How Business Owners Can Handle Coronavirus

Owners can handle coronavirus. I am Ramit Sethi. I'm the CEO of I will teach you to be rich. And we're going to talk about it now. I will first start off by saying that I heard from tons of business owners. Some of you have pivoted in an amazing way in just the last few days. Others of you are paralyzed and stuck. And as a business owner who has gone through great growth, but also I've gone through a tremendous decline in our business before. I want to talk about some lessons that I have, what I've learned and what you can do with coronavirus right now. So here are the things. Oh, I'm sorry, I forgot. Let's all get together and do our daily ritual of hand sanitizer. Thank you very much. Okay, tonight, the first what I'm going to do is I'm going to share some lessons and I want to share some actual comments that I've gotten from real business owners. What they're doing and you're going to hear in their voice. Some of them are distraught, some of them are hopeful. Some of them don't know what to do. So we're going to talk about all these situations and then we're going to do questions. The first piece of advice that I have for every business owner out there is move, get moving, accept reality and make a plan. You've got to. In life so many times, the common thing we do when we're startled is we freeze. In business, freezing is death. So the answer is to move is to accept reality. Customers are going away. Money may be drying up. Nothing is going to change and get better overnight. I can guarantee you that. So what are you going to do about it? You know, I remember I always asked my friends on their birthday, what's your birthday wisdom? And you know, usually I get these text chains and friends are like, make time for what's important. That's what one of my co workers recently said to me. One year when my business was going through a large decline. My answer to this group of friends was, it can always get worse. And that was something I learned painfully, which was you might predict 15% revenue decline. But what happens if it's 50? What happens if it's 50% two years in a row? What would you do about that? When I say accept reality and make a plan, there's a couple things that are really important for you to know as a business owner. First, you must believe that your business is important. You've got to believe it. Do you know how many business owners are Writing me right now and saying, I, I don't know if I can sell my luxury. Good, nobody cares about that anymore. And I want to get your head on straight. If you don't believe in your business right now, then your customers will never believe in it. They can sniff it out and customers are smart. I've always believed that. That's why my business has over 42,000 customers. In fact, how many people here have ever bought something from me? What was it? Type it in there. Let's hear what some of the answers are of products that you've bought from me and then I want to hear from you. Would you recommend my business, my products, to other people? So while those answers are coming in, I'll come back and check on them in a second. I want to say you've got to believe that people still want to buy. And this is important. For thousands of years, people have spent money to adorn themselves, to entertain themselves, or for pure luxury. They've also spent money on their bodies, on education, they've spent money on their domiciles, their homes. So yes, there's been a shock to the system. Yes, accept that. But you must believe that people are still buying things that are not pure necessities. What are some of the comments coming in for? Are any of my customers watching tonight? And what are they saying? Cas?

Yes, tons of customers. So success triggers your book, CTA, ZTL finishers, formula, dream job.

And what do they say? Do they say they would recommend these products or the business to other people? I can't even see the comments right now.

Yes, yes, yes. Lots of yeses.

