The COVID-19 pandemic is unlike any public health or economic disruption we have ever faced. Entrepreneurs are being forced to navigate a host of new and ever-changing business challenges. Dan Olszewski and Singari Seshadri provide advice and practical approaches to help entrepreneurs and small business owners survive the current environment and position their company to thrive in the future.
Health and economic uncertainty is high, which makes planning exceptionally challenging but presents the opportunity to scenario plan. Run through two different economic scenarios so you can see how your business would perform. Considering multiple scenarios will reduce the chance of being blindsided or surprised by any unwanted outcomes.
Another helpful tactic is to imagine your business a year from now. If you looked at your cash flow statement, would there be 3-5 items you wish you wouldn’t have spent money on? Think about where you can make spending cuts to allow for a larger cash reserve.
When thinking about the headcount at your business, start with a hiring freeze before layoffs. Ask yourself if you can increase non-cash compensation or reduce non-essential benefits and perks for employees. If you do have to explore furloughing or laying off employees, try to only have one round.
Survival is critical, but looking beyond the crisis is equally important. While there will be a time when this crisis is behind us, it will take a while and the world as we know it will look completely different.
This is a good time to pivot. Your business will enter a new chapter after the crisis is over. Customer behavior will change. Try to understand your customers’ shifting needs and behaviors. It will be crucial to know how they are behaving and how they are expected to behave in the coming months. How can you as a business adapt to those needs?
Strong leadership is the single most important skill in the coming months. COVID-19 will be the greatest test of your leadership skills, and how you act can make the difference in whether your business survives in the long term. Know your stakeholders. Understanding their needs and concerns and how this crisis is impacting them will help you know how to communicate clearly, transparently, and often.
Dan Olszewski is the director of the Weinert Center for Entrepreneurship at the Wisconsin School of Business. Over the past 14 years he has taught thousands of students and is the recipient of various school-wide teaching awards.
Singari Seshadri is the head of the Stanford Venture Studio, an entrepreneurship hub for graduate student entrepreneurs that supports and advises hundreds of founders and early stage startups every year. She also leads diversity initiatives for Stanford Graduate School of Business’ Center for Entrepreneurial Studies to empower women and other underrepresented founders.