How to Prepare Your Small Business for COVID-19 Coronavirus

Hey guys. Welcome to episode number 250 and it's an important one. If you haven't heard this episode yet, please be sure to take note because we're talking all about COVID 19, the coronavirus and its impact on your business, our economy, and what you should be doing right now to prepare and make sure you grow and sustain your business even through uncertain times. Let's talk about your business strategy and the juicy details of what actually works works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts and strategists that actually make it happen. I'm your host, Ashley Alderson from the Boutique Hub and I can't wait to chat. Virus and the panic it's caused. So we've been visiting as much as we can with industry leaders, fellow boutique owners, wholesale brands, all of the market centers we've been in contact with. And I think at this point, regardless of anyone's personal feelings on the coverage of this topic or how strong the virus is, I think the point is that we can all agree on the impact it's having on our economy. So, personal views aside, I think today it's time just to shed some light on two key things. Number one, the opportunities that we have at hand because of the experience that we're presented. But also number two, the present threats and how we're going to be able to move past them. One thing is for certain, you guys, fear and anxiety do not move your business forward, only action will. So as much as you can, let's stay in the state of action over anxiety. Because the more we take action, the more we have ability to be creative and be resilient and keeping our business moving forward while others who are stuck in fear become stuck in business. Honestly, your mindset is going to determine how you handle this situation and eventually it's going to determine its outcome. Every single one of us has the opportunity to look for reasons to give up and the reasons why this isn't going to work for you. Or you can look for reasons to dig in and reasons to make this an opportunity. Just like I think you've maybe heard me share this before. When it comes to mindset, I think sometimes we're stuck. I'll use money mindset for an example and we say things like I can't afford it, which shuts down the creative pathways in our brain. But when we take one small Shift. And we simply ask ourselves, how can I afford it? Now the creative juices get flowing and we come up with countless creative ideas on how to begin to move our business forward. And this situation is really no different. I can't do it. I'm in a tourist town. I'm in a mall. I can't work from home with my kids, I can't work without my staff or how can I work from home with my kids? How can I keep my business going even when my community is slow? Right? How can is going to help you to be much more creative? So here's the scoop. Along with this podcast and the blog post, we've also created a full ten page guide. Ten pages, you guys, of ideas for our members at the Boutique Hub to download and use anytime. It's loaded inside of our training library along with ongoing weekly business live trainings that we're going to be having as long as this threat persists. Whether it's myself or Sarah or an outside expert, we're going to be bringing in experts to help us navigate this rocky road. So if you're a member of the hub, make sure you go ahead, grit this, grit this, get this 10 page guide inside of our training library. It's a five part preparedness and execution plan for your business and your community right now. And it walks you through countless ideas and steps that you can take to to make sure you're prepared. And you know green light, yellow light, red light when you need to execute different parts of your plan. So go get that now in the training library. And if you're a member, watch for our trainings every single week inside of our members group to help keep pushing your business forward. All right, let's start here. Let's talk about number one opportunities that are at hand with the COVID 19 coronavirus. You ready for this number one, number one opportunity? And I think we've all been facing this so far and we have a huge reliance on goods manufactured in China. And that's no secret, not just across our industry, but multiple industries. And I know as so many of you have dug in and gotten creative in talking with your vendors, there's been a shift in some production happening in the US and other countries throughout the world, which I think is going to have an impact on global manufacturing going forward and your supply chain of goods, which at the end of the day is going to be great for you and hopefully great for your vendors as well. And if we've learned anything, now is the time to be in close contact with your Vendors. And all along, as we've been saying, you know, one reason to go to market or one reason to go to LA and to meet your vendors is to build relationship with them right in, in LA or among wholesale vendors. Honestly, you guys, it's a really, really small world. Everyone is very close knit and they all talk and so they know when boutiques are reputable and they have great reputations and when they're good to work with. So your vendors are looking for win win partnerships with you. So build those relationships now. And as I know, there's been a lot of inventory, as I've been hearing over the last couple of days, it's ready to ship, there's goods on hand. The supply chain should be there for you if you need it. Just make sure you're in contact