Surviving The Storm
Business Lessons from the Pandemic
While we are still fighting our way through, enough time has passed since the beginning of the COVID-19 pandemic to allow us to reflect on the lessons we have learned.
One key lesson that I took away from the pandemic is that while life is unpredictable, business owners are unbelievably resilient. From surviving multiple lockdowns, pivoting businesses in new directions, or rebuilding completely, we are emerging stronger and smarter.
Although the pandemic itself was largely unpredictable, the businesses that survived (and thrived) were the ones that had the right tools, teams and strategies in place. So how do you take these lessons learned to better prepare yourself for potential future storms?
This includes having a Fractional CFO in your corner. Many of our clients noted that our support and guidance helped them whether the storms and be better armed to face this difficult time.
Surviving the Storm
We can compare our businesses to a ship facing a hurricane. Ideally, you’re not on the water when there’s a hurricane, but experienced captains know how to face them. How do ships survive? Three key elements are:
A well-maintained ship
A well-trained crew
A long anchor chain
Likewise, surviving a business storm relies on the same three elements: a well-maintained business with strong foundations, the right people on your team, and the flexibility to adapt to changing conditions. Let’s expand on each of these elements and understand how they contribute to a resilient business.
Strong Foundations
Most businesses have a general sense of their sales and gross revenues. However, when it comes to the more granular detail, many business owners are in the dark.
When your business takes a financial hit, not knowing where your money is going makes it hard to react quickly and stop the leaks. What you don’t know can truly hurt you.
Having a strong foundation, and the right processes in place, will ensure that your numbers are being reported accurately, and in real time. This means ensuring all transactions are categorized appropriately, sales tax is recorded accurately, customers are paying you on time, there are no unpaid bills stacking up. All of these processes contribute to smooth operations and a success business.
Real-time reporting also gives you the ability to identify problem areas, small leaks, before they turn into floods.
Just like a well-maintained ship is better equipped to face a storm; likewise, a business that understands where its money is allocated and seals up any leaks can survive a financial crisis.
The Right Crew
The pandemic brought on a myriad of new challenges for business owners – from pivoting brick & mortar stores to e-commerce, to utilizing technology to interact with clients, to navigating the government programs to obtain financial support (acronyms such as “CERB,” “CEWS,” and “CERS” are now part of our everyday vernacular!)
Navigating these next steps and the maze of requirements for these programs became an additional full-time job for many business owners.
Having someone by your side who responds well under pressure, understands your business and its challenges, and speaks the language of government programs are just a few areas that our clients benefited from by having a Fractional CFO on hand during the pandemic.
A ship cannot navigate through stormy waters without someone familiar with the route. Your business needs a guide, someone with their finger on the pulse, to get through the murky waters of the unknown.
Flexibility & Liquidity
A short anchor chain is a real danger to a ship once it arrives at a port. The movement of waves, combined with a tight chain, could cause the anchor chain to snap. Then, there is nothing anchoring the ship in place, and it will quickly be lost at sea.
Likewise, a business that has not paid attention to allocating its resources and the importance of liquidity does not have the room to be flexible. Without that space, your business could be facing some very dangerous situations.
However, a Fractional CFO can see dangerous trends and how that could manifest within a business. Our clients meet with us regularly to discuss these trends, and we ensure that there is an understanding of how you can achieve that resiliency.
Never Unprepared
Storms are part of life at sea, and your business will face different challenges. However, just because a challenge is unexpected does not mean it needs to catch you off guard.
Marine life today is driven by information. For example, modern sea captains have access to historical weather data, satellite imagery, and other tools that guide them to select the safest route for their crew.
Likewise, a large part of a CFO’s role is to review a company’s past performance, analyze the current situation and understand the future possibilities or obstacles. Again, it’s taking the financial data and giving it meaning that informs key business decisions.
COVID-19 taught me that life is unpredictable, but it also taught me that we are resilient. If you would like to build a business with the strong financial foundations to weather any challenges you face, I encourage you to book a call here.
