This is a letter I am sending to my clients today. I work with founders and small business owners, it doesn’t cover everything but you may find it helpful. What did I get wrong? What’s missing? Please let me know, I welcome your feedback. Comment below or tell me on Twitter @HarrisKenny.
I hope you are well. If are dealing with something urgent that I can help with, stop reading, give me a call and let me know how I can help.
I’ve been working directly with the owners of a fitness and wellness center with ~400 members in Denver, Colorado, USA. Due to the nature of their business, they are on the forefront of this COVID-19 pandemic response. I want to share we’ve been learning as it may be relevant for your company. I’m confident that what we’re doing is working, despite how difficult this situation is for everyone.
Below is a text message I received from the founder and co-owner of the business (shared with permission):
First there are three overarching concepts I want to touch on, to set the tone for how I’m thinking about this situation.
1. Speed Trumps Perfection: Watch this entire 1:20 clip from World Health Organization Executive Director Dr. Michael Ryan:
Harry Stevens from The Washington Post created a phenomenal–albeit simplified–data visualization that speaks to this.
2. Institutions Matter: Society is made of individuals and institutions. Institutions like families, houses of worship, agencies, schools, and businesses — businesses like yours. As a leader of an institution, you have the power to make an impact right now. For you, your family, your employees, and your community. You have the power to save lives, right now. You are in a position of influence and cannot just wait for others to figure this out.
3. We Are At War: You are now a Wartime Leader. Find inspiration in this classic 2011 essay from Ben Horowitz (of Andreessen Horowitz). Normally I detest these analogies. Business is not war. War is war. See also:
But we are at war with this virus and your business and many lives are at stake.
This is life and death. Certain populations are more vulnerable, but everyone is affected. We don’t know how bad this is and won’t know how bad this is until more testing is done. We are nowhere near a cure or vaccine. The cavalry is us, right now, taking action. If you don’t believe these things to be true, please contact me immediately.
- Goal number one is to Flatten the Curve (credit Julie McMurry, MPH). This is extremely important and the number one thing to be working on right now. Here is research published from Italy that may make this case more clearly anything else I’ve seen so far:
- Paid sick leave for all employees. If an employee is not feeling well, they stay home and receive their normal pay.
- Eliminate physical in-person meetings and use of shared conference rooms.
- Move any employees who can be working remotely to remote work — indefinitely.
- Remote isn’t enough, also consider giving employees time and space to take care of essentials (from Jason Fried at Basecamp):
- Implement social distancing in general. Essential in-facility employees should always be >6’ apart from each other.
- Consider staggering shift times and allowing modular work to be performed in other spaces, like building sub-assembles or parts inspection.
- Recognize a government mandated shutdown may be coming and the more social distancing you can implement and the sooner you can implement it, the safer everyone is.
- Eliminate all non-essential meetings or visits from outsiders, suppliers, prospects, etc.
- Cancel all travel, trips, and anything that requires going to an airport or getting on a train.
Cleaning and Hygiene
- Increase cleaning of all touched surfaces using cleaners that kill viruses and bacteria.
- Increase availability of soap and hand sanitizer. Every time someone enters and leaves, and throughout the day.
- Stop touching your face! This piece by Adam Grant (Organizational Psychologist at Wharton School of Business) explains why it’s difficult to change habits like touching your face.
Awareness and Support
- Make sure all of your employees understand how serious this is. There are many resources on this. Find what you think will resonate in your context.
- Open communication if someone isn’t feeling well. If they contract COVID-19, they must feel safe reporting it. When they report it, provide assistance consistent with public health guidelines.
- Include freelancers and contractors in your efforts, they are connected your business.
Rule of Law
- Customers, suppliers, or employees may gave you pushback and say this is not a big deal. It is a big deal. You are right to take it seriously.
- Make clear that you take this seriously and anyone who fails to work together is jeopardizing the health of others.
