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Business Expenses to Re-Evaluate During an Economic Downturn

Posted: 04 Jul 2020 10:37 AM PDT

By Drew Page

There is perhaps no time more important for business owners to know where their operating expenses are coming from and how to remain solvent than during a crisis. The unprecedented nature of COVID-19’s impact on the global economy cannot be overstated. The economic impact will likely be felt for years to come, but businesses that implement fiscally responsible practices can survive, and even thrive, in this environment.

In fact, throughout the period of quarantine, many businesses have done some self-reflection and realized that many of the things they thought were necessary operating expenses are actually not necessary at all. It appears the methodologies behind the "lean startup" are starting to permeate into every business and industry that takes part in this global economy.

Management expenses that should be trimmed

It used to be, business deals were done face to face, and that was that. We sent our employees on business trips, writing off the expenses as the cost of doing business. Today, however, the business world is realizing the effectiveness of remote collaboration tools, and the thousands of dollars that would otherwise be spent on a business trip can be used for other, more productive purchases.

And that’s just the tip of the iceberg. Let's take a deeper look at some management expenses that most businesses could reduce, if not eliminate entirely:

Expensive office space: One of the largest figures in the liabilities column on most small business balance sheets is leased office space or other real estate arrangements. In some business models, this expense cannot be avoided, but in most, it could at least be significantly reduced from current levels.

Many businesses are continuing business as usual throughout the quarantine and realizing productivity can still be maintained, even while employees are working from home. There are examples of entirely distributed companies being built successfully, proving our world can maintain current levels of productivity while working remotely.

If eliminating rented office space is not ideal for your particular business, one strategy to reduce the financial burden is to implement a desk sharing system where some employees can work from home a few days a week, while the alternating employees use the desk in the office.

These arrangements can slash the space requirements needed for your business while still maintaining some face-to-face interactions within the company. This could be the balance that your business needs to boost employee morale without sacrificing productivity and collaboration.

“Technical debt”: Any decision that makes long-term sacrifices for short-term gains is a poor business strategy. Technical debt is when you accept subpar solutions that are easier and less expensive to implement, with the knowledge you will need to invest more time and money in the future to fix them. Just like financial debt, it can be an easy short-term decision to take on large quantities of debt, but this will almost certainly come back to haunt you in the future.

Instead, take the time to explore alternative options and external solutions and services that could adequately fulfill your needs without willingly taking on technical debt.

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Human resources and the cost of losing great people

Your human capital is some of the most precious assets on your balance sheet. In times of crisis, many employers look at the salaries they are paying out and assume these must be the first to go. This can lead to rounds of layoffs where top performers are let go and the figurative baby is thrown out with the bathwater.

Renegotiate compensation structures: Instead of letting your top talent go and potentially work for the competition, try to renegotiate the terms of their employment at all costs. For example, if your sales team would be willing to work for a lower base salary in exchange for a higher commission, your top reps may actually prefer this structure. This compensation structure will also help identify and reduce any employees who don't belong in their hired role. For other crucial roles within your company, consider hiring top-performing contractors or freelancers.

Lavish perks: We've all heard the stories from the Googleplex: free gourmet meals at all hours of the day, on-site child care, laundry facilities, and much more. While most businesses don't take the perks to this extreme level, it's possible your business is wasting money on unnecessary ones.

Some perks have become staples across nearly every business and industry, like 401(k) matching, healthcare coverage, and snacks and drinks. Consider which perks are positively impacting your company culture, and ask your employees to vote on their favorites and make compromises. It's likely most employees would agree their 401(k) matching is more important than a few bags of potato chips.

Even a temporary pause on all perks, 401(k) matching included ,would be warranted (and widely accepted by your team) in the current economic climate, especially if it can justify postponing or avoiding layoffs altogether.

Adapting to the new normal

Businesses must pivot and stay agile during any economic environment. As the world shifts to accommodate the new normal after the 2020 global pandemic, we will learn from our experiences and build stronger companies moving forward.

It's up to us to navigate this new normal—the entrepreneurs, the owners, the operators, the employees—and to create better products, services, and businesses in the process. We are all in this together and applaud everyone doing their part to save jobs and companies.

RELATED: What Advice Are Venture Capitalists Giving to Startups in Light of the Coronavirus Crisis?

