Don’t Let Covid-19 Sucker Punch Your Business
Have you heard? There's a pandemic going around.
My coping mechanism is humor because it helps me bury feelings of sadness, anger, or despair.
And you can bet I'm feeling all of those things right now.
I have a heart to serve. My super power is taking someone else's vision and guide their leadership teams and employees to achieve success on their terms.
Not many of my clients are celebrating right now. I'm watching their dreams, their livelihood, and their hope trickle out the door day by day.
My heart is broken. It's broken for those small businesses. It's broken for their employees. It's broken for their communities. It's broken for their families. And it's broken for their customers.
The pandemic is here and it's not going anywhere very soon.
I see three things happening to small business right now. It's either business as usual, sales going gangbusters, or on the verge of collapse (if you haven't already).
I urge you not to loose hope.
My guest on today's blog is Layne Booth, CEO and founder of The Project Booth. Layne is a brilliant with numbers. She's a master at fixing the hidden leaks in your business that lead to growth and profitability.
Our topics today cover managing inventory in a season of uncertainty and focusing on the most profitable activities in your business.
Here we go.
Are you prepared to respond to inventory issues?
Any business in the retail industry — whether in e-commerce or brick and mortar — will encounter issues with availability of inventory. There's either an overstock (which depletes cash flow) or out of stock (missed revenue opportunity).
It can be challenging to get a handle on your inventory sweet spot in a normal business cycle.
But what do you do when everything that could go wrong is condensed into one amplified situation called Covid-19?
The key to responding to potential inventory situations is to have the foresight to PROJECT potential case scenarios and PLAN for how you might respond.
What do you do if production in China suddenly shuts down? What if the transportation system can't get through? What if factories can't produce?
When you have considered the possible scenarios, you can think about your options to respond. And when (or if) any of those scenarios actually happens, you are prepared to respond with thoughtful foresight rather than react with emotionally-charged decisions.
Are you doing what matters most right now?
Do you know the leading indicators in your business?
Leading indicators are what Layne refers to as bread crumbs that lead to revenue and profitability.
Businesses running on the Entrepreneurial Operating System refer to leading indicators as Scorecard items. (Read the book Traction, by Gino Wickman for more on EOS.)
Whatever you call them, these are the activities in your business that ultimately lead to revenue.
For example, how many sales calls does your team have to make to result in 1 sale? That number is considered a leading indicator. Some activities in the business might not be directly tied to revenue.
That's where the idea of the bread crumbs come in.
This activity leads to that outcome. That outcome leads to more activity which leads to more outcomes that eventually result in revenue.
According to Layne, if you're relying on revenue and profit (lagging indicators) to make decisions, you're getting your information too late.
During this time of crisis, many businesses are challenged operationally, working less hours, and have dwindling teams.
What are those bread crumbs in your business that ultimately lead to revenue? Find those activities, uncover those numbers and stay focused on what matters.
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