Cash & Confidence
Having been through economic trials before and dealt with them well and not so well, I have accumulated a lot of experience on what to do in the situation we are in right now. I am not an economist so I can’t predict the future any more than economists can, who also don’t have a great track record over the last couple of decades. Neither am I a counsellor and certainly not a phychologist. This article is written from the perspective of one business owner to help another.
Take the parts that are helpful, disagree with the bits you don’t like. These are just my observations and an attempt to help you if this all feels rather scary or uncertain.
This article relates to any form of downturn really, but it is specifically relevant today to the #Coronavirus (#Covid19). It is in relation to marketing and I suppose any activity that will have a longer term benefit rather than immediate, in times of immediate financial pressure.
I have written a second article that should accompany this one and deals with mindset. Mindset plays a huge part in these times. This however is a more practical article and the confidence mentioned doesn’t relate to how ‘confident’ you are as a person!
OK, so let’s pose the article in the form of a common question ‘Should I stop my [marketing]?’. Of course, replace the term [marketing] with any other expenditure that could be stopped with no negative effect in the short term, but could affect the long term.
The first question you need to answer for yourself is, ‘in what timeframe am I confident that things will return to some kind of normal?’
Be clear here that if you think ‘things will never get back to normal’ then this is a mindset issue and read my other article. Things will be back to normal sooner than you may ‘feel’ currently. The question though is how long do you feel it will be? Listen to the experts and you will get a multitude of different opinions, so the only sensible thing to take from that is all of it is someone’s gut feel. What is your gut feel saying?
Then, do you have, or have access to the cash you need to bridge that gap?
If the answer to that is ‘yes’, then do not cancel your marketing or whatever else it was you replaced the word marketing with. The short term gains of less outgoings, will cost you in the long run. If you continue now, you will reap the rewards when everyone else is failing right at the point that we are coming out of the situation.
Think about it. Your audience hasn’t gone away. They are still looking for you, they just cant spend with you right now as they did. Do you want them to spend with you or your competitors when that changes? When it changes, will they remember you or your competitors? You will stand out more when your competitors run and hide. You therefore get more for your marketing effort/budget. You just don’t get it straight away. Hence the ‘confidence and cash’ theory.
If the answer is ‘no’ (you don’t have the cash to stick it out), then you have to see what you can do to change that. One thing I believe you shouldn’t do is to ‘not’ make a decision. Which ironically is a decision to roll the dice of luck. I also think that hedging bets here is dangerous. I say that because the lack of committing to a plan causes more stress than anything else.
If you really can’t find the cash, then you need to consider whether your business can continue before spending on anything. You may need that last bit of cash to get you through until a job becomes available. Now, that may be brutally honest, but the reality is that most businesses go bust coming out of a downturn, not going into it. If you have turned the lights off for a period, when you see people out in the streets again, it is often too late. They are walking past you to see your competitors that did manage to keep the lights on.
Running a business is tough. It requires you to put everything on the line. I once read that ‘entrepreneurs live a life that others wouldn’t so that they may achieve a life others couldn’t.’ Well, this is that moment.
I hope that this has helped to clarify your thinking on whether to switch off those things that won’t help you in the short term, but will make a massive difference in the long term.
During the last big recession, I increased our own marketing. I did it to an extent that I was very uncomfortable with. However, whilst others were still reporting hardship and some going out of business, we came flying out the other side far stronger. In reality, the recession lasted far longer than my original gut feel, but I then moved to the phase where I did whatever to keep the ‘marketing’ lights on. When people came back out into the streets, they knew where to find us, because we had never gone away and there were fewercompetitors blocking their view.
We are doing the same right now. We committed additional resource and budget to make sure we were more visible at a time when we fully expect that fewer people will be in a position to buy. Why do that? Because it is the only sensible business decision in my view and I have seen it work before in the hardest of conditions.
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