MBA1567 Will Your Business Survive? + Free Ride Friday

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Hey there. Today is Free Ride Friday so make sure you hang on to the end of the episode to hear who won this week's Free Ride. Every Friday we give away a membership to one of our programs. We're giving away easy course, our 30 day course on how to build your own online course over at EasyCourse co. It retails for $500 but you can win it for free. Just leave us an iTunes rating and review and you enter our weekly random draw. It's that simple. Just listen in on Friday to see if you won. It's our way to say thanks for showing us love on itunes. All right, let's jump into today's episode. Hey O. Welcome to the $100 NBA show where we know business is hard. That's why we're to help every single 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 in today's episode you will learn will your business survive. Today's a very important episode. The Global pandemic of COVID 19 has really changed the world in many businesses. And the hardest part about it is there is no clear finish line in many places in the world, the curve is not flattening record high cases in countries like Brazil and the U.S. this is causing many businesses to question if they're going to be able to sustain themselves. Some of you who are listening right now are asking this question, will I survive? Will I make it at the other side of this pandemic? What do I need to do to to make it happen? Or should I fold and cut my losses now? How do you plan for an open ended crisis? Well, I have some suggestions to help you answer this question and get some clarity and comfort when it comes to the survival of your business. So let's get into it. Let's get down to business. Many of us are looking at our profit loss sheet. We're seeing revenue going down every single month. Our expenses haven't changed. We don't know how, how much more Runway we have. Whether you're a physical business, an online business, a product business, a service, your baby is on life support, you're trying to really make it through. But for many people around the world, and we're in a global economy, it's hard to predict. Since there is no clear end to this pandemic, things are getting worse in many places like we mentioned. So in today's episode we're going to dissect. Firstly, are there ways we can allow our business to survive to make it through the other end? And if not, on what's the best course of action to ensure we cut our losses, close our business and serve our employees properly? We'll also talk about what that means for you and your journey in entrepreneurship. But let's begin with the basics. The oxygen of every business is cash flow. So if you're making enough money, you could pretty much survive anything. And when I say making money, I'm talking about profit. We talked about this many times on the podcast, but but one of the first things you should do in any situation is to cut your biggest expenses as much as possible. I'd recommend cutting any services or any kind of nice to haves in your business before you cut any employee salaries or employees. Even if this means a little bit more work on your end. Whether that's changing your, you know, your hosting, your servers or you host your website to something cheaper, or negotiating with your suppliers or even with a contractor that is coming in to help your business. This is the time to negotiate. You can negotiate new rates, you can negotiate your lease on an office. If you're in an office and you want to keep it despite, you know, working from home, if you have a Business loan. This is time to negotiate or to refinance at a lower rate. This is the time to really get the most and clean house when it comes to your expenses as much as possible. This is the first thing you need to do so you can take home more money even though you're making less than normal. Second, you're going to increase your revenue right now. Why? Because you want to make sure that you can buy yourself some time, whether that's six months, a year. We don't know when a vaccine's coming. But the point here is, is that you want to secure as much cash to see as Runway as oxygen for the next six months to a year. So you can delay this decision indefinitely and hopefully forever. And one of the best ways to do this is to call upon the people that love you the most, your customers, and to lock in long term types of agreements, long term contracts, whether that's a service contract you're, you know, offering them or a product, whatever it is, ask them to go yearly, ask them to lock in the contract you have with them for a longer period of time. Get some cash up front. If you're selling physical goods in your, you know, B2C, offer some sort of discount if they spend X amount of dollars. I've seen a lot of e commerce stores do this now where they say, hey, if you spend $500 or more, we're going to give you 15 on the whole cart. This gives the store a chance to really double down on many people, they're okay with this. They put it on their credit card. They're not in so much financial strife as some other people. And you as a business can leverage your loyalty that you've built with your customers and get some Runway. This is all a numbers game. As long as you can secure six months to a year of your expenses. You could say I'm good. But you can't do that without asking for more money, asking for more sales, extending your contracts, extending your services to a longer period of time and getting some money up front. Another thing you could do to increase your revenue is to offer a new product, a new service that's low cost but high yielding. And what you want to do is you want to secure the bag before you deliver. What do I mean by that? Well, many people have been emailing their list offering a new offer or service. Say for example, they're a business coach and they're offering website maintenance and development. You know, many coaches, they're coaching people like maybe they're a fitness coach and they're coaching other fitness people in the industry or business coaches or whatever it is, they, they can offer something like that and say, hey, if you pay me $6,000 upfront, I will maintain your business website for the next year. I will develop it, help you. I have a dedicated, you know, team that can help you out. And then what you can do is you secure those spots. Say for example, you sell it on July 1st and then August 1st you start working on their sites. What you're doing here is you're doing arbitrage. Basically. Let's say you get 20 customers to take on this offer. That's $120,000 right there. And you can definitely hire a full stack developer to help you maintain these sites. A freelancer, you can contract them out on upwork or freelancer, you can get them from the Philippines or India and get some really good quality developers in this example, or employees and you can make a good profit margin. This is just an example, but the point here is that get creative about what you can offer your current customers or new customers in addition to your regular products and services. This will allow it again to get more revenue and give you some Runway. If for any reason you've tried all this already in the next month and it's still not enough to get you the Runway, you still, you've given it all you got and it's just not enough for you, for you to survive, see how much it did get you. Maybe it gave you three months, four months. You can at least delay this decision a few months with the hopes the economy can tick back. And you can also double down on these efforts in the next coming months to try to add more money to the Runway. But if you need to make the decision to close down to say, hey, I gave it all I can, I just got hit too hard, it's time to communicate. It's time to really plan this out. And I want to first say that when you tell your customers, when you tell your employees that you're going to have to close your doors, it's a tough message, it's a tough conversation, but it's not the end of the world. This is just one business. You're an entrepreneur. You haven't failed. There's another business in you, and another one and another one. You can continue to build businesses in a new climate, right? This also means that you could rehire a lot of your employees in this new business. At some point you could serve your customers in some other way. So make sure that's communicated as well. If you're going to communicate with your customers. I recommend you do it face to face with a video, at least so they can see your sincerity. Keep it simple, keep it short, but again, just be transparent. Same thing with your team. You want to have a team meeting and give them as much information as possible, a timeline and what it means for them. This is okay. It will pass. It's gonna hurt like hell in the beginning when you have to do this. But this is just one hurdle in your journey of entrepreneurship. I have built businesses that did well, that failed, that tanked, that ran out of money, all kinds of things. But I got up and I kept going and I started a new one. I started a different business. I started to learn from the past. And the only thing you can consider as failure is is giving up. If this is what you want, if you want to be an entrepreneur, don't give up. There's always a new opportunity, even if it means you're going to take a short pause, pick up a job, be a freelancer for a little bit, utilizing your skills. That's okay.