Love it. So there are people who have bought and there are people who will buy again. You have to believe that. But, and this is really important, you also have to accept that your business just might not survive. Now. This is really hard. This sucks the air out of the room. But the minute you accept, I might try everything I possibly know and my business might go under. That is when you can start making a plan. And this is really, really difficult because probably nobody has ever told you to your face your business might collapse. Your business might not be here three months from now or six months from now. But you need to both believe that your business will survive and also accept that it might collapse. Then, and only then can you make a true plan. Finally, do not count on magical beanstalks. I got an email or a DM from somebody just 15 minutes ago. He said, can you talk to me about the potential of government relief? No, no, I can't and neither can anybody else. Do not count on magical beans and a magical beanstalk. Maybe the government will do something for your business. Maybe something will happen that will come down from the sky. But you need to accept that it's probably not going to happen. So all you've got is what you've got in front of you. You have your existing customers, you have your marketing assets, you have you what you know and that's it. Nobody's coming to rescue you. It's only you. When you accept this, this is the moment where you can start to make a plan. Now I want to share a couple of comments I got from different readers. I'd like to encourage you to go support them if you can. This is a Pilates instructor, Katie Dot Yip on Instagram. I believe her business is contralogy. She says as a Pilates instructor I moved my business to virtual lessons and classes. I'm lucky my profession has the capability of working remotely. I'd been initially resistant to virtual instruction because I feel as if there's a curtain between myself and the client. But given the current situation, I decided it was necessary. I use Zoom to teach clients. I accept payment through Venmo. And then fortunately she said it's only about a quarter of my income. But I took your advice and I have my year long emergency fund to supplement. So two things I notice about what Katie said. Number one, fortunately she's been following I Will Teach youh to Be Rich and she's read my book and she's already pre planned ahead. That's not the case with everybody. But for those of you who have done it, awesome. You're already ahead. The second thing is that within days she accepted reality and made a change. Think about it, she said. I've been resistant to virtual instruction because of blah blah blah blah blah. Suddenly your back's against a wall. You have to adapt. And this is where again you might be able to innovate and pull your way out of this or your business might collapse. But the best thing you can do is accept it and move. That's what you got to do. One more comment. Another fitness comment. Revival Strength this is interesting. Mostly scrapping our next launch of equipment heavy online workout program instead made a guide to creating great home workouts with low cost equipment. Creating a new program using this equipment. We sent our on site clients home with our dumbbells and kettlebells and we're training them remotely just as we've done with other remote clients for years. Think about the insight there. The kettlebells are not being used. Hey, our best clients who've been training with us and spending thousands of dollars, take them. We trust you. We know that when this is over, you'll be back and we will be here too. That is a business leader. That's amazing. That's Satya Khan on Instagram. Revival Strength. Finally, one of my students, Sarah Jones from Introverted Alpha, she said, I launched a self study course this week and I did two new things. One, I emphasize how this is the perfect time to learn while at home. And number two, I rewrote everything for a gentler, more personal tone. So far, they're grateful and joining. I love these business owners. They've accepted reality and they are moving in a matter of days. So that is the first lesson tonight for business owners during coronavirus. Accept reality, move and make a plan. The next thing that I want you to do, business owners, is to get candid with your employees and get candid with your customers. Now, who here saw a message that I sent out a few days ago? What was that message that I sent out to my employees, to my customers and to my community? What I tell them I accepted reality. I told them first of all, for our employees, I spoke to them first because they are critical. They are amazing. They're critical to this business. If our employees are safe and secure, the rest of our business will follow from there. So I called them first. I got an all team called and I told them we are very fortunate that we have a business, that we work from home, we work remotely, we know how to do this. We are very fortunate. We have digital products, we have tens of thousands of customers, no inventory. So we should thank our lucky stars. The second thing is that your safety comes first and your family's safety because you may not get sick. But if your mom or dad or grandparents or spouse, kids get sick, you're out of the game. So we want you to take care of them. Next, we're issuing a $1,000 stipend immediately for anything relating to coronavirus. Anything you need, extra supplies you want to buy. I don't know what people on a farm buy. You want to buy hay for your horses? I don't know. Whatever it is related to coronavirus, send us the bill. Thousand dollar stipend available immediately. How. How do you think our employees felt when we did this proactively about a week ago? They felt like someone was looking out for them and someone was being candid with them. Okay. I also told them because this is not just like everybody singing Kumbaya around A fireplace. I told them things are about to get very tough if you get hit. If you contract coronavirus or you are out. We need you to fill out a contingency plan so the business can keep running. So we are being realistic. Some people are gonna get it. That's gonna happen. And everybody, including me, filled out a contingency plan so that the rest of the company knows for you, the business owner. If you have employees or a team, you need to talk to them first. You need to say, look, here's the situation. We don't know what's gonna happen, but we know that in the last week revenues have dropped, let's say 50%. We think it's going to be bad for a while. Now. I'm going to be straight with you. I'll tell you what I know. I'll tell you what I don't know. I'll tell you that this is how much cash we have in the bank or this is how many months we can sustain it. I'll tell you that we are cutting expenses right now. I'll tell you that I hope to protect everybody's job, but I can't promise that based on what we know. So this is what I'll commit to you and I'm going to check in with you every week and give you updates. But this is the state of the business and this is real. Start with your employees. The next thing is you get candid with your customers. We did this. We extended a two month grace period to any of our customers before anybody asked us for it. Again, speed matters right now. What can you do with your customers? Well, you can do so many