What to do About the Coronavirus in Your Business | Ep 8

Speaker A

00:00:00.560 - 00:28:54.580

This is episode eight, and I'm going to talk about the impact of the coronavirus and how I'm advising my business owner clients to navigate through this so they come out as strong as possible on the other side. This is the Bottleneck Breakthrough podcast.

I'm Josh Long, and this is all about helping you find and fix the biggest challenges in your business to unlock growth and profits that last. Hey. Hey. Welcome to the episode. I think this is an interesting one.

Definitely not one I was planning in my queue of topics to cover with you as we dig into Bottleneck Breakthrough strategies.

But it's kind of impossible to avoid this topic right now, the topic of the coronavirus, unless you're living on an island where there's no Internet and no cell service. This is affecting you. It's affecting everybody.

And I think without getting into all of the hypotheses behind it and possible conspiracy theories or whether the CDC and the World Health Organization are correct and accurate or not, there's some real practical stuff that you as a business owner can do right now to strengthen your position and come out as strong as possible on the backside.

And I know John Paul Getty, I think that was his name, said the quote of more profits are made when there's blood in the streets than any other time in history. And he definitely took advantage of it in his day.

I don't remember exactly his timing, if that was after World War I or World War II, but he definitely made a mint buying depressed assets. And I know a lot of people are playing around with stocks and stuff and saying, oh, well, Tesla's down and Apple's down, but they'll bounce back.

That's beyond the point of this scope.

What I want to talk about today is what do you do today and going forward over the next coming months to navigate as best as possible with your business? I got a client, they've got a fantastic software called iCapture, and they serve the trade show industry.

They help companies that go to trade shows to not just capture the info of the prospects that come by their booth, but they set up all sorts of amazing segmentation automation and get leads to salespeople as fast as possible and the hottest ones the soonest, so that the marketing teams and the sales teams are able to demonstrate ROI on all trade show activities. Obviously, they're affected. Trade shows are being canceled left and right.

They're the number one thing being canceled right up there with sporting events. The NHL, the NBA, college basketball, March Madness. They're all done.

Music festivals on hold canceled for the foreseeable future NFL combine and opportunities for those kids to get a chance to increase their draft stock. Done. But trade shows are massive, massive, massively affected right now. So obviously my client is massively affected right now.

And so when we met this week to discuss what are the strategies, what are the next steps, the. I loved his take on it. And the reality is that trade shows will come back. It's inevitable unless there's a pandemic and we all die. Right.

That's the most extreme example. And let's say this is level of bubonic plague and 40% of the of the world population is wiped out.

There's bigger issues than whether your business survives that. But short of that, this will pass. Trade shows will come back. He will stay in business.

And so we were talking about what to say to his clients and to the past clients and to past prospects that never signed up and to his. All of his, all of his current prospects. So we crafted messages to each of these. And the thing that I start with is be a human first.

There does not need to be a sales opportunity and a message to these people.

So for his current clients, it's letting him know, hey, we understand that you just had a bunch of trade shows canceled and you may not have a full pipeline, but we're here to help and we want to encourage you to take this downtime and get your systems in place and get the next level up. It doesn't have to be with our software, but get the next level up and making the most of trade shows when you get back to them.

Because this is a time where you can get all your ducks in a row and come out swinging when trade shows start back. Because there's going to be a lot of companies that hunker down, that lay off staff, and they're not going to be ready when things pick back up.

Then we talked about, what do you say after that?

Well, go to his prospects that never converted and that have had open proposals or closed proposals or lost proposals over the last year and just send them a message and say, hey, even though you're not a client of ours, we just wanted to let you know, here's some advice we gave our clients, that now's a good time to get your ducks in a row. And again, it doesn't have to be our software.

We just want to give you a heads up because we think about this stuff, that trade shows will come back up and we're here for you and just deliver a goodwill message to those prospects that never signed up.