with your vendors, especially about fall and holiday as we get to that time of year, and make sure you've got what you need on hand. Now, second opportunity. And I'm excited about this one, you guys, because I know we're, we're all annoyed by Chinese knockoff sites like Wish and Fairy Season and Bella Lily and all these that pop up all over the Internet. And it confuses our consumers because they think they're gonna get the cutest top in the world from Vichy Collection that actually comes for $8 and fits your Cabbage Patch doll instead. Right? It's crap and it erodes trust with your customers. But I think what's happened is, I know I've seen those ads go down in the last couple of months because I think their supply chain was also inhibited. But it's going to bring trust back to the boutiques. The consumers that were wary about shopping online with those type of sites before, I think through this experience are going to be looking for you to be their personal shopper. Right again, bringing it back to the boutiques. And the advantage that you have in this economy. Opportunity number three is again, this is an opportunity for shoppers, your consumers, to build stronger relationships with you. Because you're the real people that are showing up on live video. You're serving them even amidst this entire panic that's happening. You know, I think as annoyed as you probably are by all of this, your customers are equally as annoyed and they're looking for somewhere to go to escape, you know, to have girl talk, to have a good time to talk about life and things outside of this virus. And you have an opportunity to be that for them. You also have an opportunity to serve them in brand new ways like clientelling. Clientelling is simply printing out a list of your top 100 customers and deploying your team to start calling or texting or sending personal messages to those top 100 customers and being a personal shopper of sorts. There's great ways to increase revenue just by deploying a little bit more personal customer service and not just trying to market to the masses. So it's time to drill down and really hone in on those key customers customer relationships. Fourth opportunity is more consumers are going to become comfortable shopping online if they weren't already. I read this stat the other day that e commerce is moving from 9% of overall retail sales in our economy to 13%. And I would venture to guess that it's going to be even higher because of this. Because I mean, God forbid, toilet paper sold out everywhere and even Amazon is sold out on toilet paper. So if consumers aren't already used to shopping online, they will be. So here's an opportunity to up your e commerce game, even if it's slow to begin with. But start to look for opportunities to really maximize that experience, Optimize your website and look for how to streamline that process in your business. Fifth opportunity is you have the chance right now to build your preparedness plan for any future events along with your operations document. And you guys, honest truth, if you're like me, this is the kind of stuff that I push off until the very end. Like I procrastinate on these things until you're desperate and you need them. So two things, these are two separate documents. Number one is your preparedness plan and that's like an emergency. What if a tornado, a fire, a hurricane, theft, or as I like to call it, and I've heard Rachel Hollis talk about this, the bus rule. If you get hit by a bus tomorrow, would your business survive? What would you do? Would your spouse or your significant other know what to do? Would your right hand woman know what to do? So there's a preparedness plan so you're prepared for those events happening. But then there's an operations document and we just went through all of this in retail boot camp. So those of you who are boot campers, this should be totally fresh in your memory. But an operations document is for you and the key leaders in your company to go through all of your business operations, all the platforms you're on and what you use them for, your team's roles, your team's chain of command, all of your SOPs, the plans, the mission, the vision, all of the key vendors in your business. So your landlord and insurance and attorney all the people that help make your business go round. Someone should be able to pick up your operations document tomorrow and go, okay, she got hit by a bus yesterday. I guess I'm going to keep this business going tomorrow, right? So take the time. If business is slow, there's no better time than now to pick up and get some of these things that are looming on your to do list. Get them done. Next opportunity. What number are we on? 5. This is going to force you to train and to cross train your team. Get your team involved in the decision making process. Help them or allow them to be creative with you to come up with not just expense cutting ideas, but revenue generating ideas. We can't grow or save a business by cutting expenses alone. We have to find new ways to bring in new revenue. So include your team in that process. But then because of the risk and the real threat that we have that our team could be sick, they could be quarantined or hospitalized or, you know, schools be shut down, they might have to be home with their kids. Make sure that all employees on your team are cross trained. So if someone's out, someone else knows what to pick up or they know what to do if they're forced to work from home. How can your business continue to grow and thrive if your employees can't