things. Let me read you a couple of comments. This is from Craig Runners High in New Jersey. We're a specialty running shop in Central Jersey with people concerned about being out in public. We're offering curbside pickup of products and free shipping on orders very well received and has people appreciating the difference between the small businesses and big box stores. Craig at Runner's High in New Jersey, amazing example of being agile as a small business and contacting customers. Listen, there's no shame in contacting your customers and saying here's a situation, we need your support. If you would like to come by. We use gloves, we'll put it out on the curbside, etc. Or buy a gift certificate right now and you can use it anytime. It never expires. These are the kind of things you need to communicate to your customers. Let me give you another example. This is from Quick Shack. He said we run a factory for the first time in our 65 plus year history. We're going to run split shifts. We're essentially breaking our personnel into two teams, half day, half night. We're also running a skeleton office crew. We've designated a particular door for visitors and one for employees. Now he said, do you have any additional advice for manufacturing plants like ours in one day? We have it good because we're getting lots of orders. However, there's lots of tension because of whatever. All other extra precautions are already in place. Six feet away. Sanitizer by each store for staff. Gloves are mandatory unless eating, etc. What do you think this business owner could do? This owner needs to write an email every single week. This owner needs to put pictures of their gloved employees holding up their gloves and smiling. They need to show how clean their factory is. They need to say five things we are doing to protect you during coronavirus. You need to reassure your customers what you are doing. And oftentimes I find that business owners are doing extraordinary things, but they just don't think about going and telling people. So remember, get candid with your employees and your customers, both the good and also the bad. Number three. This one is a bit of a downer, but also true. Cut discretionary expenses. What do I mean by that? Let's talk about what discretionary means. You know that new project that you've been thinking is really cool? It's not so cool anymore. Put it on the backlog. Stop immediately. Do not fall prey to sunk costs. Oh my God. I'm already 70% of the way there. It will be more expensive to stop than to just finish it. Stop. Money in your pocket is better than. Is better now than later. So even if you have to pay an extra 30% later, do it because you want to cut these expenses now. Notice I'm talking about discretionary. I'm talking about things that are nice to have. Oh, I was about to. I don't even want to say I was. I'm going to say something, but then I might destroy half the people's businesses watching today. So I'm not going to do that. What I will say is discretionary is something that you want to take a hard look at. Is it going to help you sustain your customers? Is it going to help you grow? Yes. Then spend it now as remember, this is different than personal. Personal has a different calculus. Business has a different calculus. You want to think about things that's going to help you keep the lights on and grow. Some examples you can do reduce your number of products. How much overhead do you have by just maintaining so many SKUs or different products you got to support it, et cetera. Chop them up, take them off the market. Stop with that right now. Focus on the most profitable I want to give you. Let's see a couple of examples here. This is one from Counter Space BR on Instagram. Listen to this. So good. I have a bakery and began limiting our menu to the top five items we sell. Added in a take and bake cinnamon roll option, plus cookie decorating kits. Think about it, kids. We have had a few great sales days and as long as we're allowed to remain open, I think we will likely be okay. Also added in shipping. We've shipped cookies to Mississippi, D.C. and Florida in our first day. This person said we are 84% over last week and increased our delivery app sales over 200%. This is amazing innovation. This is Counterspace BR a bakery on Instagram. Guys, what do you notice about this example? This is a business owner who accepted reality, made a plan, and then communicated it to their customers and their staff. Now, I can't guarantee that doing this is going to keep you in business. Nobody can make that promise. What I can tell you is it gives you the most likely chance of surviving to live another day. That is exactly what we are hearing tonight from these innovative business owners. All right, so that's cut discretionary spending. And finally, and this one is almost the opposite of what I just said in the last point, which is keep investing in marketing. This too shall pass. And when that day comes, you have a couple of options. One, you could cut everything to the bone. But when that day comes and when this day passes, where will your business be? If you cut it to the bone, where you go out of business, you know, a year from now, you're still out of business. So I want you to remember, when I said cut discretionary spending, I did not mean cut everything. What I meant was cut the things that you can hold off on until another day. But things like messaging your existing customers and acquiring new customers, they are so important that if you have the funds, you should not cut back on them. We saw this in 2008 and 2009. We saw case study after case study of businesses that cut back and were never able to recover. But the ones who maintained customer acquisition, even at reduced levels tended to come out much healthier. So I would urge you to keep investing in marketing. Keep in mind, it does not have to cost a lot, but it probably might take more of your time than it used to. So what have we talked about tonight so far? We've talked about how business owners can handle coronavirus. We talked about move, accept reality and make a plan. We talked then about get candid with your employees and your customers. Then we talked about cut discretionary spending. And finally, almost the polar opposite, it can seem like keep investing in marketing. Now, as we get into Q and A, one question that I want to ask you is what have you noticed me doing with my business? What am I doing? Am I doing any of these things? I want to wait as those comments come in because I want to see what do people notice? A lot of people saying, what should I do? I'm like, watch what the business owners you admire are doing. I shared some of the business owners I admire. I want you to tell me what you notice me doing while you do that. I want to share a comment from one of my students at work week lunch. Her name is Talia. She said I was ready to start with my first full time hire on Monday and I had to tell her today that I can only take her on part time. It was really tough. I also took your advice and cut a lot of expenses to make my Runway last longer. And she went on to talk a little bit more about how her business is doing. But what you notice there is that this business owner, Talia, is accepting reality and moving. And that is what I want to encourage you to do. So what are some of the comments saying about what they notice about our business?