And then from there there's so many follow up opportunities for the people that weren't that never signed up, that opened that email, that first email, send them a second email and say, here are some more advanced strategies we're sharing with our clients. We're happy to help you with them if it's a fit or not. And you don't have to sign up with us to get this help.

We're just wanting to help everybody that relies on trade shows because we're all in this together. Again, goodwill with a light call to action.

And so as we went through all of these different constituencies, we just came up with different messaging and different cadences to release these.

And maybe by the fourth message we could get a little bit more aggressive with somebody that's opened all four messages or maybe replied and say, you know, lots of companies are frustrated that they can't demonstrate an ROI on trade shows. And we know that iCapture really delivers a fantastic ROI.

And so if you want to bounce back strong and maybe even bounce back stronger than you were before, get set up for iCapture. And if buying's on a freeze right now, just put your name in line and we'll get you processed in the queue.

Because we have a sneaking suspicion that we're going to have a lot of prospects and a lot of companies wanting to sign up with iCapture once things are back up and running. And we don't want you to have to fall to the back of the line.

So utilize this time to hop in line and put your name in line so that you're not left in the dust when your spending gets unfrozen. So taking a very proactive stance that business will eventually resume is critical. And just a quick, very, very tactical tip.

Over the years, I've sent hundreds and hundreds of emails to prospects and what I found was when you send an email, take the unopened contacts, let's say you send to a thousand people and 300 of them, open the first one, take those other 700 and resend the same exact email with a different subject line so it doesn't get nested under the first email and send it 24 to 48 hours later. And the crazy thing is is the open rate usually get another 50% bump.

So if you got 300 the first time, you'll get another 150 of the 700 the second time. And there's no increase in unsubscribe rate frequency, there's no increase in complaints, but you get an extra 50% open rate.

So I actually was impressed with my friend Rob Walling when he came out with Drip, the email CRM that they built that in as a feature. When you'd send a broadcast campaign, they'd say, do you want to resend this 24 hours later?

And then they'd have a subject field pop up and you could tweak the subject field. I mean, one character is all you need.

One word, one punctuation mark, whatever, and it'll be a brand new email going into their inbox that increases your chances of more opens, more people seeing it. Because we know that 100% of the people we send emails to do not open them. It's just the nature of the beast.

And so increasing our chances of getting more opens is the name of the game. Because if they're not opening, it doesn't matter what we said, they never saw it. It's like a tree falling in the forest. Right?

So what can you do right now about your business that can take action? Some of you may not be as affected.

Maybe you're like some of my clients that have lawn care companies and they're coming out of the winter and they've got their busy season kicking right up in April.

And it doesn't matter what's going on with coronavirus, people need their lawns, people need their yards, people need their trees and bushes and hedges and everything taken care of. So I still think it's a great opportunity, though, even if you're not as affected as my software client.

I'd suggest letting every one of your customers know that you're thinking about this and that you care about them.

And if you want to let them know some measure you're going through to help increase their safety or reduce the risk of spreading to them, make that known. If you just want to let them know you care about them, let them know there's a lot of people really, really scared about this right now.

They're drinking from the fire hose of the mass media that's doing nothing but fear. Fear mongering and making an absolute mountain out of this and making it, being Chicken Little, running around saying the sky's falling.

So whether you think this is a big deal or not, I personally think we'll be fine. I look back at the H1N1 virus in 2009, the swine flu, and 60 million people worldwide got it, and there weren't very many stories about it.

And the CDC and the World Health Organization claimed that was a pandemic and it was just like a strong Flu. And just like it seems that coronavirus or COVID 19 looks like. But let your clients know.

Let your market know that you care about them and you're thinking through this through.

Then when someone calls to cancel or use the virus as an excuse not to move forward, I'd reframe it and help them see that their life isn't over because of this.

If they're like the clients of my client above, tell them that now's the perfect time to get everything in order to take over market share as others retract. Because if you're in the B2B space, that's the argument.