About the Author

Post by: Drew Page

Drew Page is a content marketing lead from San Diego, where he helps create epic content for companies like Embroker. He loves learning, writing, and playing music. When not surfing the web, you can find him actually surfing, in the kitchen, or in a book.

Company: Embroker
Website: www.embroker.com
Connect with me on Twitter and LinkedIn.

The post Business Expenses to Re-Evaluate During an Economic Downturn appeared first on AllBusiness.com. Click for more information about Guest Post. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

How to Have Better Customer Conversations During the COVID-19 Crisis

Posted: 04 Jul 2020 09:50 AM PDT

The COVID-19 crisis has caused so much disruption and uncertainty for everyone in all aspects of work and life. When talking to customers, it can be hard to know how to strike the right balance between acknowledging the crisis and focusing on business. And especially if customers' businesses have been affected by the crisis or if buyers are more reluctant to buy, it's important to know how to approach those customer conversations in a compassionate way.

Sometimes it's okay to blend business and personal with your customer conversations, especially during a time of widespread stress, grief, and uncertainty. Here are a few tips for having better customer conversations during the coronavirus crisis. 

Don't ignore the news 

COVID-19 has caused a massive shift in everyone's priorities and daily life experience. We've seen examples of this from every corporation in America and everyone on LinkedIn: everyone is commenting about the crisis and sharing stories of how it's affecting their business. So don't assume that your sales conversations with customers have to be strictly about business. Start out the conversation by just asking the customer how they're doing, how they're coping with the latest news. You don't have to be afraid to acknowledge the crisis that we're all in. 

Most customers will probably appreciate you being candid and willing to talk about a situation we're all going through. At times of crisis, customers may even be more skeptical of salespeople who are not acknowledging the bigger situation and circumstances. 

However, you don't have to dwell on it; don't spend the entire call talking about COVID-19. Try to keep the conversation light and optimistic. You might want to say things like, "Obviously, these are crazy times! How are things going with you and your business so far?" or "It's been awhile since we talked; the situation has been difficult, of course, but in the last month, my company is starting to enter into a kind of new normal, and I would love to talk with you. How are things on your end?"  

Talking about the crisis in terms of a shared experience and a common adversary can help your customers feel like you are on their side, like you are both on the same team. You're not trying to sell them something; you're trying to help them overcome a crisis that is affecting everyone on Earth. 

Listen with empathy 

Every customer conversation right now needs to put empathy at the forefront. More than ever, be sensitive to what your customers are going through. Be patient. Be compassionate. Be willing to just listen and sit with them for a minute on the phone—they might not be ready to buy, they might not have good news for you, they might not even be happy to hear from you.

Everyone is going through a lot of emotions right now. You may be calling customers who have had a family member die of COVID-19, who may have the virus themselves, or who may be at higher risk for it. Your prospect's company might have taken a huge hit and could be struggling to stay in business. 

Whatever your client is going through, be willing to listen and show that you care—not just as a businessperson, but as a human being. 

Show vulnerability 

This crisis has been so all-encompassing, and it has hit so many industries hard. Your customer conversations might be a good opportunity to share your own story. Not in a sad way, not in a “woe is me” tone of voice, of course, but just as another way of acknowledging the crisis and helping your customers know they are not alone. 

You might want to open up to your customers about your own personal experience during the crisis. Do you know anyone who's become infected? How is the crisis affecting your immediate city or neighborhood? What concerns do you have for the industry that you serve? 

Of course, you're on these calls for business purposes and you should still try to be confident and upbeat. But it's okay to commiserate with your customers a bit about just how uncertain the world can be, and show them your own human response to the crisis, while also offering an optimistic vision of how your company can help them recover, rebuild, and move forward into a brighter future. 

Help before you sell 

Now more than ever, B2B salespeople are in the business of helping people. Your B2B buyers might be in a moment of unprecedented crisis: They may be struggling to stay in business or recently had to part ways with some beloved employees or a longtime vendor. They also may be going through emotional turmoil, feeling scared about their own health and their financial future.

Be ready to help. Be ready to think big about how you can help your customer's business, even in ways that might not be immediately relevant to what you sell. Think beyond the immediate short-term transaction and build a longer-term relationship. Even if you can't sell to this customer today, or even later this year, look to create the beginning of a business relationship that could last for years to come. 

The COVID-19 crisis will eventually pass. But even in this moment of crisis, there are opportunities to get better at helping customers and having meaningful customer conversations. Don't be afraid to be vulnerable, be human, and listen with empathy. We are all going through this crisis together, and there are still lots of ways to build connections with customers and help each other emerge stronger than before. 

