By Phil Bray, Founder and Director at The Yardstick
I’ve put off writing this blog for a few weeks.
It’s more personal than our usual content, drawing on my experiences from 2008. It’s my genuine hope that it’s helpful to anyone who owns a business.
As some readers might know I ran a business in 2008 which went bust. At first glance, it was a victim of the financial crisis, with the bank calling in a debenture and forcing a sale. Dig deeper though and I must hold my hands up to some significant mistakes. My excessive ambition certainly played a part in our downfall too.
The fallout was significant; I had several large personal guarantees to deal with, the house went and so did the car. It also ended my oldest friendship, perhaps my biggest regret of the whole period.
It’s 12 years since those events. But as we head into the mother of all recessions, I wanted to share some lessons I learnt during that time, which have helped The Yardstick Agency over the past couple of months.
So, whether you’re surviving, thriving or worried about the future, I hope this helps.
1. Plan ahead
Covid-19 is certainly the most extreme crisis in my lifetime, but others such as the dot.com bubble, 9/11 and the 2008 financial crisis have threatened the future of countless businesses. I guarantee another crisis will hit us at some point.
Now’s the time to plan for it.
Over the years I’ve spent a great deal of time analysing what went wrong in 2008. The lessons it taught me have been invaluable and meant we were in good shape when Covid-19 hit us a few months ago.
I’d urge you to start reflecting on the past few weeks now. Speak to your team and clients. Build a picture of what went well, where you could have done things differently, and the changes that would protect your business the next time a crisis hits.
For some businesses that might be as simple as preserving cash. For others, now might be the time to move to a fixed fee model so ongoing income isn’t linked to the value of investments, which is ultimately beyond your control.
Only you will know where the future threats to your business lie. Now’s the time to find and address them. It’s too late when the next crisis hits.
2. Make swift decisions
We all want to make the right call every time. But that’s unrealistic and risks paralysis by analysis.
In 2008 I found that by the time we’d debated and agreed on a course of action to solve problem ‘A’, problem ‘B’ was a greater issue. We never seemed to get ahead of the game.
So, in 2020 I resolved that we would make swift (but fair) decisions without being afraid of making mistakes. Mistakes are inevitable.
I’ve spoken to some business owners who’ve already had to make tough decisions. I’ve no doubt there will be more to come. So, as I said above, invest time in reflecting on the past few weeks and learn the lessons. It’ll help you make quicker and better decisions in the future.
No one benefits from a protracted decision-making process.
3. Offer as little security as possible
Ultimately, it was the personal guarantees I gave which caused the most financial pain back in 2008. They were enforced vigorously, and I’ve got no problem with that. I signed them.
However, I have a huge problem with the way some lending institutions describe personal guarantees and other forms of security. Signing a piece of paper giving a guarantee, a charge over property, or a debenture over your business might seem fine when times are good. But, when the proverbial hits the fan, expect them to be enforced.
If it slows our growth, so be it, but I’ll never sign another personal guarantee, or give control over the business to anyone else ever again. I’d urge you to think twice before you do.
4. Have trusted ‘go-to’ people with no skin in the game
After my experience in 2008, I now question the motives of every business adviser, guru and coach. Probably more than is healthy.
That said, running a business can be lonely, especially at times like these. That’s why you need ‘go-to’ people who have no ‘skin in the game’. These are people you can call night or day, who will make time for you and, crucially, have no financial interest in your success or failure.
I’m lucky to have a handful of ‘go-to’ people right now. They’re invaluable. And I’m eternally grateful for their presence.
5. Look after your team
In my experience crises such as Covid-19 will either strengthen teams or expose existing cracks. Having good people around you is crucial. And, good people need looking after.
During the current crisis, we’ve tried hard to look after our team. We started working remotely before we had to, we’ve had daily and weekly catch-ups online and have extended flexible working to those people with children.
We also put a therapist on retainer to help look after our team’s mental wellbeing, making unlimited sessions available for our team members, plus their partner/spouse.
I’m sure we could do more, and we’ll look for every opportunity to support our team.
6. Come out fighting
Earlier this week I spoke on a webinar alongside Marianne Page who explained how McDonald’s always accelerates out of a crisis. Marianne’s presentation was fascinating, and I’m delighted that she has agreed to be a guest on our next free webinar on Wednesday 10th June (more of that soon).
Marianne echoed something I’ve been encouraging advisers and planners to do for weeks and that we’ve also tried to do: come out fighting.
That’s not easy to do. In times of crisis, it’s only natural to shut down. Indeed, the very fact we are in a crisis and fighting fires make it hard to come out fighting. But we must try. I certainly wish I had tried harder in 2008.
There are some great examples of firms doing that right now, running client events and webinars, increasing their content production, and extending their reach on social media. By being helpful and useful, these firms are leading the way and standing out from the crowd. They might not be rewarded immediately, but I’ve no doubt that they will be in the months and years to come.
Finally, remember that the sun still comes up
There’s no getting away from it, 2008 was a tough time. But, you know what? The sun still rose in the morning and looking back, it started a fantastic new chapter in my life both personally and professionally.
So, if you’re struggling right now, I know how you feel. And, I’m here to tell you it can get better. In fact, if you need that person with no ‘skin in the game’ and want to chat, feel free to drop me a line. If I can help, I will.
If you’re thinking more positively and looking forward, I’m delighted for you. Our country is going to need businesses like yours (and ours) if it’s going to get back on its feet.
Finally, thanks for reading, I hope this has been helpful. Next week we’ll be back to our usual marketing hints and tips!
This article was originally posted on The Yardstick on 21 May 2020.