If you're B2C, maybe it's give them a little bit of grace and say, you know what, we'll put your account on hold through the end of March until the dust settles so that you can feel confident that you're not utilizing us during a time that you don't need us, whatever that service is. Third, I would definitely cut unnecessary expenses immediately. Hold off on anything new until the dust settles.

You definitely don't want to be spending money thinking you'll strike while the blood is in the streets. Because right now the chaos of the media is drowning out every other message right now. It's kind of like it will be later in the year.

During the election cycle. When I worked for Chet holmes back in 2008 and the election was going on, we could not run ads at all in the fall of 2008.

Satellite radio was our bread and butter and it didn't matter how much we wanted to spend. All of the political ads were given priority because they have a shelf life. They're going to expire once first week of November comes.

They're never going to run another ad. So they all got priority and we had to sit in the back and our lead flow definitely dropped. So do not try to increase ad spend.

Do not try to find some new channel right now. Just wait. Other unnecessary expenses. If you've got some big project that you're wanting to start and you're waiting on a proposal, just pause it.

Put it on hold. If you've got a big project underway and there's big expenses and you're not sure if it's going to pay off, just put it on pause.

I don't think you need to fire anybody. I don't think you need to downsize or cut back on maintaining what you've got. But definitely do not try to spend into the chaos right now.

I imagine by the end of March, the dust is going to settle. And we're going to have a lot more clarity on whether this is more, more serious or less serious than everybody's saying.

I think it's actually really handy that Tom Hanks and Rita Wilson and then Rudy Gobert of the Utah Jazz and Donovan Mitchell of the Utah Jazz both that all four of them got this, because in a couple weeks we're going to know, did they get through it just fine? Are they all dead? And my guess is they're going to get through it just fine like any other flu.

And the news is going to have less and less credibility and credence to keep screaming about how bad this is.

So if that happens and these four people come through it just fine, and more and more high profile people get coronavirus and come through it just fine, I imagine by the end of March this might die down pretty well. I'm not saying that the NBA is going to start back up and that everything will go back to the exact normal it was as of mid February, let's say.

But it'll give a lot more clarity as to what's going on going forward.

So a couple of my clients, we were talking and I said they were wondering about tips about all the possible contingencies because they see so many different angles of how this can shake down. And really, to me, there are really only three possible broad outcomes that come from this.

The first, I said it earlier, that this becomes a real play and the world never recovers. That's extreme. I just don't see that happening.

The second is that this triggers the next recession and we retract like 08 or worse for the next three to four years.

I think because of all the irrationality of the marketplace and the apocalypse that's happening in people's heads right now, there's definitely a possibility that that happens.

That the underpinnings of our economy and some of the potential bubble points that I've seen, whether it was student loans or the real estate market getting too hot again, or interest rates being too low, or the used car market and the lease market, I mean, that's a huge bubble in and of itself. Any one of those, if those trigger from this chaos right now, it's very possible.

All of my buddies, we've all been holding our breath waiting on a recession or a retraction or some kind of correction. We hope we're wrong, but there's too many things that make it feel like that's gonna happen.

So I don't know though, if coronavirus is what triggers that. So the second option, let's say that we do go into a full blown recession or worse, the like we did in 08 or worse, then what do you do?

And then the third option is this blows over in the next two to three months and everything goes back to how we were before, pretty much playing the game plan that the swine flu had in 2009. So let's look at these three buckets and figure out timing triggers.

Right, so in number three, that this blows over and it takes a couple, two, three months, what needs to happen? What do you see as the triggers?

Well, by the end of March, like I said, if a few high profile celebrities get it and they get over it and the news kind of dies down, then you can feel that, okay, we're gonna, we're gonna have some change. This will bounce back by the mid summer, end of summer. So let's start getting some things in order.

Let's say like my client with the software company, that their clients are getting all of their systems and tracking set up so they can show ROI and they have everything ready and they have all of their events and promos for trade shows lined up so that when that first trade show happens, it runs flawlessly and they show up with a strong presence to capitalize on it. So that's getting ready to be ready.

