In an effort to continue to try and provide our members with resources that are easy to consume, and relevant to their own businesses, we are taking some information that has been developed and trying to “pare it down” as much as possible so you can easily find the identified portions that are most beneficial.
One resource that has been created in the wake of the COVID-19 virus is a video series developed by Dirk Beveridge from UnleashWD. In this particular video, “How to Stress Test Your Business in Times of Crises”, Dirk interviews Mike Marks and Mike Emerson from Indian River Consulting.
We have taken some time to pull some of the highlights and identify some important items that were covered, and then time stamp the video for easy access to everything that was covered in the video.
Mid-sized distributors need to be taking steps to reevaluate their current business plans and rework them accordingly. You should be determining what your key objectives are and working through different ways to navigate these trying times. Things will not be business as usual and you will need to take the time to determine what should be prioritized through this process.
The most important thing that you can be doing right now is communicating. You need to be talking with employees, suppliers and vendors about your plan.
If you are at a lower percentage of anticipated revenue compared to your original business plan, you should start determining your business needs.
- Personnel is the biggest part of SG&A and if revenue is half, how can we support staff? What are ways to mitigate these expenses in tough times? Examples: Lower number of hours in the work week? Reevaluate certain salaries or incentives?
- Balance sheet items should be investigated. Examples: Can you renegotiate any current debt? Can you get extended terms from suppliers?
You need to start working on decisions that may need to be made in the future in order to be prepared if/when they present themselves.
When performing a business stress test, you should involve the senior executives as well as key finance individuals. This group needs to be ready and willing to discuss what differing levels of revenue will mean for different organizations.
Coming out of this we need to consider changes in the business model, including digitizing your business. This situation is a great example of how businesses are able to achieve the “working from home” concept.
One thing you can do is put together a scenario planning list of questions that need answers and should be considered. Examples: What happens if a supplier goes bankrupt? How can you maximize the talent pool that may become available?
Looking at countries that are ahead of us on the curve is telling of how long we expect this situation to last. Using China and Europe as examples, we are thinking May until things start to improve. Then mid-way through third quarter we can look back at what has happened.
8:47 – If you are a mid-sized wholesaler what should you be looking to do immediately?
11:50 – What is involved in a business stress test?
14:50 – Who should be involved in the Stress Test?
16:09 – What should make folks stop and really face this situation?
18:13 – As we go through this and come out the other side, what can we be looking to do as things settle?
22:28 – How can this situation be used strategically as businesses starts to get back to normal?
23:40 – What are your final thoughts?
25:15 – What is your best guess on how long this situation will last?
About UnleasedWD's video series
At UnleashWD our purpose is to unleash the human spirit. And during this unprecedented time we felt compelled to support the UnleashWD tribe and our association partners with the right mix of inspiration and timely, relevant information. We reached out to our network of wickedly smart subject matter experts to provide the sessions below. In the words of one attendee - “This was amazing. You’ve changed our day tomorrow. We’ll be on the attack!”
We are a design, innovation, and strategy firm who transforms legacy distributors into nimble and innovative market leaders. What you are about to experience is designed to unleash your spirit so like the individual above decided, you too will be on the attack!
We are here to support you through these next few months and beyond. If we can do anything for you please reach out directly to either of us.