MBA1510 Q&A Wednesdays: How long should I plan for COVID-19 to affect my business?

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night not working on my business but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things, of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with intuit QuickBooks QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform.

Ready to save on new tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Product perks include Dell Rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals.

Hey oh welcome to the 100 ARM, your personal business coach every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online and today's episode is a Q and A Wednesday episode. On our Q and A Wednesday episodes I answer a question from one of you, one of our listeners. If you have a question you want to ask, just email me over at omar@100mba.net Today's question is from Will and Will asks how long should I plan for COVID 19 to affect my business? My business has seen a 20 to 25% drop in sales in one of my product lines. I'm wondering when is the best time to start pivoting to introduce a new product line to make up for that revenue? Is it worth the investment and the time of doing that if COVID 19 will be done and dusted soon enough? Looking for your insight. Love the show. Thanks Omar. Will Great question Will. And it's the question of the hour. Everybody wants to know how long will this thing last? COVID 19 it's kind of taken over our 2020 in a big way and it's affected a lot of businesses and a Lot of people around the world. And the hardest part about it all is we really don't know. It's. There's like an indefinite timeline of how long will we all be in quarantine? How long will things be locked down? How long will things just not be the same? So in today's episode, I'm going to give you my advice how to plan for something. You really don't know what's going to happen or not. What should you do? There's a lot of different estimates out there. We're going to talk about them and talk about which one should you anchor onto, which one should you say, hey, this is what I'm working off. Let me plan accordingly. There's a lot to cover in this one. So let's get into it. Let's get down to business. So Will asks, how long should I plan for COVID 19 to affect my business? This is a big, big question a lot of people are asking and I'm glad that he asked it so I can cover in today's Q and A Wednesday. Now, how your business is affected will depend on a lot of factors. Is it affected because people are at home? The lockdown, whether it's a cafe or physical business or a non essential business, Is it affected because of travel? Is it affected because of a lot of other reasons? Is it affected because you're in the travel industry? Is it affected because you're a physical service that serves people in real life? The reason why these questions are important is because many people believe that there'll be a staggered approach to coming out of COVID 19, meaning that some businesses will reopen after a certain period of time. Some businesses won't. A lot of the scientists from the World Health Organization are saying that one of the last things that will be permissible is actual international travel, because that's where you really can't contain things. So travel is probably one of the lower things on the list. There's so many factors that are totally out of your control. One thing that we know and heard from the World Health Organization is that one of the things that's gonna really kind of put an end to COVID 19 and be kind of something definitive is a vaccine. And vaccines take a while to develop and to test and to mass produce and make available to the world. And the fastest that they say that it could happen is in 18 months. That seems like a long time, a year and a half. But that's the, you know, the fastest estimate of when a vaccine will be available. Until a vaccine is out this is going to be a factor in our life. There will be some effect on your business in some way if it's affected now. Even if they open up physical businesses, restaurants, cafes, even non essential businesses, social distancing rules will still be in effect where you're just not going to have as much traffic as it used to because of these rules. So I'm a big believer of planning for the worst case scenario and hoping for the best. I love what Warren Buffett says about investment and about planning. He says always plan for the worst case scenario. Optimism is not your friend when you're trying to plan for your business. Do not be optimistic when it comes to your planning. You can be optimistic about your product, your features, all that kind of stuff. Be optimistic about your team. But when it comes to deadlines, you're planning, you're making investments, you're making decisions. Always plan for the worst case scenario.

Why?

Because if it doesn't happen, great, you're ahead of the game, you are in the safe zone, right? If it does happen, you have planned for it, you have a contingency plan. So 18 months to a vaccine, that seems like a long time. But if you start pivoting now, let's say for example, you start a new product line and by the time you get it out, it's two months from now and and it's out and you're starting to sell and it's starting to compensate for your loss of sales from your other product line. Let's say we are fast tracking things and things get a whole lot better in six months. And you have this new product out for four months now and it's making money. And now your older product that wasn't making money will also make money. Okay, so now you're making surplus. So you've positioned yourself where you have short your losses with your new product. But you also notice now have something that is selling in addition to your best seller from before. So because you plan for the worst case scenario and something great happens, something unexpected happened, we got out of this in six months, you're in a better position. The other thing I want to mention is that weigh out the costs of doing this new product line and can you get an roi Regardless of what happens, you know, if things get better or worse, if things get better or worse, are you still going to sell this product line? Well, obviously this new product line will help you during this state of quarantine. And COVID 19 this is why you're releasing it. Can you continue to sell this product? And still make a profit off that product line, even if things do improve and we're back to normal? If the answer is yes, then you have no loss here. You're investing in something that's long term, that's going to get you a return on investment, regardless of the change of our condition. At COVID 19, you know what's happening in society and happening with your business and how it's affected. The important thing to remember here is whatever investment you make to salvage the situation right now, as long as that investment will still pay off after COVID 19, you're good to go. You have nothing to lose here because that investment will pay off in the long run and in the short term. So I'm a big believer of planning things out in a worst case scenario, being waiting for the vaccine. So for me, this is how I'm running my business. This is how I'm running even my personal life. Hey, I'm just planning. I won't go to a gym for the next 18 months. I know that sounds a long time.

It is.