come to work and they have to work from home? Make the plan right now. 6th opportunity and I've touched on this already, here's your opportunity to do all the big projects that you've been putting off, right? There is no better time than the off season than to train and get ready for the season, right? Think about, I love basketball, right? Is it the off season when you know Kobe Bryant would spend time slam dunking Oreos into his milk and getting lazy on the couch? No. Kobe worked harder in the off season than he did in the season and that's what made him such a great and fierce player, right? What you do in the offseason directly impacts what you're going to do on the court. And you guys, the season is going to pass, right? The new season is going to be upon us as this pandemic goes away. Who's going to be the first off the starting block to get there? Is your business going to be ready or will your mindset have had you in this lag time of slam dunkin Oreos on the couch and not prepared for what's to come next? So use this opportunity to educate yourself, use the training library, use retail bootcamp, use the tools you have in Front of you to grow and strengthen your business now so you're prepared for your customers to come back as they're ready. All right, Last opportunity is you will know your numbers on a much more intimate level than you ever have before. Some may go, hold the phone. I'm going to puke in the garbage right now because I hate my numbers. Right? It can be intimidating for some, but right now it's going to force you to get to know them on a personal level. So the first thing I want you to take action on right now, you guys, is to know your break even. What is your break even in your business? And let me back up five steps further. If you don't yet have QuickBooks or an accounting system so you actually know what your income and expenses are every month. For those of you that are new boutiques, step number one, you have to get that done. And you can't cut QuickBooks as an expense because that's an investment. You have to have it to operate. You can start at $10 a month at QuickBooks. And I think we actually have a coupon for QuickBooks to get your first couple months free inside of the hub on the perks and discounts page, if you're not already using it. So make sure your numbers are in order. Get in touch with your accountant. Know your break even. Because as you're looking at your break even in your business, we have to have green light, yellow light, red light, green light is smooth sailing, right? Income's coming in, we're all good. Then we have yellow light, yellow light is, oh, I noticed my numbers are slumping a little bit. Not enough to panic yet, but maybe there's some things I could do now to, like, shore up some of my expenses or make sure that I'm putting money away in my savings account. Novel idea, right? Which is why squirrels put nuts away for wintertime is because they always know winter's coming. And in business, it's the same way. We have to know that winter's coming at some point that, you know, it's great to be a cash business, but the cash sometimes has to go into savings. So you're prepared for if a downturn happens, because it will always happen. That's the world we live in. So being prepared for winter is important. So that's yellow light, red light is looking at our numbers and going, oh, shoot, we have a problem. I'm just at or I'm not meeting my break even. I have to take action right now. And what's the action? I'm Going to take. And as I go back to the quote that I shared with you guys at the beginning, panic causes tunnel vision. Calm acceptance of risk allows us to more easily assess the situation and see the options. That's why knowing that break even right now is so important, because it allows you to make decisions or make plans for the decisions that are to be made with a clear head versus when we're in panic mode, you guys, it shuts down some of the pathways in our brain and we aren't able to think clearly, right? So when we're in panic, that's when we have this like, fight or flight mentality in our brain. And we're like, oh, crap, I've got to make a decision. What is it going to be? And we make this rush decision, and it's not always the best one. So slow down. Look at your break even. What are your green light, yellow light, red light actions going to be plan for them now so you can execute them as you come. All right, so those are some opportunities that we have before us that are going to strengthen your business. There is good that comes from every bad situation, you guys. There's so much good that can come from this if you choose to look for it. So let's spend some time looking for it. Okay? Now on the flip side of that and, you know, assessing risk and making plan, I want to help you be prepared for some of those green light, yellow light, and red light decisions. So let's talk about some of the real potential threats and how we can mitigate some of that risk. All right, so I'm going to go through a couple scenarios with you and some opportunities that you have to take action on that. Number one, for those of you that are brick and mortar, let's say foot traffic in store has significantly slowed down, right? Schools are shut down. People can't come to work. They aren't coming out into public. They're scared. So foot traffic has slowed. What do you do? Number one, you have conversations with your customers about your store cleaning processes. To ensure trust, you hold doors open or prop doors open for customers. You use