LocalGlobe Notes
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LocalGlobe Notes

Strategies for Managing in Crisis like #Covid-19

There is a ton of stuff on how to keep yourself and team safe and healthy – perhaps not enough on how to use your time, ingenuity and capital to make your business stronger.

Here are some tips which may apply (of course there is no ‘one size fits all’)

  • Primary focus needs to shift from growth or unit economics to CASH preservation. You can get back to Growth and Unit Economics when this is all over
  • Eliminate all discretionary expenditure – eg experimental marketing or marketing which results in anything more than say [3] months payback. This number depends on how strong your balance sheet is.
  • If you really are ‘up against it’ in terms of running out of cash, communicate frequently with your board and shareholders. Don’t hide!
  • The current crisis does offer opportunities to negotiate with landlords, defer PAYE, VAT (Govt has given Tax authorities license to be flexible) or large corporate suppliers.
  • Unfortunately you may need to downsize in certain areas. This is hard but the ultimate preservation of your business for the benefit of all stakeholders is a priority – and will be appreciated and should be understood by the remaining team. Leadership team may also have to cut salaries for a period and set up loan accounts.
  • Use the time and lack of ‘ambient noise’ to really focus on your product, thinking carefully about how customer needs may change, how it can be made better. If you are very well capitalised, it may be time to beef up your product and engineering teams (unfortunately there will be greater availability of talent in the coming months).
  • Use the time to communicate with customers, think about their needs and provide the service that you are able to.
  • Allocate responsibilities very clearly and check in regularly to monitor progress and support
  • Again, depending on your circumstances, there may be some interesting acquisition opportunities arising in the coming year. Survival of the fittest!
  • Create an atmosphere – even if WFH – within the company of real determination, collective fight and belief in the mission. Reminding everyone that all great companies have lived through times similar to this and emerged stronger.
  • Make time for smiling, laughing

If you have managed companies or lived through cycles or crises, share some of your wisdom.

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Robin Klein

Entrepreneur, now active early stage tech investor. Portfolio includes/d: LoveFilm, Moo, Graze, Zoopla,CityMapper,Fizzback,Improbable,Transferwise+ others