It doesn't feel good. But hey, get over that. Just get comfortable with that. Okay, now that I know I won't be going to the gym for 18 months, what can I do in advance? Or instead I should say, I can sign up for yoga classes online, I can do programs online. Maybe I can sign up for a bodyweight training program, whatever. The point here is that I can move on once I get over the bad news, when I get over the worst case scenario. One of the best things to do to fortify you and your business is to play out bad case scenarios. Worst case scenarios in your business, what would happen if this disaster happened outside of COVID 19, just like you had a breach, what would you do? How would you combat that disaster? How? Having a game plan is great, but what's also great is going through it emotionally understanding, okay, that would really stink. But this is what I would do and this is how to react so that when it does happen and you'll have emergencies, you'll have catastrophes throughout your career. And that's just the nature of the game. Sometimes you're gonna have to solve problems and put out fires. So when it does happen, you're ready and you're not all over the place emotionally because you've already been through it, you already understood that this could happen. So with your business with COVID 19, planning for the worst case scenario allows you to have a sense of security, a sense of calm. I'm making sure that my business is good to go, and we're pivoting and we're making progress. And even if this thing lasts 18 months, because that's how long it takes to get a vaccine in everybody's hands, then I am good to go. If things get better early, I'm still in a good position. All right, so this is my advice to any business who's kind of in limbo, maybe hoping that this will be over in a few weeks. This is just not the reality of the situation. And because we're entrepreneurs, we understand that, yes, this has a tremendous toll on the health, the well being, and, you know, the, the, the condition of our medical industry in our countries. But it has a tremendous effect on, on the economy. So we got to shore up our finances. We got to make sure that we're making as much money we can right now. We can't just sit around and do nothing. We gotta have a plan B, a plan C. We gotta make sure we plan for the worst case scenario. This is a time when you're collecting the acorns because, you know, we think winter is now. No, winter is coming. The effects of all this hasn't really hit us home. I was just reading an article that in Australia, the real estate prices have been going crazy the last few years. It's been a huge bubble. Uh, real estate is gonna drop by 50% at least. So the property that people have, the value will drop 50% in the next 18 months. So we're not feeling the effects yet. Cause right now we're just new to this. But come 2021, 2022, this is what's gonna hurt. So this is why we gotta plan for the long term. Make sure that our business can sustain itself now and in the future. So take action now. Don't wait around and plan for the worst case scenario with Sylvania.

Seeing better while driving at night starts with you. Because headlight bulbs dim over time and can lose up to 50ft of visibility before burnout. That's why you shouldn't wait. Upgrade your drive with brighter lights for better visibility on the road ahead. Sylvania's step by step installation Video guides make it easier than ever to take control of your nighttime clarity. All without a trip to the mechanic. So before a burnout darkens your day, upgrade to Sylvania and see better tonight.

Looking for a Valentine's gift she'll truly love. 1-800-flowers.com knows what she wants. For 50 years, 1-800-flowers has helped guys like you get it right. Delivering millions of fresh Valentine's roses nationwide. 1-800-Flowers offers premium fresh cut flowers backed by their seven day freshness guarantee plus same day delivery when you need them on time. Valentine's is coming up and bouquets are selling fast so don't wait on this order today at 1-800-flowers.com sxm. That's 1-800-flowers. Com sxm.

To wrap up today's Q and A Wednesday's question from Will. How long should I plan for COVID 19 to affect my business? My advice, 18 months minimum. This is gonna allow you to think long term, to build a solution for your business now and in the future. It's going to allow you to have a sense of calm because hey, I'm planning just in case this is going to go longer than I expected. And guess what? You're going to stumble upon great opportunities that you never saw before for your business. Not just for now, but just for the future. I was just speaking to a cafe owner, a local cafe owner in Australia. And because he's got no patrons visiting him and staying and dining in, he's doing all takeout and delivery. He's built a huge e commerce presence over, you know, a few days time to be able to deliver meals to people's homes for the whole week, for the whole month. An option he never did before, an option that he never had in his business, and now it's here to stay. So he's literally going to double his business when this is all over. This is somebody who's going to hit the ground running and come out of this stronger than he was before. You need to be one of those businesses. You know, you might be in a struggle state right now or you're just kind of making ends meet. But if you have the foundation, if you plan for this, you're going to see your business grow and really hit the ground running when this is all over. If you plan for the worst case scenario and you make sure you're building for not just now, but in the future, whatever you're building now, that's going to help you make ends meet, make sure it's viable even after COVID 19 is done and dusted. Thank you so much for listening, guys. I know this is a very, very heavy topic. I know that COVID 19 has been a big rainstorm on a lot of our businesses. But we really need to understand that entrepreneurship is won by those who know how to pivot, that know how to make decisions and change and to adapt. This is what entrepreneurs are great at. And you can do this. Okay the point of entrepreneurship is to be successful in business. Now, if success in business means one idea versus another, go for it. Okay? Sometimes you got to change things to make things happen. Thank you so much for listening. Make sure you hit subscribe so you don't miss our next episode. By hitting subscribe, you automatically get the next episode right to your device. We're on Spotify, we're on Apple podcasts. We're on Stitcher Radio. We're on itunes. We're on everything, right? We're on Overcast and Himalaya. Every single app just hit that subscribe button right now. Before I go, I want to leave you with this. COVID 19 is a real, real issue, right? It's a real downer, but it's just one of many things that happen in life and in business. This is just one example. You know, this is cyclical. You know, there are going to be financial crashes, there are going to be economic problems, there's going to be wars in the future. Unfortunately, this is just the reality of the world we live in. We need to make sure that we fortify our business against all these calamities. Okay? And this is a good time. We have a bit of time on our hands to think about how can I make sure I protect myself and diversify my revenue streams. Thank you so much for listening. I'll check you in tomorrow's episode. I'll see you then. Take care. Of.

With Sylvania, seeing better while driving at night starts with you because headlight bulbs dim over time and can lose up to 50ft of visibility before burnout. That's why you shouldn't wait. Upgrade your drive with brighter lights for better visibility on the road ahead. Sylvania's step by step installation video guides make it easier than ever to take control of your nighttime clarity, all without a trip to the mechanic. So before a burnout darkens your day, upgrade to Sylvania and see better tonight.