signage for cleaning times. Let me talk about this. Have you ever been in a gas station on the toilet and you're looking at the door and it's got like all the cleaning times checked off on it, and you're like, oh, thank God. I was just cleaned an hour ago. I feel so much better. Because, you know, usually gas stations are so dirty. And it reassures you, you guys, you don't have a gas station in Your store, you don't. I know you're so much cleaner than that. But sometimes those little subliminal, subliminal things like sharing cleaning times or cleaning practices or ensuring that packages have been disinfected before they go out, those little things in a time of panic can go a long way. Reassuring trust with your customers. So I know that every single one of you in the last couple of days have gotten a barrage of emails from every store you've ever shopped with big box that are telling you about their practices. What are they doing to mitigate the threat? So this is your time to do the same thing. Go look at those emails, draft your own email, get in contact with your customers about how this is impacting you. You know, I'm a small business. This hurts me. At the end of the day, please stick around and shop with me. But at the same time as you're shopping with me, here's the actions I'm taking to make sure that you're safe in that process. Here's how we're making sure our team is safe in that process. Here's what we're going to do with shipping times that might be delayed through this process. Just have open, clear communication with those customers. Number two, host more live sales and educate your customers about online selling. If you're brick and mortar and you haven't gone full into online selling or live sales yet, this is your opportunity to learn about it and to test it out. Number three, get creative with your content. This is time for engagement, right? And to be a source of information for your community, to entertain your community and to give them an outlet. When social media is scary, you have social reach. You're a person of influence in your community. So use that platform that you have for good and for information, but also for some entertainment. Number four, find virtual opportunities to connect and serve customers. So this could be a closet clean out challenge. It could be virtual makeovers, it could be virtual personal shopping. It could be clientelling like we talked about. But there's virtual opportunities even for online stores to serve customers. Number five, clientelling. Create a list of your 100 best customers and you and your team text, call, personally contact them, get them back into your store or help them shop online. It could be you facetiming them and walking around the store doing some shopping. Or it could be you facetiming them and they go through their closet and you're picking out staples or things they need or things they don't need and then giving them a coupon to come and shop in your store or shop online with your store as they clean out their closet. All right, next scenario for our online stores, let's talk about online traffic slowing. What do you do? Number one, we host more live sales, more live sales, live videos, virtual closet clean out challenges. Just like we told the brick and mortar girls, keep your customers engaged even if it's not always selling. Maybe it's you digging into TikTok and building an audience. The truth is there's a lot of customers right now. There's a lot of people right now that are more concerned with what's going to happen with their job, what's going to happen with their next paycheck, what's going to happen with the school, what's going to happen with their team, what's going to happen with their retirement. And they might might not be shopping right now. And that's not a reflection on you, it is what it is. So the key is how do I keep them at least engaged? So even if they aren't buying, make sure they're still clicking so that as they're ready to buy again, you're there to help them re merchandise your website to keep it looking full and fresh, even if goods have slowed. Alright, so just like your brick and mortar store owners, have an opportunity to re merchandise your store and make it look full. Even if you don't have everything out on the floor right now, you can have more experiences and more displays and all those things online. If you have categories that aren't looking as full, maybe you have tops broken down into tops. Bottom. I'm sorry, tops, graphic tees, fashion tops, outerwear. Maybe you're combining some of those categories right now just to keep them looking full and always, always, always you guys re merchandise the homepage of your website at least every two weeks. Make sure your customers know that there's always something fresh and new and exciting. Keep the energy up, keep the momentum up, keep new arrivals coming that you're excited about. If your energy slumps because you're scared or you're desperate. My husband always says this. He always says desperation is a stinky cologne. You can smell desperation a mile away. So as much as you might be feeling that on the inside, we've all been there, you've all been there. Your customers can sense it. So keep the energy up, keep excited about what you're doing every day and serve and relate to your customers. I mentioned this a couple days ago, but give away a free roll of toilet paper with every $100 purchase. Just for fun, right? Find reasons to make light of the situation we're facing, while also, I'll add, being respectful of it because