Separating the information from the noise. Fact from fiction. Simply and concisely.  

In this Issue:    

  • Back to work?  What does that look like?
  • Bermuda ReSet
  • The 10%

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5 ways to keep your business afloat

It’s official. We are in another recession. According to Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), the downturn this time around is going to be as bad or worse than what the world experienced in 2009.

As an entrepreneur, this is bad news. As it is with any downturn, we can expect a lot of job losses and pay cuts. This inevitably leads to a drop in customers' purchasing power, which, in turn, impacts your business, leading to further layoffs.

While it will be nearly impossible to get away from this unscathed, businesses may take a few steps to mitigate losses. Here are a few tips to consider.

1. Put business interests first.

2. Provide more value to your customer.

When the economy is not doing well, customers tend to cut down on their expenses. Even if you offer something that they cannot do without, customers tend to reduce consumption, and this affects your top line. For instance, households may cut lawns less frequently, or go to cinemas less.

One way to mitigate lower revenues is by offering more value for the money you get paid. For instance, a cinema may offer free popcorn to their customers. Or a barber may offer unlimited haircuts for a flat annual fee.

When you pack more value into your product or service, customers tend to stop viewing your offering as an expense and start acknowledging the savings they make. While this may not be enough to grow your customers in a downturn, it may be nearly enough to retain at least your loyal base.

3. Collaborate with upstream and downstream providers.

It’s worth reiterating the two ways average customers cut down on expenses. First, they chuck out any expense that they can live without. Movies, take-out and multiple streaming subscriptions may all fall under this category. Secondly, they reduce the money on things they absolutely need. Groceries and fuel are good examples of this.

Partner with people who offer services that are upstream or downstream to what you provide. Take the example of a business making mobile phone cases. Businesses in the upstream include mobile phone makers, while those in the downstream include stores and platforms selling these phones and accessories to customers.

Going back to the previous section on providing more value, a mobile phone maker might offer free phone cases. It's a good value trade-off that benefits both the phone maker and your business. This strategy works exceptionally well with software and app builders that can be packaged into the phone OS and be activated straight out of the box.

4. Innovate with pricing offers.

This is one of the most effective ways to retain your customers in a downturn. Pricing innovation must focus on two specific objectives: making your offering more affordable to the customer, and improving your own cash flow.

Consider partnering with services like Zebit, Splitit,or Klarna, which allow buyers to pay for your product or service in smaller installments. This makes your product more affordable to the buyer. If you are making use of a service that enables split payments, just make sure the service still pays you in full upfront.

Depending on your offering, you may also consider switching from charging licensing fees to monthly subscriptions.

But be aware that the solution you pick may impact your cash flow. For example, with a license fee, you make your money upfront. With a monthly recurring fee model, you may have to rely on payments made over time. Depending on your capital investment, this solution may or may not work.

Another way to improve cash flow would be to create incentives for customers who pay upfront. For example, if you are a SaaS service provider, you may offer a free month to customers who pick annual billing over monthly billing. This is a win-win for both the customer and the business.

A downturn is difficult for everyone: the business owner, her employees and customers. Just remember that the economy always bounces back. Even with the current outlook, the global economy is expected to turn over by next year. Hence, your focus should be on survival. Do everything in your power to ensure you're not among the hundreds of businesses likely to close shop.

4 Ways to Help Your Business Recover from COVID-19

The coronavirus is affecting all businesses and industries in unprecedented ways. Preparation is key in circumstances such as this one. You must recession-proof your business and prepare to recover your business from the effects of COVID-19. Use these 4 tips to prepare your business today.

1. Prepare for Increased Demand

Many businesses are suffering from a lack of customers due to lockdowns and quarantines across the country. As a result, sales are declining and revenue is dropping fast. Many companies are choosing to decrease their production and supply levels in order to prevent further financial loss. While cutting back will help to alleviate some of the financial stress, be sure not to cut back too far.

While the United States hasn’t begun to ‘flatten the curve’ just yet, other countries have, including China. Because these countries are in a sense ahead of us in sense of the progression of the virus, we can look to them as a guide for what will most likely happen here in the coming weeks or months.

Businesses in China are showing that the economic recovery for businesses after the effects of the coronavirus begin to lessen is coming along at a rate much higher than most predictions. With this in mind, it is necessary to prepare now in order to best benefit in the future.

As we said, cutting back on production is beneficial from a cost standpoint, but don’t do such a high level of cutbacks that your company is unable to bounce back and meet the increased demand once we begin to flatten the curve here in the U.S. We can only predict how the American economy will recover from the coronavirus, but preparing is essential.

2. Create New Sales Channels

One thing that many businesses are learning due to the massive shutdowns caused by coronavirus is the ultimate need to have multiple sales channels. Non-essential businesses that have only one sales channel, such as customers coming in-store to a brick and mortar location are struggling. With quarantines and lockdowns in effect for weeks and now months in some places across the country, those businesses with few sales channels have very little if no revenue.

This is why flexibility is important for any business. The easiest way to create a new sales channel is to market your business online or create an e-store. Your shoppers may be confined to their homes, but some of them are still are making purchases, just online.

The restaurant industry has truly embraced this idea. With channels such as Waitr, DoorDash, UberEats, and Postmates, restaurants are earning a profit, even with empty dining rooms. Restaurants have combined these food delivery platforms with call-in orders, drive-thru, and takeout, making all types of customers able to continue making purchases.

Once you do create new sales channels, don’t forget to broadcast and market it. Using the restaurant example again, you’ve most likely seen a ton of “We’re Open” or “Take-Out and Delivery Only” in front of the local restaurants in your neighborhood. These businesses have adapted to the current situation and are letting their customers know.

3.Consider Your Clients

The effects of the coronavirus are affecting everyone, including your customers. As a business owner, you must consider how your customer’s needs have changed and how your business can provide for them.

For example, Dexcomm is a premium answering service. Usually, we provide after-hours, weekends, or additional support in answering calls for businesses. Prior to the coronavirus, our clients needed us to be there as an extra set of hands, ready to answer calls when they couldn’t be there or were overwhelmed. Now, as we are all adjusting to the effects of COVID-19, we can understand that the needs of our customers have changed.

Instead of just requiring after-hours or weekend call answering, our clients could need more. With social distancing orders and many businesses having to close, our clients need someone to answer their phones and provide their customers with accurate information throughout this difficult time. With this knowledge, we are able to reposition ourselves and our services in order to be helpful to these clients.

4.Continue Working on Leads

With so much uncertainty and caution due to the virus, it may seem reasonable to abandon and leads you were working on prior to the pandemic. This may be necessary for some industries, but not necessarily if you work in business to business sales.

While individuals are canceling vacations and airline companies are canceling flights, businesses are still maintaining their typical services for now.

If you have large leads in the pipeline, continue to nurture them. Address the current situation, and put even more energy into capturing these leads. By letting them know how your company is handling the current situation, you prove the adaptability and value of your business.

Key Points

While we may not know how the economy will recover from the effects of the current epidemic, we do know how businesses can recover:

Prepare now for a probable increased demand

Remain flexible as a business by creating multiple sales channels

Consider how the needs of your customers have changes, and provide for them