This article is the first in a series that looks at how suppliers can successfully navigate these uncertain economic times in the age of coronavirus.
No matter your political affiliation, where you fall on the health and nutrition scale or your age, the coronavirus, or COVID-19, has taken virtually everyone by surprise. While many businesses have spent time in the past contemplating plans of action during uncertain times, almost no one saw this coming. As a result, most companies are not properly equipped to handle it (unless you’re Apple and have $200 billion in the bank). Since most of us are not like the tech giant, we find ourselves struggling a bit to make sense of everything as we wade through these uncertain waters. With reduced revenue and diminished cashflow, many of us wonder whether we’ll be able to survive at all. After all, accounts receivable requires the submission of an initial invoice. Take heed, as there are a number of things supplier organizations can do as they face the possibility of a complete shutdown of their business and the economy – if just for a little while.
- Take advantage of any Small Business Administration (SBA) loan. While I am not a proponent of businesses accepting debt for any reason, I do suggest that companies, not able to survive on their own, consider the SBA’s small business loan program. Although the details are still being hammered out, many small businesses such as restaurants, retail stores, service companies and manufacturers will be able to take an SBA loan with extremely low interest rates and repayment terms of up to 30 years. If the difference between taking an SBA loan and not taking one is your operation going out of business, I highly recommend taking one.
- Market when others are not. I completely understand that some industries are at a standstill. Because of that, now can be the ideal time to use clever marketing to carve out real estate in customers’ minds – especially if no one else is doing it. I’m not suggesting, spending a ton of money, creating a Super Bowl ad or developing a marketing plan that is downright distasteful in the current environment. What I am suggesting is looking at ways to conduct some kind of outreach, promotion or advertising that takes your customers’ concerns to heart, even if the payoff will be deferred. The important issue here is that when things do return to normal – and they will – your company can be ahead of the curve and one of the first resources customers seek.
- Deplete excess inventory. If any excess, or aging, inventory exists, seek ways to get rid of it as quickly as possible. When parts of whole industries shut down, it can be the result of customers simply taking a wait and see approach. Unless any stoppage is mandated, now can be an ideal time to slash prices on inventory that could become old in a few short weeks. Personal and business cashflow has certainly been curtailed, but in many areas it hasn’t completely stopped. Many customers are taking this time to find great deals. Your company can be one of the few that offers it to them.
- Offer delivery service. Now that everyone is practicing social distancing, now is the perfect time to establish a delivery service, if your company doesn’t already offer it. Whether your industry is in perishables, industrial equipment, foodservice or retail, offering a delivery service not only could help tide your company over until things get back to normal, but could establish an entirely new and profitable service for the long-term. Many people are now taking advantage of Uber Eats and Instacart when it comes to food. Why not offer the equivalent in other industries? Delivery is not only suitable for consumers. Many B2B establishments can ride the delivery train for the time being and possibly outflank their competitors once things settle down.
- Reevaluate your company’s strategy. One of the reasons organizations don’t take time to reassess their mission, vision or corporate strategies is the lack of time to do it. While many areas of our economy have slowed or come to a complete stop, now is a perfect time to engage in a thoughtful reevaluation of your company’s direction. Take the time to crunch numbers from the most recent quarters and determine if a partial or complete shift is needed. It’s also a good time to thoroughly evaluate whether new offerings are worth implementing in the future.
This time of unprecedented economic ambiguity is tough on everyone and every organization. In spite of the uncertainty, this time doesn’t have to be unproductive. There are a number of hidden opportunities companies should consider in order to come out on the other side much stronger and better positioned.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. He previously chaired the Vendor Forum of the Federal Reserve Bank of Minneapolis and his resume includes time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific, as well as a number of years as an independent consultant.