Now let's say that by the end of March we don't have any clarity and it looks like the news is going more and more and maybe the CDC center for Disease Control put some sanctions on our movement throughout the US which impacts all of our businesses. Well, that looks like it might be the beginning of the recession.

And so if the recession happens, and I'd say by end of May, beginning of June, we'll start seeing some markers as to whether like for me in the mortgage business In August of 2007, IndyMac bank, they were a big mortgage lender, they went under overnight In August of 2007, they were the canary in the coal mine. They were the first ones to fall. And then it wasn't until a year later that Lehman Brothers fell.

And so that IndyMac bank run on the bank and closure was the beginning of the end for me in the mortgage business and was the very beginning of the recession in my mind. So maybe by June some trigger, somebody falls, somebody goes under.

I know, like in the media right now or in the media business media in the last few months, like WeWork was a great example of a bad business model, overfunded, too much money thrown at it. And if they go Under, I wouldn't count that as a recession. They had faulty metrics and a faulty foundation. But maybe Uber pops, right?

They've been unprofitable, they've had all sorts of scandal in their company. Maybe they go belly up, maybe, maybe they shut down overnight and that ripple effect causes all sorts of other problems.

So if we're heading into the next recession, then my view is, okay, what can you do to maintain your current clients, maintain your current staff and get lean as much as possible so that you're cutting back on wasted ad expense or various services in your business?

Whether you take everybody out to lunch every other Friday and you spend a bunch of money on stocking your office with goods and treats or whatever, I don't know, there's always a little bit of fat that can be cut back. But start taking those measures to conserve cash if you've got any. I don't know that you can refinance anything.

Right now I'm not sure that any banks are even possible to approach.

But maybe by the time the trigger happens, that looks like we're going into the next recession, maybe you get a sweetheart deal with your bank to consolidate some debt and put it into some long term note that is a better deal. I don't know.

But as things start unfolding, if it doesn't look like we're going to bounce back in the next two to three months, then I would start conserving cash.

Look at what you can do to preserve what you've got and strengthen the relationships with your clients and prepare to hunker down to make it through the market downturn over the next couple years. So those are just some things that I look at and it's really timing and trigger based so that you've got a clear mind and a sober perspective.

As I like to say a lot of times with my clients, that you're not trying to juggle all of this in your head and you're not trying to make sense of what to do next in the moment. Because it's so easy to get overwhelmed, it's so easy to have a knee jerk reaction.

It's so easy to send the message to your clients that you were worried about at night, you drafted and you sent the next morning and it was really poorly thought out and it was really overreacting and it blows up in your face.

So my goal with this episode was, is simply to just help you see through the fog, get some clarity and start prepping yourself for these various possibilities. Again, I don't think there's anything that needs to be done today or through the end of March 2020 to figure out, anything to do, just wait.

Just take a deep breath and hold. Make these messages to your constituents.

Make the most of humanizing, being a great human and connecting with them, building goodwill, showing some love and compassion. We all benefit from that all the time. And the last one I would suggest is if you watch the news, stop. I haven't watched it since 2004.

I've never missed it.

I actually deleted the Facebook app and Instagram app and LinkedIn app from my phone this week because I just was realizing, like, man, this is just toxic.

It's just becoming another version of the news media in these feeds and they're just regurgitating What Fox and MSNBC and CNBC and CNN are all just streaming 24. 7. This fear mongering.

And I think Dr. Drew Pinsky from the Loveline fame and all of his rehab treatment stuff that he does with celebrities, I think he just did a fantastic job calling out the media for being horrible fear mongering sensationalist last week. And so anything you can do to cut that noise out of your life is a good one. And so I hope this is valuable.

I hope as you think through what to do in your business and how to navigate as best as possible, that you feel confident, that you feel more peace, that you get some clarity and that you can step away from the noise and realized, we'll all make it through, we'll all be just fine. Because it all works out for good in the end. And we survived 2009, 2008.

I remember taking a call from a car dealer in L. A then I was working for Chet Holmes and Chet was promising the world to turn around sales and help businesses. So we had lots and lots of business owners that were hurting and were interested in our help. And this car dealers in la, Southern California.

And I was just trying to get some insight of where he's at. And he said, bro, I don't know what Chet thinks he can do. We sold. There were 90 cars sold in all of LA market last month.

And prior to the recession, we were selling about 800. So they were down almost 90% in performance. And obviously they've got leases for all these buildings and they've got inventory from all these cars.

And I mean, that's why GM got bailed out and Chrysler and all these companies got bailed out in the auto industry. And because people just stopped buying cars, they realized, gosh, the one I'm driving is just fine.

I don't need to worry about getting the latest and greatest because it just was so uncertain during that recession and that lasted for quite a while. So obviously that car dealer was negatively impacted and there wasn't much he could do to survive it.

It's just a horrible business model to be in during a horrible time. So my goal is that you get out ahead of that.

If you're in a business model like that where, like if you're next to the Chase center in San Francisco and you rely on most of your revenues made from people going to Golden State Warrior Games or other events, concerts that are happening around that area, then maybe you've got a problem, maybe your business goes under and maybe you get out ahead of this.

So back in 2007, my buddy Dale Rainey, he had a couple different businesses that were doing well, but one of them was a furniture company, furniture, home furnishings business. It was a really high end part of town in Fresno. And I think their lease for their retail sales strip retail slot was 25 grand a month.

And he and his wife would go over to Asia and find furniture, India and Southeast Asia and find interesting furniture and bring it back and sell it. And they were doing really well. They were pulling out multiple six figures out of it. And he caught a whiff he was in the real estate market as well.

And so we talked about it and he saw IndyMac go under in August of 07 and I think he had five months left on their lease going into 2008 and he just paid the prepayment penalty on the lease and closed shop and walked away with as much cash as he could. I think they liquidated all their inventory and paid off the lease and called it a day and avoided a huge, huge burden.

If they had tried to extend that lease for maybe another three to five years and been trapped in that marketplace where there was no furniture being bought during that recession. So that's also an option too.

That, that's the hard thing, the hard truth that a lot of us small business owners look at our businesses as our existence, as our only means of identity, as our only means of income. And so a lot of times we'll keep pouring money in to keep the doors open and keep it afloat.

And that's, that's definitely something I don't recommend. Don't mortgage your house, don't take out any short term loans to pay payroll, don't, don't spend good money after bad. Really.

That's the, the game plan of an, of a gambler, somebody in Vegas that keeps thinking they're close to winning and they keep going back to the ATM and they keep chasing their losses. Look at it like an investor. Figure out where the stop loss is.

Figure out how far you're willing to ride out uncertainty the minute your business starts going unprofitable on a month over month basis. Figure out how many months of unprofitability will you allow before either you slash overhead significantly or shut it completely?

I know that a lot of business owners I deal with are super empathetic. They care for their client or their employees.

They care for their staff and they feel horrible when they have to let them go or downsize or shut down entirely. But that's not your responsibility to keep your employees paid.

If the business isn't making money, it's not your job to sacrifice your net worth to keep them keep their mouths fed.

If we we go into a full blown recession, there's going to be plenty of unemployment, there's going to be plenty of solutions for people who don't have income. And it's not your job. You are not the government. You are not a nonprofit. You're not a food shelter or food pantry or anything like that.

So think through these things, these triggers that I talked about. And if you have any questions, feel free to email me podcastottleneckbreakthrough.com I'm happy to talk about these on a future episode.

Happy to reply to you via email if it's if it makes sense. But I hope you have a sane head, get some clarity, get some peace, get some separation from all this chaos, and I hope you stay healthy.

Hope none of you get this flu bug because it doesn't sound fun. But I'm sure we'll all survive and we'll come out stronger for it. So have a great day.

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