As an entrepreneur, I like to keep a broader eye on what’s going on in the world as it informs my business’s strategy and helps me to prepare for things happening wider that could affect my business. I’m all about being proactive instead of reactive, and this approach keeps my ever-present anxiety down.
The current ongoing COVID-19 epidemic/pandemic feels like a fairly unique time, something that only happens a few times in one’s lifetime. If it continues to spread like it currently looks, then we’re potentially entering a “black swan” scenario economically and in business.
A black swan event, for those not familiar with the term, is defined this way by Investopedia:
A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight.
Some of these include the 2008 recession and the 2000/2001 tech bubble pop. Both of these had wide-sweeping ramifications across the global economy, people’s lives, and the business ecosystem.
Because I believe we are approaching this sort of moment and will look back upon the first half (hopefully it’s contained to that) of 2020 as a black swan time in retrospect, I’m taking necessary precautions both personally and professionally to navigate this time and to come out stronger on the other end.
I’ll talk about both in here, because as an entrepreneur your personal life is inextricably also tied up in your business life. The most successful people I know never talk about “work life balance”, but rather “work life integration”. As a self-employed entrepreneur since 2015, I’ve come to accept the reality of work life integration and thus can’t separate the two.
What I’m doing as a person
I am an individual, a husband, a father, a friend, an entrepreneur, an employer, and a resident of my city. All of you are some similar combination in your own way.
As such I try to consider the ramifications my actions have against those with whom I regularly interact.
Because of that, I’m taking the following steps.
First, I’m closely watching my own health and trying to keep myself healthy. We’re entering into spring in Denver and along with that comes seasonal allergies (which I developed around the time I turned 30). So, in my opinion this time calls for an abundance of caution.
I’ve personally made the decision to not go to the office for the foreseeable future, and of course my hand-washing has gone to new heights and I’ve become much more aware of places where someone else’s germs could come into contact with me and my family.
I’m not “self-quarantining”, but I am limiting exposure to others out of an abundance of caution. I’m washing my hands thoroughly before playing with my daughter and doing all I can to limit exposure. I’ve already been much more mindful of public door handles and been doing things like taking an extra paper towel from a public restroom to use to open doors that are a pull instead of a push to open.
My take is that if it all turns out to be nothing, then I’ve gotten more time at home and did what I felt was right. And maybe it’ll give me the time to finish this book I’ve been working on for a few years now.
If CV-19 turns out to be worse than expected, then I’ll know that I did as much as I could personally to protect myself, my family, and my broader community.
Both of those are scenarios I am happy with.
What I’m doing as an entrepreneur and business leader
My approach as an entrepreneur is slightly different.
When you look at the history of business, black swan events and broader macro-economic shifts tend to lead to a few things:
- Businesses that were shaky or propped up by outside capital tend to contract and stop spending obscene amounts of money, and many fold;
- Innovation occurs at a higher clip out of necessity;
- Customer acquisition gets markedly cheaper for those who have been running a profitable business who have a war chest of profit.
My official stance right now, and to Credo’s customers, is “Wait and see”. I’m playing out different scenarios in my mind that could happen, and being prepared for whichever one happens to take place.
If nothing major shifts, then we were prepared in case something did and are better prepared for the future when something does.
If something major shifts, then we’re prepared for it.
Either way, we’re prepared.
I am also taking the following actions:
- Making sure I understand our own numbers so that I make sure we are not spending in areas where we should not be. This is good practice anyways and something I try to do quarterly.
- Where there are areas that I can see my competitors potentially pulling back in and I was being conservative, doubling down and increasing that spend. We have a good profit margin right now and cash in the bank, so it’s time to be greedy when others are fearful.
- Making sure I am communicating with Credo’s customers to see how we can continue to help them out and providing perspective on what we are seeing more broadly in regards to budgets and shifts.
Basically, my approach and my advice to others boils down to this:
- Get a handle on your business’s numbers. If you’re not profitable, then get profitable. If you are profitable, then see where your current expenses are unnecessary and cut them;
- Watch your competitors and see how they react to broader events. As an example, if they were paying to be put on top of a list of [best (keyword)] searches on a site like G2/Capterra and now they have cut that spend, you could probably get that same spot at a pretty severe discount as those businesses try to keep at least some revenue coming in the door;
- Look for new ways to keep adding value to your existing customer base. Keep retention up by continuing to add value. When things settle down again, your product/service will then be immensely more valuable and you can charge for that additional value (up to you how you handle grandfathering etc).
Overall I still think we are in a “wait and see” scenario, not sure which way it’s going to break.
If like me you like to hope for the best and be prepared for the worst, and are business for the long haul instead of a quick buck, you’d be wise to get your business fundamentals solid and spending under control so that if the time comes, you’re positioned well to take advantage of an opportunity.