You're sharing free advice with us. You're giving us value. Also, you're engaging with your audience, connecting with your viewers, building trust. So we'll buy from you in the future. Attracting more customers, visibility, discoverability.

I love that. So let me point out a couple things. I love all these observations. One thing I want to point out is that none of this is perfect. Like, we're recording this. My wife at next level wardrobe. Okay. She's amazing. Follow her on Instagram. She's helping me with record with my iPhone. You know, half the time this fire doesn't last. Okay. It's doing all right tonight.

It's better tonight.

I fixed some lighting. Like every day it's getting a little better. You know, I don't know where to upload these videos quite yet. They're on my YouTube channel, et cetera. But I'm here and I'm having fun. And I hope you're tagging friends and you're saying you got to watch this stuff. And I will also say this. There are so many of you who have asked me questions about I want to start earning my income or I'm a business owner, what should I do? Guess what? I've had business programs for 10 years. I got a new one launching next week. It's called Earnable. Do you think some of you are going to join that program based on what you've seen just in the last four or five days? Of course I already know the answer. I don't mean to wait for you to tell me. I know the answer is yes, because you are here, you're watching. You know this advice is good. You know you can't find it anywhere else. You don't care about the background. You don't care about the lighting or audio. What you care is that somebody's here listening to you and giving you advice. Simple as that. And whether you run a shoe business or a factory or a meal prep business, people want to know that you are listening to them, that you are there and that you are proactive. That is what matters. Alright, now I want to answer some questions. So if you got them, type them in. And I've got some that came in two comments from people worried about selling right now. One person said, how do I sell right now? I want to avoid coming off opportunistic. And the second person said, I'm worried my service isn't going to be a priority for people. He has a styling business. What can I do to make sure it survives or even thrives? I want to tell you a story about somebody who wrote me the other day. She said, ramit, I'm a nurse and for the last couple of years I've been thinking about starting my own business and following my passion. And she said, looking back, it all seems so foolish to think about helping people make logos. Who cares about that anymore? And I thought to myself, and I actually said this to her, you know, I respect what you're doing and I appreciate that you're in the healthcare industry, but to people creating a logo, it's not foolish at all. They actually want help. They need help and they are still willing to pay. I need help in my business. I am willing to pay and I'm also paying other people on a personal level. Today I asked my assistant to help me arrange some things. So don't be misled by the idea that that everyone has stopped paying for anything. That is incorrect. Incorrect. You must believe that your product and your business is important. Number one. Second, you must believe that there are enough people out there who have actually been following I will teach you to be rich for years, who have built up massive cash reserves and who are actually DMing me and saying, what should I do to grow right now. I know this is a bit politically incorrect, but what should I do right now? There are lots of people out there and there are even more people who simply need help with whatever is bothering them. Now, maybe it's not as many as it used to be, and if you have massive overhead, that's going to make it tougher on you. But there are still a lot of people out there who are willing to pay for help. So keep that in mind. We have a question from Instagram.

