are having problems with recruitment. The rules that you must be looking for a job has been tossed out the window. It might be easier to reduce hours while we wait for the answer of PPP than to layoff or furlough. Just something to consider.
No matter whether you receive an SBA PPP or not, it is inevitable that you will need to go through this process. The bottom line is that many businesses are looking at a loss of revenue for 2020. We need to be practical and get real clarity on what we really need and what we just really want.
I want to leave you with encouraging news. I was a new business during the great recession. I had not fully matured as a business or a business owner; however, I made it through the recession, and I can say my business revenue grew through the whole thing. It can be done if we are willing to take the time now to make smart decisions … be proactive rather than reactive.
Need help getting the bookkeeping up to date. Give Sooter Consulting Inc. a call – we are here to help you gain clarity.