We are currently 10 weeks into “The One Hour Hero”, and this week I called an audible to post something a little bit different.
I realized that we need to focus on “What’s Next”, looking at the first steps when we began to triage our new normal, where we are right now in the middle of a reset, and where we can expect to be in order to plan for the opportunities to come.
The tactics I am outlining in this post were influenced by the amazing success stories from the “Comics Collective” calls that I did recently. I recently had two Zoom conference sessions with a group of comic shop owners representing AJ’s Comics, Docking Bay 94, Livraria Setima Dimensao, The Multiverse, Pop N Comics, Rock Shop Music and Comics, and Tales of Tomorrow. I want to give a shout out, and a thank you to all of them for sharing their stories with me and proving to be inspirations. Keep an eye out on the Manage Comics Blog for the full story about what we talked in The Comics Collective.
I also have a lot to add based on my own planning for my business, and how we’re adapting.
Right now every business is being forced to adapt at a speed never before seen. Things are changing daily, as unprecedented restrictions are being made on work, travel, and even simple movement.
In my own business we had to radically adapt very quickly. We lost some major clients, and had to stop billing for Manage Comics. Meanwhile bills needed to get paid.
We needed to quickly stop the bleeding, figure out a new normal, and plan for the future. Speaking to comic shops, I know many others had to do the same things back in mid March.
Stage One – Triage and Salvage
The first step, nearly a month ago, was to triage and figure out next steps. The very first thing I did was look at all of our expenses at NorthIQ and figure out where I could save.
My fixed, non payroll expenses came out to about $3,000/month. For some of those items I simply couldn’t do anything, but I found a number of “nice to haves” that we were paying money for. I cut about $300 in expenses on my first pass.
After making a number of hard decisions, I dropped over $1600 in expenses, the biggest of which was executing my 30 day lease vacancy option on my office. NorthIQ and Manage Comics is now officially a “remote office” just like the early days when I started this thing.
Next I looked at salaries. Because the Canadian Government is offering a bunch of subsidies, I held off on this, and did some temporary adjustments, which I am confident I will be able to return in the future, however right now we need all hands on deck.
Finally, I looked at our accounts receivable, called in some invoices, and looked at front-loading a couple of future invoices at a discounted rate. Getting dollars in the door was important, because I know that cash is king.
We spoke with all of our recurring customers and figured out who was going to continue with their current work load, who would be reducing, and who would need to outright cut.
At the end of the first week I had slashed expenses, completed a short term projection, and improved my cash position, which makes me more able to withstand a long term cash shortage.
My suggestion on stage one – Triage and salvage
At this point, you have likely talked to vendors and discussed your current expenses. This is a good time to look at some ongoing expenses and decide whether you need to continue with them.
I’d suggest looking at your credit card processor first. Many card processors charge ridiculous rental fees for a machine, while you can get the same (or better) terms from new processors including Square.
In terms of accounts receivable, the beginning should have been a time of making calls to accounts, and clearing up old boxes.
With stimulus checks coming in, and a massive reduction in outgoing expenses for many, hopefully many accounts can clear up their backlog and turn that inventory into cash for you.
Communicate via email and phone to let those accounts know that you need the money, and don’t be afraid to ask. They entered into a contract with you when they asked you to pay for product out of your pocket. You did it happily at the time, now is the time to ask for them to return the courtesy.
How will the beginning affect your long term outlook?
A stronger cash position means that you can ride this scenario out longer. Ensuring that you have less cash going out, and more cash stockpiled will keep your business healthier, but we should look at some of these options more long term.
I found $300 in “nice to haves” which I don’t even miss. Some vendors were offering 60 day “payment vacations”, and I put a couple of projects on hold to free up more money. I also managed to secure a super sweet deal on a couple of my ongoing expenses by paying for them up front for a year – I reduced one invoice from $50/month to $150 for the entire year!
My expenses are reduced even after the pandemic subsides. I’ve also scheduled some customers who were paying monthly to now do an annual payment that will coincide with when some of my annual bills come due next year.
Communication is key here. I let my customers know that as far as they were concerned it is still business as usual, and I opened my calendar up to take many more meetings.
Stage Two: Enablement and Reset
Stage two is where we are right now, as businesses began to adapt to the “shelter in place” and “stay at home” orders, we have had to put new systems and processes in place. Our businesses are evolving. Those that aren’t able to adapt will likely not survive.
Before we go any further, please understand that everything is dependent on your federal, state, and municipal rules. These can vary widely and you need to know what your local rules are. You may not be allowed to go to your store, you may be restricted on where you can ship product to or from. These rules are changing often, so be sure you understand what they are.
Back to enablement.
We can break transactions down into three parts, stock enablement, order enablement, and fulfilment enablement.
Stock Enablement – you need a reliable way of knowing what is available, and what is on the way to the store. What you have more of, and what you need to order more of.
If you have some sort of POS system, then you have a great way to track your stock and make sure that everything is accounted for.
Shy of that, you likely have cycle sheets or some other method of knowing what is available. Knowing WHAT you have is essential to the next part in the transaction process.