this is a real scare for a lot of people that have underlying health issues, that have elderly family members. This is real. And even though we feel like, oh man, it's just like the flu, I might not get sick, but we're putting others around us at risk and that's why the country's taking this so seriously. So as much as we want to have a Corona survival kit that we have fun with, do it also in the sense of being respectful for those that legitimately have something to be concerned about. All right, this is the time to segment your email list. And this is for online stores and also brick and mortars. So time to get rid of contacts that are sitting there inactive and that you're paying for. Same with text list or Facebook messenger bot. Clean out your inactive customers and get serious about spending time building new tags and new automations to segment all of your customers. And I've had multiple trainings on this, you guys. Actually, if you go to the YouTube channel, the Boutique of YouTube channel and look up the Talk from Win in February, the title is something like Creating Engaging content or something along those lines. Anyway, I give a whole talk about segmenting your email list and how to increase email conversions. So go there, find that, use it, optimize your list and finally sell in bundles. Create specials and offers that make it really easy for your customers to say yes to create gifts with purchase, whatever it might be. Slow down your markdowns, but increase the service when it comes to selling in bundles and creating specials. All right, scenario number three. Let's talk about employees that can't make it to work. So time to sit down and make a plan and evaluate what is your sick leave policy and what actions are you going to take to pay sick time or to adjust your leave policy. And make sure that you have conversations to reassure your team that their jobs will be there when they're able to return to work. Can you move them to more incentive based pay versus just cash pay, higher salary, right? Are there adjustments you can make? There's a lot of fear about people losing their jobs right now, so make sure you're mitigating that by having real conversations with your team and making a plan with your team. Number two, what jobs can your team do from home? What virtual work can be completed? Right? Cross train your employees. If someone's out, make sure others know where to pick up where someone else might have left off. Make sure you've got Slack or Trello or Google Docs or Zoom. I think I should make a whole other blog post just on the tools you need to work from home. Our entire team at the Boutique Hub is virtual. So I could give you a trillion tricks and strategies that we use because we all work from home every single day. All right, number risk number four. Is that what we're on? Risk number four? If you can't get inventory or the inventory that's coming is late and I mentioned this a minute ago, but let me hit it again. I've been hearing from many of you that there's plenty of inventory flowing in. For those of you that have been through LA and that have been talking to many of your vendors and I know specifically in our brands and vendors group at the Hub, we have so many vendors that are like guys, we have all kinds of things ready to ship, right? There are plenty of vendors that source outside of China. There's all kinds of opportunity. There's plenty of stock. There's not going to be a shortage. Do not over buy right over buying is the death of business. Don't do it, but just talk to your vendors. Ask and do in search of posts on things you're looking for inside the brands and vendors group. Keep in close contact with those trusted vendors. So again, once you're ready to start ordering again, maybe you take a little hiatus on as many new arrivals as you're used to. But don't quit posting them, please. You got to keep the energy high. You got to keep new and exciting things coming. If you slow down, your customers slow down. And remember, you can only sell what you show, right? If you slow down and you're only posting three new arrivals versus 15, what's your income potential? It's as much as you're going to sell out of three new arrivals. So if you slow down, so do your sales. So keep that in mind and make sure you're keeping a healthy balance of what's in stock and what you're pushing versus what's turning. Alright, here's your time to source local makers or artisans to collaborate with. Again, something your customers are going to like knowing that they're buying something local, especially in this scary time. And finally, this is the time to restyle, reshoot, re merchandise and repost what you have. If people aren't ready to buy your new arrivals or sell through as quickly as you're used to, you always have the ability to make something old look new. So keep restyling, reshooting, re merchandising and keep the excitement up. If you're excited about a product, your customers will be. If you're not excited about a product like, oh my God, this T shirt, your customers aren't going to be. Right. They will match your level of energy. So keep that in mind as you restyle, reshoot merchandise and repost. Make a plan for your inventory in coming months. I know there's no crystal ball, you guys. And that's kind of the scariest part of this whole thing is we don't know what's going to happen with our economy. We don't know what's going to happen with, you know, just like buyer trends in the next couple of months. So as much as you can, this is your opportunity to