Category Archives: COVID 19

Death of the Doorknob

I asked on Wednesday, what is likely never to return. Doorknobs will still have their place in private homes, but building designers may rethink surfaces that have to be continually sanitized. Post COVID-19, what will change about your business model?

  • The way you interface with customers.
  • The channels you use to market to customers.
  • The texture in your customer relationship.
  • Your value promise.
  • The price your customer is willing to pay for your value promise.
  • The resources you need to fulfill your value promise.
  • Your cost structure to pay for those resources.

Death of take-out
“I appreciate you as a customer, and I am glad you ordered a meal in my restaurant. No, you may not come inside, not even to pick up your food. We do not offer take-out, we only offer drive-thru.” Long ago, restaurants realized the disparity between the capacity output of the kitchen and the seating capacity in the dining room. Some current restaurants have dedicated parking spaces for take-out, those will disappear. New restaurant construction will consider ingress to drive-thru lanes to expedite meal throughput. The capacity of the restaurant will now be on the output of the kitchen.

Death of cash
This may also be the death of the swipe or chip credit card. NFC (near field communication) terminals allow touch-less transactions at the checkout counter. The checkout counter will no longer have a person standing behind it.

Death of the cashier
We all hate those self-serve checkout counters. The bar code doesn’t read because it’s frozen over or smudged with dirt. Doesn’t matter. Any transaction not requiring a human (or fewer humans) will be performed by a computer.

Death of the doorknob
Keyless entry, building security will all go touch-less. Your smartphone will gain your access, with a code connected to your identity.

Most of this technology already exists. Post COVID-19, its adoption will be accelerated. Think long and hard about your business model.

These permanent adaptations will seem clumsy at first, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Clumsy at First

Last week, I published the following excerpt –

Those permanent adaptations will seem clumsy at first, just not the same, but permanent nonetheless. And the clumsiness will become practiced, and those among us who practice will become competent at a new way. And the new way will improve on par with the old way. And, we will wonder what took us so long to get over our resistance.

Now, a list of questions, from which I would like to get your response.

  • In your business, what have you learned over the past month, that you did not know before?
  • In your business, what changes have you made out of necessity?
  • In the changes that you have made, what might become permanent?
  • How are you practicing those new things, to become competent in those new things?
  • In your business, what is likely never to return?

Post your comments, I am curious. -Tom

This is Not Nuclear Winter

As a business owner, three things to monitor.

  • Cash
  • Revenue vs Expense
  • Balance Sheet

Cash
Cash is king. And, only cash is cash. Accounts receivable isn’t cash, inventory is not cash, only cash is cash. You are going to need it. Preserve cash, tap your lines of credit, apply for government backed loans and grants.

Revenue vs Expense
Your monthly cash flow statement might need to be a weekly cash flow statement. Most accounting systems have embedded cash flow statements, but they don’t look forward very well. Try this simple one.

  • Cash Balance
  • Anticipated cash during the period (month, week) from revenue sources and accounts receivable.
  • Anticipated expenses during the period (month, week) including payroll, rent and any other necessary expense.
  • What’s left? If it’s positive, that’s good. If it’s negative, that is your burn rate.

Your burn rate will eat your cash, so how much do you have in cash reserves to cover? Without modification in payroll, paying your rent, paying your vendors, how long can you last?

Balance Sheet
Most businesses can get their expenses underneath their revenue. It’s painful, but has to be done. It’s not the profit/loss that kills most companies, it’s the balance sheet. It is mortgages, institutional debt (term loans) and covenants that go with. Make sure you know your banker, high quality communication early will help. Your bank will usually put you out of business before your landlord or your vendors.

Make sure you have your survival plan in place.

Rate of Change in the Plan

“Good work, so far,” I said. “If things work out this way.”

“Well, it’s a plan,” Miguel replied.

“What if things don’t work out this way?”

Miguel closed his eyes, trying to visualize something he had not considered. When he opened his eyes, I could tell he had drawn a blank.

“You expect things to occur, your customers to want a certain product line and your volume of orders to reach a specific threshold. What will you do if these things don’t happen?” I continued.

Miguel shifted in his chair. “I know. I was thinking, as I put this plan together, am I working to finish the plan just to get it done? Or am I really thinking through different scenarios. This year already seems a bit weird. Sales are sluggish even though we have really been working our bids.”

“So, what do you think?” I asked.

“I think the world changed faster than our plan.”

Trouble in River City

In the midst of Covid 19, we had an earthquake (5.7) yesterday here in Salt Lake City. As we look forward, evidence of economic contraction is appearing, for some, aggressively attacking. This is not a time for panic, but a time for rethinking.

Lee Thayer, (Leadership 2004), speaks about necessity and its importance in the workplace. The entrepreneur, who starts a business, only puts in place that which is necessary. Only necessary equipment is purchased. Only necessary people are hired.

As time advances, and the business becomes more complex, necessity becomes more complex. And management decisions are made to bring on more infrastructure to support that complexity. Sometimes those decisions are accurate; sometimes those decisions miss the mark.

During this rethink time, look around. Re-think your work-flow. Re-think your personnel structure. Carefully examine what your customer wants, to make sure what you deliver is necessary.

Some of you are already hurting, do not give up hope, rethink. Some of you are thriving, don’t think you have dodged a bullet.