Defend Truth


A letter of caution to entrepreneurs in tough times: Prepare for the fight ahead


Nic is an obsessive entrepreneur, global keynote speaker, and published author. He has been building business since the age of 16 and has sold three businesses in the past decade. Currently, his work focuses on helping businesses build a more curious culture to promote innovative thinking and results.

If you run a business of any kind you should be paying close attention to the movements of the Covid-19 pandemic, and you should be preparing for tough times.

Building businesses is tough. I’ve said this before and I’ll likely be saying it for the rest of my life. At the best of times, building a new business and keeping an existing one afloat is very, very difficult.

There are people who will constantly tell you that this is not true. Investors, advisers, other “brave” entrepreneurs and many others will promise you that this is the time to grow and make it big. They will tell you that if you are a real entrepreneur you don’t experience or feel the hardships and pain and if you do feel it then you can and will most certainly find a way out because that’s what entrepreneurs do.

Entrepreneurs find opportunity in strife. We see solutions where others see problems. We see profit when others see pain. We are glass half full kinds of people. These things are all true but they are not always true. 

I want to address the microscopic elephant in the room, Covid-19. 

I am not an expert on the topic. I am, in fact, a medical moron. Do not listen to anything I have to say about the actual virus itself, please refer to the experts for proper information. 

The pandemic is ripping through the world and the world media. It’s everywhere, literally and metaphorically. You can’t escape this little bastard. Visit Twitter, Insta, FB, TikTok, news outlets, podcasts, newsletters, radio stations, television and anywhere else and all you’ll get is Covid-19 updates and news. 

I gave a keynote address at a conference in Johannesburg recently and the virus came up constantly. I also sat on a panel and one of the questions focused on the current small business climate in the face of the virus and other calamities around the world. I try to be honest when I answer this kind of question because the truth helps us prepare more effectively. 

Here’s the short version of my view on the current outlook for small businesses in South Africa and around the world: It’s going to get really bad before things begin to normalise. 

Here’s the high-level situation that we are facing in South Africa right now: 

  • Rolling blackouts across the country;
  • We have officially entered another economic recession;
  • Water shortages and droughts in many cities;
  • Veld fires sweeping through Cape Town and other regions;
  • Covid-19 destroying tourism and restricting standard levels of spending that maintain our dire economy;
  • Political unrest and a failing ruling party;
  • Corrupt and bankrupt state-owned enterprises; and
  • Rampant crime and corruption throughout the nation

It is in the nature of an entrepreneur to look for positives to justify our disposition as optimists. It helps us get up every day and keep going to find opportunity. One positive right now is that our president finally showed himself to be the kind of leader that our country needs by announcing measures to try and prevent the spread of the virus in South Africa. Read this summary from the Daily Maverick to understand the steps being taken. 

But here’s the rub; blind entrepreneurial ignorance is not going to pay your rent and eternally optimistic platitudes are not going to magically garner more sales and increase profit margins when your country goes on lockdown.

If you run a business of any kind you should be paying close attention to the movements of the Covid-19 pandemic but you should be preparing for tough times. For small businesses though, things have been getting more and more difficult over the past 10 or so years in South Africa. Yes, of course, there is opportunity but there is also a lot of discomfort. 

Some businesses are able to react quickly and move into the digital realm. Others will not be so lucky and this is the heartbreaking part for entrepreneurs. Many businesses are going to go under whether you make the hard choices right now or not. 

To help you plan, I have made a list of things that small business owners need to start doing right now to prepare for the rough six months ahead of us:

Know your finances intimately

Make sure that you understand your expenses and financial commitments. 

How much money do you have in the bank? 

How much is leaving your bank account by the end of the month?

How much is coming in?

Can you get a discount on your office rent?

What other expenses can you cut or mitigate?

Assess your team

This is a tough one. Some of your team may need to be let go. Some of your team might need to work fewer hours. Some of your team may have to take salary cuts to keep their jobs. 

Make the hard decisions quickly and work to implement the changes as soon as possible. 

If you want your business to survive then the hard choices are the right ones, especially when it comes to people. 

Get back to basics

Focus on the basics of your business. Don’t worry about your 10-year strategy right now. Make sure that your cash flow is managing. Make sure that you give the best customer service you can give. Ensure that your product delivery is amazing. Continue to win over your customers every day. Remember, they’re also having a difficult time and anything you can do to make it better will go a long way. 

Make the shift to digital

Can your meetings take place online? If they can, do this immediately. Start showing the world that you are a leader in the pivot to digital business. 

Can your product or service work in a world that limits physical interactions? If not right now then how quickly can you make that happen?

Can you unlock a new market somewhere else using online methods? Think about every aspect of your work and your company and decide if it can move to a digital space. 

Sell, sell, sell

Selling is an art and one that you need to master if you are an entrepreneur. Now, more than ever, you’re going to have to start selling as if your life and business depend on it because they do. 

If you aren’t reaching out for new business then you are behind the curve. Sure, people are going to be holding on to their money now more than ever before but that shouldn’t stop you from trying. At the very least you’ll gain new customers when the panic settles down and normalcy returns.

It’s also a good idea to start diversifying your sales channels. Do you use Adwords, LinkedIn ads, Twitter, Facebook, TikTok and other platforms to promote your business? No? Then get started. 

Start doing video sales calls to customers across the world. 

Do not depend on one customer. If they don’t pay you, you’re screwed. 

Don’t try to build new products

By the time you finish building new products, you’ll be dead in the water or the crisis will have calmed down. 

Focus on your existing products and even consider cutting down and focusing more. Pick your best performing product or service and double down on it. Gain more traction, eke more sales out and open up new markets. Unless you have products in the pipeline that are primed to launch you should not be looking at anything new for the next few months. Just hunker down, cut expenses and promote existing products and services. 

Get paid

Now is the time to get over your anxiety of debt collecting. Small businesses are always at risk with prolonged payment terms and big businesses that just pay slowly. 

Right now you need to start calling anyone and everyone who owes you money. Get paid immediately. Don’t wait and don’t take no for an answer. Call in every bit of free cash you can because you are going to need it. 

Forget about the payment terms on the invoice, call the customer and ask if they can pay sooner or immediately. 

If you prepare right now, starting today, there’s a chance that you can thrive in this climate. But if you wait you are going to suffer. Six months of bad sales will kill your business.

It’s never fun to think about bad things and difficult times but building businesses isn’t always fun. You have to choose; do you want to be polite or do you want your business to survive? 

I opt for survival every time. BM

Nic Haralambous is an obsessive entrepreneur and keynote speaker. Sign up for his newsletter or follow him on Twitter.


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