- If anyone fails to follow protocols, be prepared to terminate employees and/or customers. This is unlikely but be prepared.
- There are accounts of individuals being discriminated on their race, ethnicity, and actual or perceived country of origin.
- Racism and xenophobia are abhorrent at all times, that divisiveness can be literally life-threatening in these times.
- Enforce strict zero-tolerance policy around insubordination of protocols and race-based discrimination.
For the Days to Come
- Stay in regular contact with your business banker, you may be needing their help with cash flow soon. If you don’t have a dedicated account representative, at least get a point of contact.
- Get contact information for your local Small Business Administration (SBA) resource center, Chamber of Commerce, etc. as there may be programs available soon.
- You may not have looked at your bank account or books in a few days, that’s okay, we’ll get there next. Health first. You’ll be in a better space to get there soon.
- Once time-sensitive health-related actions things are done, we’ll talk about this a lot more. It’s in the next section Cash Flow Risk. Trust me, this is the top concern after health, but health first.
Health and Wellness
- It’s about more than just washing your hands. This could last anywhere from weeks to… much longer. Stay healthy to fight it.
- Sleep is arguably the single best way to prevent getting sick. Do research on sleep health and follow best practices there.
- Exercise and activity is part of maintaining a healthy immune system. Workout at home. Check out Darebee for home exercises when you are practicing social distancing or see if a local gym in your area might be offering something.
- Nutrition, too — sugar, processed meat, vegetable oils, and alcohol are inflammatory and “distract” your immune system.
- Stress causes your body to produce hormones that tax your immune system. Create work-life balance, take breaks, breathe. More from the CDC on managing stress and anxiety here.
- Boost immunity by eating citrus fruits, garlic, broccoli, and spinach. Zinc and Vitamins B, C, and D supplements may help too.
- Get outside. Get fresh air, go for a walk, get some sun. Don’t be cooped up inside — this is not a zombie apocalypse. However do be cognizant of quarantines and movement restrictions in your area. This may not be possible in cities but at least open your window and sit by the sun.
- Stay connected. Social distancing can cause loneliness, fear, anxiety, depression, boredom, anger, frustration, and irritability. The American Psychological Association has research on some of the negative consequences of social isolation.
- Novel Coronavirus isn’t the only thing that can kill you. Don’t avoid the virus and unnecessarily hurt yourself otherwise.
Awareness and Support
- Talk to employees about their child care and food security needs. Assess their situation and know early.
- Ask employees about vulnerable and immune-compromised people in their lives. Follow up and ask about them.
- Know that self-isolation, social distancing, and quarantine can be really hard. Here are some tips you can use from this peer-reviewed study in The Lancet about reducing the psychological impact of quarantine:
- Information is key; people who are quarantined need to understand the situation
- Effective and rapid communication is essential
- Supplies (both general and medical) need to be provided
- Most of the adverse effects come from the imposition of a restriction of liberty; voluntary quarantine is associated with less distress and fewer long-term complications
- Emphasize the altruistic choice of self-isolating
Consider the Children
- My spouse is a psychologist at a children’s hospital and compiled these resources:
- Parent/Caregiver Guide to Helping Families Cope with the Coronavirus Disease 2019 (COVID-19) by The National Child Traumatic Stress Network
- If you only click one article related to kids, click this one. It’s the most comprehensive.
- Guide to commonly asked COVID-19 questions by children under three years old by Rebecca Parlakian.
- ZERO TO THREE is an independent, non-partisan, research-based policy center based in Washington, DC.
- Comic for kids exploring the Coronavirus by NPR Education Reporter Cory Turner.
- Synthesized from interviews with Tara Powell at the University of Illinois School of Social Work, Joy Osofsky at the LSU Health Sciences Center in New Orleans and Krystal Lewis at the National Institute of Mental Health.
- Talking to Kids About the Coronavirus by Rachel Ehmke.