The post How to Have Better Customer Conversations During the COVID-19 Crisis appeared first on AllBusiness.com. Click for more information about Gregg Schwartz. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

You’re Persistent and You’re Passionate—But Do You Have the Third Critical Trait Needed for Business Success?

Posted: 04 Jul 2020 09:41 AM PDT

The key to success in entrepreneurship isn't traditional intelligence, like a high IQ. It's grit. Grit is a combination of persistence, passion, and resilience. Persistence keeps you focused when the going gets tough. Passion is pretty self-explanatory: it's love and care for what you do. Resilience gives you the mental courage necessary to keep trying. You might get knocked off the horse, but you will get up and get back in the saddle.

Amid COVID-19, it has been challenging to maintain all three of these traits. Even the most resilient entrepreneurs likely have had days where they struggled with their mental health. Is it possible to build up your resilience during an unprecedented time?

The answer is yes, according to resilience expert Wayne M. Sotile and neurosurgeon Gary R. Simonds. Certain individuals (typically those in medical fields) thrive during times of crisis because they “instill habits that create a high level of resilience … [which] enables them to cope.” Honing those habits will help them to also thrive in the future.

How can you become familiar with the fundamentals for building this type of resilience? Sotile and Simonds say to follow the acronym WIRED. Let's break down how each part of this acronym can help you build resilience.

W: Focus on your personal wellness

As I mentioned earlier, many entrepreneurs at the start of COVID-19 may have felt scared, lonely, and unsure of the future ahead. In order to remain resilient, they have picked up behaviors like cooking, gardening, and dancing that allow for practicing self-care.

Create a work-life balance that works for you and your specific needs. Treat yourself like a battery that knows when it’s time to power down and recharge. The self-care practices that you implement now, like journaling and meditation, will allow you to take better care of your mental and physical health as you navigate the new normal.

I: Solicit input

What is manifesting your stressors? You may be able to figure this out by using the Stress Continuum. This is a model commonly used by the military to assess and manage stress. Using this model, you can articulate what your feelings and behaviors are like under stress. Over time the Stress Continuum will gradually become more personalized as you understand stress-related symptoms—e.g., a change in diet or energy levels—that are specific to you. With that knowledge, you can create practices that will allow you to move into ” the green zone,” where you are mastering stress with good coping skills.

These activities will need to be practiced consistently; for example, a one-time walk will not instantly cure all stressors. Over time, however, you can learn about your stressors, practice necessary activities to move you into the green zone, and discharge stress from your system to focus on your business.

R: Recognize what is working

What are you grateful for during this time? Do you have a wonderful team you work alongside? Are you doing work that you love? Do you have a supportive tribe of family, friends, and community? Take a moment to recognize the great things you have right now.

Look back at the accomplishments you have already achieved in your career. This is huge in building resilience. The odds may have been against you in different chapters of your life, but you are able to succeed and thrive despite them.

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E: Do what is needed to boost your efficacy

What will make you more valuable in business during this time is not necessarily doing more of the same things or sticking to what you know you're good at—it is learning new skills.

Enroll in an online class or sign up for a webinar that allows you to develop skills in areas that pique your interest. As you learn a new skill—like graphic design, for instance—you'll develop confidence and be able to utilize the new skill for the greater good of your business. You will be able to provide more customized services and offerings, attracting new customers and clients. It's a win-win for building resilience and boosting efficacy.

D: Heighten dialogue

To whom do you heighten this dialogue? Talk to your team, loved ones, leaders in your field, and social media communities. What is this dialogue about? Anything that you are passionate about, which can range from your business and the small business community to social justice and how you may act as an advocate to make change.

Speaking up is critical to building resilience. Not only are you speaking out about what matters to you, but you are also deepening relationships you have with the individuals you speak to and encouraging them to listen, think, and respond with their own ideas and thoughts.

Do you feel WIRED now?

If yes, go out and help others build up their resilience, in and out of entrepreneurship.

RELATED: 4 Ways to Move Past the Toughest Part of Any Goal—Getting Started

The post You're Persistent and You're Passionate—But Do You Have the Third Critical Trait Needed for Business Success? appeared first on AllBusiness.com. Click for more information about Deborah Sweeney. Copyright 2020 by AllBusiness.com. All rights reserved. The content and images contained in this RSS feed may only be used through an RSS reader and may not be reproduced on another website without the express written permission of the owner of AllBusiness.com.