Yeah, so what about those that are employed in the restaurant business?

I think that my unfortunate feedback is that that industry is probably not going to be around for a while. And so my candid feedback is that some industries are going to take a really, really, really difficult hit. And there's no script I can give you, no magical mindset. It just is structurally gone. And I have gotten DMs from people whose 70 year old dads are Uber drivers. What are they going to do? And I can't say anything except I'm sorry for the situation that your dad is in or that you are in. So I wish I had a better answer. But the only thing I can say is that first piece of advice I gave you tonight. Accept reality. It is very, very hard for any of us to accept that what we have done, especially if it's for a long time, might not matter, might not have an impact on tomorrow. Okay, but. And while that may change in the distant future, what we have to do today is open our eyes and look around and accept reality. So just remember this, you may not be able to be employed in a restaurant in the next four to eight weeks, but you're still worthwhile. You still have skills, people still need help. Now how you find that is something we can talk about over the next few weeks. But accept reality. At least if you believe what I believe, it's going to be tough going in the restaurant field. And I'm sorry for that. Let me do a question, then we'll go back over there. How much cash did you keep in your business? I would recommend if we. If this were not happening right now, My general suggestion is six months of cash. Now that can depend on a lot of things. It can depend on your industry, it can depend on inventory and cash flow cycles. But in general, I'm more conservative and so I like six months of cash. Now, the difference with a business you can also be fairly responsive. So my accountant and the other financial people around me, we talk about these numbers. They don't like to see that much cash sitting around. Why? Because if you're running a business, you should be able to spend that to grow more. So a lot of financial analysts don't like to see that much cash. But when a time like this happens, then you're very thankful. So there are lots of intricacies of how much cash. It's really up to you as a CEO and your business. But six months is a general conservative benchmark. Got a question.

What do you think about people lowering their rates because of coronavirus?

What? Oh, okay. So in general, I don't like the idea of lowering your rates, but I will tell you what can be done. So what you heard from these innovative business owners that I shared tonight, none of them came out of the gate and led with price, did they? If somebody's not going to buy you at $100, they're probably not going to buy you at 75 or even 50. Now, you can try it. You can do a small little controlled marketing study. But in general, what you may find is that people want something completely different. So right now, we heard the Pilates instructor who went online, we heard the fitness program that sent the kettlebells home, right? We're hearing that people don't just want cheaper, they want different. So I would emphasize that to you. I want to give you an example of something I've been thinking about. How many people are home right now and get a haircut every four weeks or so? What are you going to do in four weeks? Have you guys thought about that? Now, what if you were a salon owner, what could you do? Or a stylist, what could you do? Well, you could say, nobody's going to pay because they'll just go on YouTube. Or you could contact every one of your clients and you could say, let me walk you through it. I will work with you over Skype video, and I will tell you exactly what to do. And by the way, you can, you could keep the price the same. You can lower it and say, you know what? I'm doing this because I know that when business comes back, you're going to come back to me.

Me.

