It’s been one year since the world shut down and a lot has happened. I started writing this in the early days of closure and realized it would be good to share for those who may not have experienced the same things.
1. The best laid plans… No matter how much you plan, you can’t consider every possible outcome and combined impact that can take place when everything goes wrong at once. Even the most hard working and successful companies saw business declines for at least some part of 2020. In March-April ’20, it seemed like we were receiving daily notifications that mailings were canceled. Our forecasting quickly went to “wait and see” status. Most Type A’s attach their business success to their hard work and see it as a personal failure when things don’t go right. That’s how I felt until I spoke with my counterpart at another company. I realized I wasn’t alone and there were other good businesses who were being impacted by the ripple effect that takes place when your clients are struggling.
2. Have back-ups for the back-ups Many have a Plan B. How many have a Plan C and even a Plan D? For CCC, it was NCOA. Our primary provider had experienced an outage soon after the “Stay at Home” order went into effect. This had nothing to do with the pandemic but it lasted one week during a chaotic time. CCC always had a back-up company for NCOA but that vendor had changed their return layout and our clients had only been signing one Postal Acknowledgement Form. This meant emergency programming to be able to use our fall back vendor. We learned a valuable lesson. As a result, we established an additional option for NCOA and now have clients sign multiple forms annually. We have routine Disaster Recovery testing where we send work to each provider to ensure that all is working as expected and nothing has changed.
3. Production diversification When possible, spread your supply chain across multiple locations and providers. We have had clients whose businesses really peaked during the pandemic due to the increased demand for their product category. These companies had a different kind of challenge, mostly in the form of inventory shortages due to closures at one location or another. Where possible, spread your production across multiple locations. It might cost a little more but this may be a small sacrifice for the greater good. It is also good to have all of the parts or pieces of a given item sourced from the same place. You might be able to make “the hoodie” locally but you get your zippers from China and can’t complete the product.
4. Proactively check in with your vendors I was really impressed when one of our clients reached out to touch base with us to see how we were doing during the closures, etc. This made quite an impression. It pays to take a minute away from your own challenges to make sure that your providers will be able to continue to service you. Give them an update on how things are going at your company and find out how they are doing. If one of your suppliers is in trouble, you need to know sooner than later and have a contingency plan.
5. Stay on top of accounts receivable March ‘20 billing was great. We exceeded our forecast. Billing was one thing. Collecting was a challenge. It wasn’t long into the pandemic that we started to see accounts receivable (AR) starting to tick up. We received requests and notices that some needed to temporarily increase their days to pay beyond contracted terms. As a vendor, flexibility is key. My advice to those who run into financial challenges: take the high road. We really appreciated all who reached out and provided a payment plan vs. those who went silent and had to be chased. It really helped us to plan for our own expense management.
6. Explore government relief options You may not needed it at the time when it first becomes available but in a sustained uncertain environment, it is best to apply for the options you are eligible for… just in case. It also takes time for new offerings to be made available and for applications to be approved. If you aren’t really sure if you are going to need it, you can always give it back. In the case of the Paycheck Protection Program, many companies wanted it but were denied in the first round of funding. Many banks weren’t prepared for the onslaught of applications. Banks only considered applications for existing customers. Which brings up the thought that establishing a relationship with more than one bank could be a good way to improve the odds if ever in this position again. Bottom line, act early in preparation for what might come and hope that it doesn’t.
7. Realize cost savings when remote What can be cut if all are working from home? Things like paper shredding/recycling, cleaning services and heating/cooling temperature can be adjusted accordingly. Companies review their sales forecasts regularly. They may even look for ways to reduce cost. But don’t forget to revisit hidden expense line items in the budget: If revenue is down, you won’t likely be hiring as planned, travel and conference fees will be less, hard costs, such as commissions and outsource services associated with unrecognized revenue can be reduced.
8. Strive for a paperless office Do you know people who print their emails? I personally don’t have one paper folder or a need for an office filing cabinet. However, our business processes weren’t as digital as they could be. We were sending invoices by email but many clients were still paying by check. No one was in the building to collect the mail. We didn’t even have a mail chute for the building or a formal mailbox. Prior to COVID-19, we had an actual mail delivery person who would walk in and physically hand the mail to our office manager. We were using DocuSign for contracts but our human resource and security forms all had to be printed, signed and scanned. Our employee HR folders were all paper based. All functions are better served paperless so that you can operate from any location.
9. Embrace employee location diversity There are many benefits to having remote employees, especially those who live in other states. When there is an emergency situation in one area (i.e. Texas power outages), you have people in other locations who can help bridge the gap. It also expands your recruitment pool. CCC’s philosophy in the last decade has been to hire where the talent is. 30% of our work force is remote with employees in 10 states. Our outsourced HR department makes it easier to hire across the U.S., as every state has its own rules, forms and taxes. We routinely test our work from home plan which made for a seamless transition when we closed the building early in the timeline. Some companies have taken it to the next level by letting their leases lapse and giving up their offices. Great way to save money and you can always supplement with a Regus type “rent an office for the day” as needed. Something to think about now that you have proven you can do it.
