Natural selection: What does this mean for us as entrepreneurs? Many businesses are in a constant state of survival, and that’s never been more apparent than observing the current impact of the coronavirus and its impact on business.
Some businesses will not make it through this time; some will come out battered and bruised—but stronger; and some will come out absolutely thriving.
On today’s show, Dr. Sabrina and Mike explore the importance of creating a sustainable business from Day One. They discuss what we can do to get our businesses through this time and come out stronger. Listen in for some strategies that can help you weather this (and any) storm.
Profit by Design is a Tap the Potential production in collaboration with Small Business Consulting Group.
- Mike shares the definition of “natural selection” and applies it to the business world.
- Dr. Sabrina shares acceptable modes of competition, the danger of competing on price, and the importance of building margins into pricing.
- Traditional thinking advised setting aside three months of cash reserves, but current thinking is that six months is probably safer.
- You should be able to answer “YES” to each of these questions:
- Are you bringing in work from your top clients?
- Are you doing work that aligns with your strengths?
- Is it work that can be systematized?
- Does this work align with your immutable laws?
- Does it move you closer to your vision?
- Some businesses are going through a “creative destruction” right now, letting go of team members that are not a good fit, creating a culture that they want to implement going forward, etc.
- Dr. Sabrina explains the 80/20 principle, which involves focusing on increasing business from our top 20 percent of our clients that are responsible for 80 percent of the revenue in the business, and the financial impact it can have.
- There are a lot of business owners who incorporate Profit First, who have been in a good cash position coming into this crisis. As business slows down, they may find it tempting to stop Profit First until after the crisis has passed, but now is the time to ramp up your good habit, NOT stop it.
- Dr. Sabrina addresses business owners who entered this pandemic crisis with debt and have added more debt.
- Dr. Sabrina and Mike discuss options for struggling business owners.
- Powerful questions to consider when projecting into the future:
- What do we think is going to be happening four months from now?
- Which competitors of mine will be gone four months from now?
- What opportunities does that create for us as a team?
- What kind of clients would we want to go after that our competitors served, but we could serve better?
- What team members would we need to go after that kind of business?
- After this crisis, people will not want to go back to grinding it out. They will want to be much more intentional about quality time with family and integrating that time with work better. Businesses will also implement virtual work more readily than ever before.
- Maintain good habits, pay attention to getting clarity around sustainability, and stay focused.
Links and Resources:
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Profit by Design, a Tap the Potential production in collaboration with Small Business Consulting Group
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The Game of Work: How to Enjoy Work as Much as Play by Charles A. Conrad
Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz