During this time of economic uncertainty, we want to make sure that we provide everyone with real talk and give some actionable examples of some of the strategies that we have been executing and implementing within our firm over the last few weeks in real-time. It helps that I was a CPA and a business owner through the last recession of 2008 as well, and I’ve been leading Fusion CPA and our client’s business advisory for the last decade.
Watch the video or read the blog
I will touch on:
- Sales & Marketing
- Finance
- Operations
Then we’re going to wrap up with a glimpse at a sample Timeline for the rest of 2020 given our current economic environment.
Sales & Marketing:
When COVID slapped the United States in the face, most of us had a gut feeling that our sales teams were going to have a hard time closing new business. However, the important to note that these gut feelings need to be balanced with data.
On a recent client call Steven Sumners, one of our Senior Tax and Accounting Managers, noted the fine line of both over-reacting and under-reacting to gut feelings. A potential overreacting gut feeling for many entrepreneurs may be layoffs and furloughs across the board. A potential underreaction could be avoiding the hard conversations and real talk with employees only to max out a line of credit to support un-productive teams. This could lead to a Financial & Operational downward spiral.
So what’s an example of us balancing data and gut feelings in real-time?
- We looked at some Sales KPIs with one of our clients the other day. We found the inbound calls to the company’s mainline had dropped from averaging 15-20 new calls per day to only 3-5 new calls per day. Meanwhile, support tickets & new client FAQs doubled.
So what action items could we take?
- The First action item in agile execution methodology was that we froze the outsourced call centre they had. We then forwarded incoming calls to one of their Customer Success Managers who now has the capacity to take them.
- This adjustment will equate to an annualized savings of $10,000
- Note, that once this inbound call KPI starts to go back up, they will be re-activating the call center. The call center knows this because the ROI for the call center is actually tremendous in a Growth Cycle. It’s Transparency and Real Talk with everyone both internally and externally.
- The Second action item is that we froze new hires in the Sales & Marketing dept, and simultaneously changed part of the Sales Team’s Weekly & Monthly Recurring Revenue KPI to incorporate some of our internal customer support initiatives.
- Again, these are fully intended to be Short-term moves to stay lean in weathering the storm for everyone involved.
Finance:
Finance is a lot about real talk as well. In both Growth Cycles & Downturns, we speak a lot about monitoring A/R & Labor Productivity. Right now it is a no brainer to be micromanaging your Accounts Receivable on a weekly basis at this point, if not daily.
With one client we just found this as a perfect time to finally mandate that all of his customers go on auto-draft, which will help greatly minimize his Accounts Receivable. After all, there is no one physically at his office to even pick up checks and deposit them at the bank, if they wanted to. Fortunately, only one of his customers refused and wanted to keep paying by check and of course, they have parted ways
In regards to labor productivity, a lot of entrepreneurs employ a large bench of Contractors. Most of the time those contractors come at a premium in regards to their cost of labor. When that happens, we’re sacrificing profit margins due to their specialization ability which can be great in Growth Cycles but may not be as needed in a Downturn.
An action item in agile execution methodology is that it’s a great time to think about consolidating Contractors with full-time employees. This is not only to increase profit margins but to also keep your core team at as much capacity as possible.
Operations:
Riding the wave of entrepreneurial-ism is much more evident when I have I have clear expectations. As you know, we are close to the end of Q1, and in the first quarter, a lot of our clients and the economy had an economic uptick with high-revenue growth and new hire goals for 2020.
So now as we are heading into Q2 essentially with the market freeze it’s Get Lean Time. It’s time to readjust our Weekly and Monthly KPIs along with our Quarterly Rocks. It is also time to pause spending, travel, events, etc.
In Q3, the hope is that the market will stabilize at least for small businesses. However, we still want to Stay Lean during this time. The ideal is that as the market and revenues go up, you should be able to make up for lost revenues that we may have experienced in Q2.
If the market continues to stabilize in Q4, we will want to remain lean and essentially rinse and repeat what we have been doing since Q2 and Q3.
I hope this information was helpful to you. If you would like to connect with me to discuss how we can help you have more Agile Execution in this economic downturn, click the button below.
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