dig into your numbers and understand your typical sales patterns, your typical turning categories, your cash cows in your business, and make a buying plan for them. Lay out what, what are your plans for June and July and August and September? What categories are you going to buy into? And just start looking for those opportunities now. All right, scenario number five. 1, 2, 3, 4, 5, 6. Your cash is gone. That's a real scenario. Your cash could be gone. All right, so what do you do in that point? Couple things. Number one, before we get there, let's talk about again the break even. What's our green light, yellow light and red light scenarios and what actions do we need to take? So first thing is we've got to find ways to cut expenses, not investments. And there's a difference. If you're looking at your P. L, we've got income and then we've got expenses. But within your expenses, there's expenses that you could cut, but there's investments that provide you a return. Right? You can't cut quickbooks or you can't if, if you have a whole bunch of Facebook ads running, let's say, and your retargeting ads are your cash cow, right? And they're bringing in like an 8 times roas. Don't cut those. Right? Keep those coming. But maybe you've got traffic or conversion ads that you're going to slow down in the meantime just to save some cash. If they aren't converting at the level that you want them to or contractors or contracts or outside marketing agencies. Maybe there's capital improvements you've been working on that you're going to take just to hold to. Maybe there's things that are unnecessary like XM radio, Spotify, fancy supplies. Maybe you aren't going to order from I love sticker mule. Maybe you aren't Going to order from Sticker Mule. Maybe you're going to order something a little plainer for the time being or you're going to go without stickers or you know, something where you're just temporarily taking a break from those things. Maybe it's eating out, maybe it's negotiating credit card fees or insurance policies or your phone. Right. Look for those things where you can cut back for the time being. Subscriptions to things like social media, scheduling, apps for the time being. Can you manually post those? Everyone has an opportunity to get lean when they're forced to. And it doesn't have to be indefinitely. It can be just for a short period of time and then you'll know kind of in ranking order when you want to start bringing those things back online. But look for things that are expenses versus investments. And I mean, I have to say personal plug, the boutique hub, that is an investment. We are going to find you every way to make it through this process we possibly can. That is number one priority on our team's plate right now. So. So whether that's the things that go in the training library or live trainings every week, we will be here for you to be the forest, the person that sees the forest through the trees when you're hustling, trying to get some cash back in your bank account. All right, so we will be there for you. So things that are investments, like the hub versus expenses that you can let go of for a period of time. The other thing I just kind of want to throw out there is something to think about is, you know, a lot of times I hear people ask about PayPal loans or Shopify loans that are so common today. I want to shift your perspective for a second to think about what about working with a local bank? What about working with a line of credit from your local bank? Because your local banker has an invested. He's invested in your local economy, he's invested in your business. He wants to see local businesses succeeded because that impacts a local economy. And all of his accounts. Shopify and PayPal unfortunately don't have that vested interest in you or the economy. They want to get their money back and they will take it out of every purchase that is made. So as you're making those decisions, it's probably too late now. But as you're making those decisions in the future, think about building a relationship with a local or a community bank for your banking relationship and for lines of credit for versus taking them online. All right, here's also your time if your cash is gone, to Find ways to build your higher imu, your initial markup and taking fewer markdowns. Again, back to restyle, reshoot, re merchandise, and build more engaging content. Build more engaging content. Even if cash is gone and desperation is a stinky cologne and we're selling, selling, selling. Like, please buy something, I need the money. Please buy something, I need the money. Switch your mindset to creative mode. How can I just engage with my customers? How can I get them to click on something? The more you focus on clicks and relationship and engagement, the more the money will come, the more the eyeballs will be there. Money follows eyeballs. All right, so get creative with your content and then restyle, reshoot, you know, great pictures of your merchandise. Make sure you're excited about it and it's fun, and those sales will start to roll in. All right, those of you that are concerned about travel, I don't have an answer about this one. Although it's important to research upcoming events, their plans, if things have been rescheduled, their likelihood to cancel, and follow all CDC guidelines when it comes to travel for the time being. I know there's so many people, us included. We have the Boutique Summit that are planning events that are like, oh, man, this just threw a huge wrench in plans. So be grateful.