Retailers: Is Your E-Commerce Website Ready for a Sales Surge?

Posted: 04 Jul 2020 08:12 AM PDT

While overall retail sales are down right now (there's been a 21.6% decline from April 2019 to April 2020), online sales are bucking the trend. The NRF reports a 21.2% rise in online and other non-store sales over the same time period.

Chances are e-commerce sales will continue to climb as consumers wary of COVID-19 increasingly turn to the web to make purchases rather than shop in-store. But that means retailers and e-tailers need to make sure their e-commerce sites are in tip-top shape.

To find out what you need to know, I talked to Matthew Lane, Business Development Manager at Straight North, an internet marketing company that provides SEO services and PPC management; and Jonathan Ryskamp, co-founder of ThemeSupport.net, a leading third-party provider of support for WordPress themes. 

Rieva Lesonsky: What do small retailers need to know about building a solid e-commerce website? 

Jonathan Ryskamp: You need to remember your number-one goal is to sell products. This sounds obvious, but some e-commerce customers we work with seem to get distracted by the technology and forget this. For example, you need to make sure your site is intuitive and customers can easily purchase items—so you may not want to require a complex sign-up process to purchase. And you need high-quality images of your products that ideally can be zoomed in by the user. If your site seems hard to use or your products are not front and center in crystal clarity, then you will fail to convert a large percentage of your on-site visitors.

Matthew Lane: Small business retailers who are considering building a robust e-commerce site should start with similar fundamentals they established when opening their retail store:

  • What are the core products you intend to sell, and how much variability or customization is required to sell those products?
  • Have you proven there is a market for them online? Furthermore, are there competitors you can research to prove the concept before investment; should you test selling via Amazon before investing in an e-commerce platform?
  • How are you going to deliver or get products to customers (logistics)?

Lesonsky: How do you know when it's time to redesign your existing e-commerce website?

Ryskamp: First, if your site does not match modern website standards, then you need to redesign it. For example, if your site is not mobile responsive (in other words, if your site doesn't reshape itself to be easy to use on mobile phones or tablets) or there are major site errors, then you should rebuild it. Second, if users are giving you feedback that it's cumbersome to use, then you should redesign it. Lastly, if your sales are decent but not increasing, then you should consider a redesign—a new look/feel to a website is a great excuse to invite back all of your past customers and can help you land new ones.

Lane: It's no different than a retail environment—if your store isn't clean, organized, and easy to browse/identify what you're looking for, it's time to make improvements. The beauty of having an e-commerce store is that all the data is available to you via free tools such as Google Analytics, Google Search Console, etc. Therefore, the key performance metrics you should evaluate are bounce rate, conversion rate, site speed, and mobile-friendliness to determine if you could profit from a redesign.

For instance, let's assume your website's conversion rate to sale is 0.67%. Considering the average retail e-commerce website conversion rate is 1 to 2%, we can assume there are significant opportunities to improve your website's user experience (UX) and performance.

There's more information here: Ways to Boost your eCommerce Conversion Rates.

Lesonsky: What are the crucial elements e-commerce websites need?

Ryskamp: Besides an easy-to-use interface and good quality photos, the other things an e-commerce site needs to take into account that is often forgotten are the small sales-process details like shipping options/costs, taxes, inventory management, coupons, etc. We have worked on a lot of e-commerce sites where the vendor has strange or difficult shipping rules that don't easily translate into simplicity for the end user. Normally these kinds of details are not front and center on the vendor’s mind when they build the site, so we sometimes get to the end of a project and find out that the vendor doesn’t even have a plan for these kinds of issues.

Lane: You need:

  • Mobile-friendly website. Mobile shopping accounts for 50% of online transactions. By creating a mobile-friendly experience for your visitors, you will improve time invested on-site, conversion rate, and SEO performance.
  • Robust security and PCI compliance. The benefit to SaaS e-commerce platforms such as Shopify, BigCommerce, etc. is that most SaaS companies guarantee PCI compliance. As a result, your store is less susceptible to threats and attacks.
  • Streamlined and secure checkout process. Have you ever considered how easy it is to purchase something via Amazon or Zappos? Focus on balancing usability and building trust as if you were optimizing your checkout process so that a five-year-old or 95-year-old could successfully make a purchase.
  • Product ratings and reviews. Let your customers do the selling for you with user-generated reviews
  • Social proof. Create trust and authenticity by allowing visitors to connect with your social profiles (e.g., Facebook, Instagram, Pinterest, etc.).
  • A variety of payment options. Consider Apply Pay, PayPal, and alternative payment methods to improve conversion rate beyond Visa, Mastercard, etc.

