Pivoting in Business
I just got off a call with a client to discuss a brilliant pivot for the business he purchased using a business plan I created for him last year. The pivot was an adaptation to the new normal and to mitigate the losses from the delayed renovation and opening caused by COVID-19. A pivot usually occurs when a company makes a major change to their business after determining that their product/service isn’t meeting the needs of their intended market.
How to Pivot
This call reminded me of some other recent examples of businesses changing their operations to survive and sometimes thrive in the COVID-19 economy:
- You might have heard of the now-famous Goat-2-Meeting. That is the creation of Sweet Farm Foundation, a non-profit animal sanctuary in Northern California that is offering videos of their animals to be used for Zoom meeting backgrounds. Due to the popularity of their service, sales are slightly higher than this time last year.
- Lumen Couture makes wearables, which are fashion items that embed electronics and technology into stuff you can wear. They design fancy, red-carpet-type gowns that shimmer and sparkle when you’re walking for very high-end events and ceremonies. Because events and ceremonies are now on hold, they shifted most of their business to making masks, which people do want now. They designed a black mask that has a screen across the front almost like a scoreboard, saying things like, “six feet away.”
- Golem Bookshop, an independent bookstore in Turin, Italy started free deliveries by bicycle in Turin in response to a shutdown order in March and began offering curated selections of books – themes like revolution, obscure authors you’ll love, indie books. Customers loved the selections so much they started shipping orders all over Italy. Normally Golem sells about $7,000 worth of books per month but in April, they sold almost $20,000 worth of books; it was actually their best month ever.
In times of crisis, coming up with a profit or even surpassing last year’s sales is ideal but anything to mitigate the cash hemorrhage is fine. To pivot, for example, a business might have to change its revenue model which means potentially canceling contracts with existing vendors. This is one of many crucial decisions that the business has to make because once the pandemic passes and the current new normal makes way for the new-new normal, it may be difficult to get supplies in time and at the original pricing.
Each business is different and solutions are not one-size-fits-all. Contact me and let’s figure out what the best steps your business should take to adapt to the new normal.
The Emergency Economic Injury Disaster Loan (EIDL) application from the Small Business Administration is fairly straightforward.
If you need assistance in filling it out, please contact me today as funds are limited and applications are coming in quickly.
4/16/2020 UPDATE: A loan officer from the SBA called me today to let me know that they will send an email with a .gov link (https://covid19relief.sba.gov/#/ do NOT click on any other URL extensions as there are many scams out there). Once I clicked on that, I resubmitted the same application which then takes me to the approval process.
You have probably noticed the deluge of advertising that is targeted to the new reality of being at home. This is obviously a response to the global pandemic we are all being affected by. The following is a breakdown of what is happening and how your business can harness the post powerful trait: adaptability.
Adapt Through Marketing Strategy Marketing
Aired prior to the COVID-19 crisis but replayed recently Campbell’s realized that people are stockpiling canned food. Set to a wholesome and nostalgic soundtrack without pandering to panic buying, they capitalized on an opportunity to remind customers of a classic pairing. On a side note, the music choice was oddly relevant — Thank You For Being a Friend was the theme song to the ’80s sitcom The Golden Girls and the elderly are among the most vulnerable to COVID-19.
Also, more people are telecommuting and are realizing their home computers might not be suitable for work so Dell aired a commercial for one of their newest laptops. Peloton, home office chairs, etc. are all advertising the benefits of being healthy and productive at home. Also, mental health app Talkspace, Delta Airlines offering free flights for medical volunteers, online education, bidets, and more are using this opportunity to advertise their products and services.
Adapt by Seizing the Opportunity
When disruptions happen, it is important to consider alternatives in order to adapt to the new environment. I have advised a new restaurant client to pivot their business model from a brick and mortar location to a commercial kitchen or food truck and adjusted their ad hoc financial projection model to reflect the pivot. Of course, depending on the stage of a business pivoting to a commercial kitchen or truck is not an option; which is why I always provide tailored consultations to each client.
Many people have a lot of downtime now with not having to go into work. It is a good time to take a break from watching the news and start mapping out the idea that you’ve been mulling. Who is your target market? Where will you be located? What are your startup costs? These are all questions you should know the answers to or be actively seeking if you are serious about taking the next step. If you do not know the answers or want a second opinion on, I always provide free consultation so send me an email. Afterwards, those pushup challenges on social media are also a good healthy distraction too from all the dire news.
These are better practices than gouging prices like that hand sanitizer guy.
sanitizer price gouging guy
COVID-19 is devastating the world economy to a degree which caused circuit breakers in the US markets to halt trading twice and oil prices to plunge below $30 per barrel. These macroeconomic tsunamis will cause waves to affect all aspects of daily operations for small businesses including closures, diminishing customer base, and supply chain disruptions. However, there is some relief:
1. U.S. Treasury to Help Advance Funds to Employers for Paid Sick Leave
Treasury Secretary Steven Mnuchin said his agency would advance funds to businesses so they can meet paid sick-leave requirements under a new House bill to combat the novel coronavirus.
In a statement late Saturday night, Mr. Mnuchin said employers will be able to use cash deposited with the Internal Revenue Service to pay sick-leave wages. For businesses that wouldn’t have sufficient taxes to draw from, the Treasury would make advances to cover the costs, he said. Read the full article here.
2. The Treasury Department is not your only option, SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance for a small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- the U.S. Small Business Administration is offering federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
- Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
- SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
- Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities as well as updated on our website: SBA.gov/disaster.
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
- SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
In order to get the process started to receive SBA’s Economic Injury Disaster Loans, contact Your Startup Guru here today
When tired, learn to rest but not give up. If you’re always tired maybe it is your schedule/lifestyle/habits.