It's up to you how you want to do the price. But you will realize that price is not the primary motivator. If you have someone who you work with every month, the relationship matters much more than the 50 bucks. So price is not the first thing to think about. But the Experience and what you're offering is critical. Here's a question from a photographer. I'm working on building a photography business, but I can't go out and shoot in public. My goal is to have something online in addition to shooting for clients. But I'm in the beginning stages and don't have years of experience to teach others. Alright, so for beginning business owners, this is exactly what we're going to teach in earnable. By the way, I got to say, iwt.com earn go there, put your email address in. This thing opens next week. It's killer. And one of the things I'm going to do in there is I'm going to show you how to package your ideas.

Right.

So what do you do if you're like, I'm a photographer, I'm a personal organizer. I'm good at relationships. For this person, there are a lot of things you can do. You can. In fact, I saw one of my friends and my headshot photographer, Peter Hurley, he's offering one on one mentoring sessions right now. You should kill to talk to Peter Hurley. He's arguably the world's best headshot photographer and he's offering one on one mentoring sessions. Yes, Take him up on it. You should pay him if you can afford it. But you should certainly watch what he's doing and see what you can do to offer that. What questions do you have?

Okay, next question. What about the events industry? What are your thoughts around that?

It's going to be very difficult. That's the bottom line on that.

Okay, next question. Where can we get your sweater?

We'll talk about, we'll talk about luxury clothing at another time. How about that? Oh, but.

And luxury styling too. Next level, wardrobe. I'm hijacking.

Damn. This show became a clothing pitch. What is this? All right, all right. So I want to kind of sum up tonight. So first of all, business owners, easy to get depressed. You're sitting there, you're reading the news, you're looking at these numbers and they are horrific. Stop doing that and start putting yourself in the mindset of I need to accept reality and make a plan. A plan. What am I going to do? Write it down. Who are your constituencies? You have existing customers. How many have you gotten on the phone with your top 10 best customers? Call them, tell them you appreciate their business. Ask them, what can you do to support them? What are you looking for right now? You might be able to make a thousand dollars right there. Amazing. Okay, I'm getting excited right now because I'm like this Sales stuff is so fun and interesting. But first you have to get over the analysis paralysis and the anxiety and just the utter fear that has been foisted upon all of us. And I'm not minimizing that at all. It's real. When my business first went through a large, large decline, I've told this to some of you guys. I stopped being able to sleep for months. I would wake up struggling to breathe. And I went to see a Dr. Ent and they did all these checks. They're like, you're actually fine. Are you under any stress? And I started laughing. I'm like, stress? Yeah, you could say that. And when we finally made a plan, it was like a movie. It was the first night that I actually slept through the night. So this can really affect you. And I do not want to minimize it. I want to acknowledge it. The next thing to do is once you make a plan, you got to accept it's not going to be perfect. I'd rather be in a professional studio doing all this cool stuff. But I'm here and the thing that matters is that we're together. That's it. So when you are executing your plan, don't get hung up on tiny details. Things are different than they were a while ago, but things will also go back one day. Now, I can't promise your business will survive or thrive, but I can promise you can give yourself the best possible chance. So, things I want you to do tonight. One, I want you to tag a friend who's a business owner and needs to read this. Trust me, you're doing them a favor. They have been surrounded with so much negativity that they're going to love to actually hear what they can constructively do with their business. Remember, you're also letting them hear these examples from these amazing business owners. Two, I want you to go to iwt.com earn and I want you to sign up there. I'm going to be sending you a ton of amazing stuff. You can also join Earnable. It's coming out soon. Knock your socks off. One of my favorite things in that program is, you know, everybody talks about selling. Be confident. What about selling in these times? I actually recorded real sales calls. I did. So you can listen in and then I analyze them and tell you why they worked or why they didn't. It just puts you in such a different mindset. And three, I want you to email me Ramit Sethi, willteachoberich or DM me on Instagram. Amit, tell me what you took away from tonight. I want to hear from you because I'm going to be here tomorrow night and every night as long as we're here during coronavirus talking about money, business, careers and psychology. Thanks for joining me tonight. I.