- The Child Mind Institute is an independent, national nonprofit dedicated to transforming the lives of children and families struggling with mental health and learning disorders.
- Parent/Caregiver Guide to Helping Families Cope with the Coronavirus Disease 2019 (COVID-19) by The National Child Traumatic Stress Network
Get on Twitter (But Not Too Much)
- Twitter has been an excellent resource for following news directly from public health officials, scientists, journalists, and neighbors.
- I know, who actually recommends going on Twitter? Me, apparently. As a business owner, you need to be informed by what’s going on and the pace of things is so fast that this can be a good place to turn, with all the usual caveats about misinformation, the panopticon that is digital advertising, etc.
- Don’t overdo it. I’ve overdone it myself. Set hard rules to limit your exposure. Trust me.
- Follow verified and credible accounts: journalists, public and government officials, scientists. Find funny tweets, too…
Engage Your Local Community
- One step I’ve taken that has seriously reduced my anxiety is literally engaging with my neighbors. Start by having a conversation and saying hello.
- For business, connect with nearby businesses and see how they’re handling things. Shared contact information. Build that cohesion.
- For home, connect with your neighborhood association and see what efforts can be made to help your neighbors.
- Follow all the best practices around hygiene, but I’m just saying find a way to talk to them and not be silent and afraid.
- If this virus has made anything clear, it’s that the people next to us affect us. Their well-being is our well-being. We’re in this together.
For the Weeks to Come
Messaging to Customers
- I’m going to get into specifics in the next section for you in particular, but first some general thoughts…
- People are likening the tsunami of COVID-19 emails to GDPR emails a few years ago. Don’t send a generic, five paragraphic email.
- Your customers may or may not need to hear from you right now. If you need to send an update, focus on policy changes and actions you’re taking first.
- Think about if there’s something you can do in particular to serve first responders, healthcare professionals, and utility workers.
This Too Shall Pass
- As one of my clients put it, it’s not like a meteor hit the earth. We can still grow food. We can get through this.
- This won’t be around forever. Business is changing though. This is a new normal.
- Now is the time to start meaningfully re-orienting your business to handle these changes.
- It’s not just obvious “winners” here (e.g. Zoom, CPG companies), every business has opportunity for a place at the table in the future.
- Big picture, the Herculean collective response is encouraging. I like this take from Shervin Pishevar:
Cash Flow Risk
- Help might come from the government, but don’t count on it. Prepare for the worst, hope for the best. People are relying on you regardless.
- It’s time now to get a serious look at current finances, cash on-hand, and gaming out a few different scenarios. You need to prepare for what might come.
- If you have investors, talk to them. See if they are well-capitalized enough to be able to help you out. Or if they may be more patient if they are expecting distributions or performance.
- Talk to your business banker about your current credit card line, line of credit, and net payables. Get comfortable with what’s on your plate right now.
- Start assuming that a higher percentage of your customers won’t be able to pay you back — at least not on-time.
- Identify single source and key suppliers, start thinking about alternative suppliers — they might not be able to supply like normal.
- Start considering your expenses and your obligation to pay them. Employees are typically at the top of the stack. Next are secured creditors, then unsecured creditors. (Laws vary, but this is a good starting point of reference. I recommend consulting with an attorney to be prepared for the road ahead.)
- Hopefully you don’t have to shut the business down, but begin preparing for that emotionally and then take decisive action to try to prevent it from happening.
- Consider ways to manage your payroll expense before getting to layoffs. Odds are, payroll is your single highest expense.
- If you don’t own the building or major equipment, start conversations with the owner now to be in regular contact with them.
- See if customers who are in a better cash position might be accelerate their payments or at least reduce payment terms.
- If you offer gift cards, services, or some other way to get cash in the door sooner, leverage that. Consider offering extra deals available in the future like a coupon book or some way to spread out the payback.
- If you have inventory sitting on the shelf, even if you have to sell it for lower margin or even a loss, if you discount it and convert that idle inventory into cash into the business, it’s an option in a tight spot.