Lesonsky: Can you share some best practices for small retailers?

Ryskamp: Pick a good solid platform. If you are super-small, go with Shopify. If you are medium size, WordPress WooCommerce is likely best. And if you are larger, then Magento might be the best fit. If you are working with a good web development company, they can assist you in choosing the best platform. Then once you find the ideal platform, choose a theme/layout that is easy to use and matches your brand’s image.

Lane:

  • Avoid clutter by prioritizing the top product categories and products. Follow the KISS principle.
  • Depending on the depth of your product catalog, create a streamlined search process (e.g., left-hand filter, search bar feature, etc.).
  • SEO optimization if there is search demand for your products.
  • Encourage visitors to create a new profile when signing up but give them a streamlined option to checkout as a guest. Think of this as the express lane at the grocery store with 10 items or less; customers will remember a positive five-second checkout process and return. They won't return, or worse, will exit stage left if it is a cumbersome five-minute process to checkout.
  • Provide the same level of customer service you'd offer in-store (e.g., phone number, live chat, email, etc.).
  • Display high-quality product images, videos, etc.
  • Feature authentic product reviews and ratings.

Lesonsky: What about the budget?

Ryskamp: If you have a small budget, focus on setting up a Shopify or Etsy site yourself. These are super inexpensive to start, but they also take more of your profits as you grow, through credit card transactions and other fees. If you are an established business that is serious about making a great e-commerce site, then you will need to budget more. We have seen projects ranging from $5,000 up to $100,000, so there isn't just one specific amount. If you let your website development company know your budget range in advance, they can usually work with you on options.

Lane: Once you've established the requirements or must-haves for a minimally viable e-commerce store, you can identify options in the marketplace that fit your needs based on your budget. It is crucial for a small business to think of their first e-commerce store like their first home. It isn't necessary for your first home to be your dream home. In fact, you might not even need to own it. You could consider licensing/renting it via SaaS providers like Shopify, BigCommerce, etc. vs. open source CMS platforms like Magento, WordPress, etc.

The beauty of innovation and technology is that it doesn't require a $25,000 to $50,000 investment to build an e-commerce website anymore. For $5,000 to $10,000, you can work with experienced and competent agencies to develop a foundation that is suitable for your requirements. Again, just like that home analogy, your e-commerce store should never be complete; it is always a work in progress that can be continuously improved.

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Lesonsky: Security is a concern as well. What should small retailers look for in a host to know their site is safe?

Ryskamp: A small retailer should never host a site themselves. They should always use a platform that is tried and trusted (see above). They should also budget for continued maintenance with their website development company, not only to ensure the site is secure, but also to make minor changes/improvements to the site over time.

Lane:

  • SSL certificate. Establishes secure connectivity between a user and the website.
  • Firewall. Provides a gateway or wall between two networks and permits authorized traffic and blocking malicious traffic.
  • Two-factor authentication. Adds an extra layer of security by requiring username/password and a system-generated code sent via email or text.
  • Privacy policy link in footer. Addresses the website's privacy policies and promises customer data is not shared with third parties.

Lesonsky: What other factors should small retailers be concerned about?

Lane:

  • Website management—who on your team will be the primary point-of-contact to manage things such as inventory, images, reviews, offers/promos, customer service, etc.?
  • Establishing business goals and objectives
  • Configuring analytics and reporting dashboards to effectively measure business goals.
  • Shipping, packaging, and logistics services.

Ryskamp: Besides just having a website to sell products, you need to [create] a marketing plan to get users to your site. Sadly, we have built e-commerce websites that never had traffic or sales. You must create a plan on how to drive traffic to your site. Become familiar with advertising on Google and Facebook. Learn about SEO. Create email campaigns with MailChimp or Constant Contact. It is always a good idea to tell your website developer your plan for marketing, and let them make suggestions on how to build the site around your strategy (i.e., building landing pages for web ads, a blog for SEO, or mailing list sign-up forms).

RELATED: 5 Simple Ways to Improve Your E-Commerce Accounting Practices

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