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Gas, snacks, tolls. This trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood.

What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Tuxt and data detour to Metro. Get that more for your money feeling only at Metro by T Mobile.

Just bring your number $30 first month and $25 after with autopay not available if with Metro or T Mobile in.

The past 180 days.

To wrap up today's lesson. If for any reason you're gonna need to close the doors of your business, you are not the first or the last business, especially in this environment, that's gonna have to do that. And it's a great lesson because history repeats itself. You know, this is not the first time the world has been in a crisis. Whether it's wars or famine or pandemics, whatever it is, economies will suffer when people are suffering. Our job is to adapt and to make sure we learn from these experiences. Business is super hard, and this is why not everybody does it. Most people don't. But when you go through these things, it builds incredible character. It builds incredible skills. It makes you who you need to become to build a great business. Thank you so much for listening to the $100 MBA show. Today's episode's not over. It's Free Ride Friday. I gotta give away a lifetime membership. Two Easy Course let's see who won this week's Free Ride. And the winner is S. Balakar. S. Balakar says Excellent. 5 stars. I stumbled upon this podcast and I can't believe the wealth of information you share. Thank you for the little gems of advice. In every single episode, I'm constantly pausing and looking up books or looking up terms and doing YouTube research on the things that you bring up. Your show is quick, informative, and to the point. Thank you. Well, thank you, S. Balacar, for the great review. You are a Free Ride Friday winner. Your mission is to email me over at omar100mba.net so I can hook you up with the lifetime access to Easy course. If you want to win a free ride, just leave us on itunes rating and review and you enter our weekly random draw. Listen in on Friday. It's that simple. And don't forget to hit subscribe so you never miss a beat. So when the next episode comes out, it's right on your device. Before I go, I want to leave you with this. Some businesses are finding scaling down their business, their expenses, and even maybe their team during this time a healthy thing and actually something maybe they should have done before this all happened. Maybe they were too big, too bloated, and they were wasting too much money. So this is a good time to take inventory. Even if you're doing okay during this time, it's a good chance for you to take a look and say, hey, where can I be more efficient and be more profitable? That's the name of the game. All right, thank you so much for listening. I'll check you on Monday's episode. Until then. Take care. Gas, snacks, tolls. This trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood.

What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Text and data detour to Metro.

Get that more for your money feeling only at Metro by T Mobile Just bring your number.

$30 first month and $25 after with autopay not available if with Metro or T Mobile in the past 180 days.