Order Enablement – You need a way of letting people know what you have, and giving them a way to pay for their order.
The best way to set up an ordering system is with a website, whether it’s WordPress with WooCommerce, a Shopify store, or even Square’s recent entry into online stores.
You can also choose to go older school by showcasing the products you have available, and offering them for sale on social media platforms like Facebook, Instagram, and Twitter.
Right now cashless transactions are preferred, online transactions through credit card processors, PayPal, Venmo and bank transfers are all very easy to set up.
You will also need a way of tracking and reconciling the transactions, whether that is through your cash register, through accounting software, or via the built in tools in your online ecommerce solution.
Fulfilment Enablement – Getting the product to your customers is going to be a challenge, and will vary by location. Ideally you will be able to offer “curb-side pickup” and delivery options.
In some cases you may need to ship using commercial shipping options. Make sure you account for any extra charges for shipping, shipping packaging, and extra labor in your pricing.
Be transparent about this whole process. What are you doing to protect yourself and others? Are you sanitizing all surfaces before you ship? The COVID-19 virus can live on paper surfaces for up to 24 hours, and on plastics for much longer. You’re also dealing with collectables, and for some condition is paramount, so how do you ensure their order arrives to them undamaged?
In my home town, LA Mood Comics & Games has a website, but they’re also using Facebook, Instagram and Twitter to mention specific products. The other day the Stranger Things D&D set came up in my feed. I messaged them on Facebook, they responded with a price (with taxes) and the way I could pay them. I paid for the order through a bank transfer, and they offered curb-side pickup, or delivery. Since I hadn’t been out of the house in a couple of days, I opted for curb-side.
They prepared my package, and I called when I was outside of the store. They placed the package on the ground, closed the door, and I picked it up, and headed home.
It wasn’t as great as getting to chat with Gord and Carol, but we were all safe and my kids are learning D&D. I’d say that is a win, win, win.
Having the ability to make sales even with severe restrictions is giving LA Mood much needed cashflow, but it’s also creating a new line of business for them.
This is also the point where we can reset. Look at what is working, what isn’t and figure out how to do more of the good stuff, and less of the stuff that isn’t so good.
In my business we are also doing a ton of planning. We are looking at our own product mix and seeing where we can make changes. We looked at Manage Comics and saw a bunch of opportunities, and without the ongoing grind of weekly and monthly updates, we can give these things serious attention.
This is also the time where you should be focused on communication.
Take time right now to make sure that your communication channels are in place, that you have email, phone numbers, and social media methods for reaching your customers.
Stage 3: The Next Normal
The world has changed, and it will not return to “normal” for a long time. Experts say that we could see rolling restrictions until “herd immunity” is achieved (through 70% population infection, or a vaccine), and even then, having gone through this global upheaval we may be in for a very different world.
Remember, different is not bad. It’s just not the same as it was before.
The world will not come back all at once. The economy is an engine, and like any engine it will take time to warm up, and it will take time to get to full speed. The supply chain will take a while to get back to full power, and different jurisdictions may have very different rules for physical proximity.
Communication will your number one priority, make sure you update your hours on Google My Business and on Facebook. Send out emails as your business begins to take on regular hours, make phone calls to your key accounts, and update your social media channels with regular updates.
Plan for opportunity
Not every business will succeed. If you have managed to adapt to the new normal, there will be opportunities. There will be new customers you can reach who no longer have a retailer, you will also have new customers who will be introduced to your business during this time.
It’s important to keep, and even build on the new methods that you’ve adopted to do business.
- Keep your online store stocked, continue offering shipping and pickup options.
- Continue promotional efforts to drive customers to your store
- Keep reaching out to the community after things have returned to relative normal
This will be hard as business ramps up, so my advice is to take the time right now to operationalize as much of this as possible.
- How can you streamline your online store?
- How do you optimize the sales process?
- What is the easiest way to make sure that your social media channels continue to run after this period is over?
As I said, not every business will come out of this intact, however if you take the lessons learned during this crisis, and apply them to the future, I am confident your business will be stronger than ever.
The Key Takeaways
Triage is about strengthening your cash position. Getting money in the door, slowing the flow of money going out the door.
Enablement is about creating new ways of doing business.
The Next Normal is what you make of the opportunities you achieved during this crisis.
We’re experiencing a once-in-a-lifetime “do-over” opportunity. Nobody expects any of us to get things perfect right now, they’re happy just to know that we’re doing our best.
I can’t remember a time in my life when people were more tolerant of inconvenience than they are right now.
This is the time where we can experiment with new ways of doing business, new methods of promotion, and new methods of delivery. Anything you do right now will help to build loyalty in customers because you were trying things when others weren’t able to.
Now is the time to work ON your business, while you are busy right now, many of the ongoing regular day-to-day business problems are not there.
You are not dealing face-to-face with customers, you aren’t doing FOC’s, Initial Orders, bringing in thousands of new comics weekly, doing customer pulls, cycle sheets, and the seemingly never ending battle of running a small business.
I recommend taking a very good look at everything, look at what is working right now, and how you will be able to change and adapt to the future.