- Identify physical spaces that you can close off to reduce utilities costs, if an area is cordoned off and locked, you can save on electrical, water, cleaning, and more.
- Explore new business opportunities that you might normally say no to because of red tape and all the normal processes you have in place.
Generating Revenue Fighting the Virus
N.b It should go without saying, but don’t price gouge essential items. That’s not what I’m talking about here.
- Supplying healthcare companies and hospitals, making hygienic and sanitary products. This story about Massimo Temporelli, the founder of The FabLab Milan in Italy, is inspiring as they are fabricating essential medical device parts for healthcare providers.
- Supporting first responders/healthcare workers/utility workers.
- This can also include ways to move your services to remote/digital options—like a gym switching to remote programming.
- Identify agencies and non-profits who are engaged and may have resources, it may be something way outside of your core function but if it is a way to get money in the door for your business, take that lifeline.
- Can you switch to an entirely pick-up or delivery model for food and beverage? Are there alternative ways to prepare or handle food that can minimize human touch?
- Are there investments you can make to transition to touch-free digital payment processing?
- Understand that immediately, your prospects might not be ready to continue conversations. Contracts right at the finish line might be put on hold. Use technology (like CRM software) to keep track of these deals and get new conversations started and in the pipeline.
- Focus all your conversations on your customer. The world is consumed by chaos right now. Be that calm presence, presenting solutions that can help. Everyone needs helpers now.
Adapt Your Go To Market
- Ways that your business can support this new normal…
- Can you help foster distributed use of your technology, if it’s currently shared? Can employees buy your equipment for home?
- Do you offer a more sanitary way to do a routine work activity that your customers do?
- Can your product help companies save on cash flow, be more efficient, save money, or other constraints they’ll be dealing with?
- Do you offer a service that can replace concentrated office work, making it easier for clients to get work done?
- Identify related service offerings or areas that you might be able to combine for your clients, such as rapidly standing up a remote software development team.
- If you’re in a fitness-related field, consider offering home delivery of nutritious food utilizing bulk buying power and working directly with local rangers and growers.
- This is a time for adaptation, evolution, and survival.
- The impact of this virus is not evenly felt. Some countries are recovering, others are still in early days. This can also change very quickly, as we have seen.
- Think of ways that expanding and diversifying your business through international markets can help you weather the storm.
- For countries that are in crisis, if you have partners there, find ways to support their efforts. Be lenient on payment terms. Extend credit if you are able.
- You don’t want to have all your eggs in one basket. And if you do, start finding other baskets!
Changing How You Operate
- Start evaluating alternative technologies that you can adapt — both in your workplace and in your products.
- In your products, evaluate audio, gesture, and other non-touch technologies for building access, product operation, and more.
- In your workplace, overall communication and go-to market methods that may currently be heavily dependent on in-person interactions.
- Consider your overall supply chain, design, and cash management philosophies.
- Using local suppliers and having secondary and tertiary supplies is less efficient, however is also less leveraged for times like this.
- Using common/standard parts and open source can lower your risk in times like these.
- Move to having more free cash available, a rule of thumb I’ve heard is striving to have 18 months of runway in the bank. I know, that’s a long time and it’s obnoxious to bring it up now.
For Your Business
I’d also like to touch on some specifics for your business and what I think this looks like for you in particular…
N.b. In this section I’ve shared specific guidance for current clients. If there is interest from readers in seeing what that guidance is, let me know and I will ask my clients if we can share that information anonymized.
For the Future
We’re going to get through this. Good companies are created during times of crisis. Good companies also fail during times of crisis. We don’t know what will come next, but damn if it isn’t worth the fight. So don’t despair.
It was a privilege working with your team through normal times and I look forward to working with you to navigate this new normal. If we get to a point where cash is tight, let’s have that conversation then. I’m here to help.
Let me know when you are ready to talk,