The Coronavirus pandemic is an unprecedented situation; all over the world, hundreds of thousands of people are infected, tens of thousands are dying, hundreds of businesses are closing down and thousands of people are finding themselves without a job. We are all experiencing something we never thought we would. We’re witnessing history.
The situation is difficult for everyone. Here at Get Hitched / Evently, our motto has always been “our team is our business and our business is our team”. Our team is made up of 14 talented and hardworking individuals. Each one of these individuals has a family and commitments. It is therefore of the utmost importance that we protect our business; not just to protect these individuals’ lives but also to protect the company. Without the company, there are no employees and without employees, there is no business. This puts many individuals, and their families, at risk.
If you are like us, the COVID-19 pandemic has literally brought business to a grinding halt; all sales have literally stopped and a company without sales is like a body without oxygen – it dies. We are writing this article to share our experience on how we are dealing with this situation, with the hope that it 1) reassures you, as a business owner, that you are not alone in these challenging times and 2) serves as some insight and help on how to tackle problems systematically and pragmatically, to safeguard your business which will help you come out of this soul crushing time, stronger.
Forecast & budget
The first thing we did as soon as the COVID-19 situation hit was look at our monthly budget sheet to determine what our runway looked like with our current revenue & cost forecast. A runway is basically the amount of weeks/months/years the company can afford to continue operating without any, or very minimal revenue coming in, with the current costs.
Our budget sheet is a simple Google Sheet document where we input all revenues and costs based on each cost centre (Salaries, Rent, Marketing, Development etc). We encourage everyone to have an up-to-date budget sheet to get a true and holistic picture of the financial health of the company.
This exercise allowed us to determine the life-line of the company, and take necessary, albeit hard decisions as explained further below.
Stop all extra costs & reduce waste
Through the budget sheet & financial forecast, we could easily identify areas where we could take immediate action to save costs. We cut back or completely stopped certain unnecessary costs such as certain advertising campaigns which would not yield any revenue due to the current situation. As an example: it’s pointless to advertise Team Building activities if the government banned all group gatherings.
Moreover, we cancelled our water & groceries delivery as these would have gone to waste since all employees are working from home. We also switched off all electricity appliances, including the fridge. Sounds drastic, I know, but every Euro counts and it’s crucial to be lean, especially in these circumstances.
Are there any similar costs you can reduce, or completely cut out?
Apply for government relief packages
The government has announced a series of relief packages including Wage Supplements, Deferral of Taxes, Quarantine Leave, Social Measures and more. You can find more information on these initiatives here: https://covid19.maltaenterprise.com/covid19-initiatives/
Negotiate better rent conditions
We called our landlord and explained the situation and asked for a reduced rate in our monthly rent bill and better conditions in our payment terms. We usually pay an amount upfront for our utility bills & also pay 3 months in advance.
Our landlord was gentlemanly enough to reduce our monthly bill by 20%, cancel the utility bill payment and also allowed us to pay month by month. This alone is a significant relief on our cash flow and we encourage you to negotiate a better deal for your company.
Collect as much money as possible, fast
Whilst new sales might have come to a complete stop, there might still be outstanding payments which you still need to collect; perhaps some clients haven’t paid their invoices in full, or are on a part-payment scheme. Whilst it’s understandable that these clients have their own business issues to deal with, it might be worth reaching out to them to try collect as many payments as possible. It’s important to be sensitive and empathetic with these clients – after all, you don’t want to burn any bridges. However, simply communicating can lead to new options; perhaps you can offer a discount to lower the fee, or spread out the payments over a longer period of time. Anything you can do to increase cash flow at this time is critical. Remember, every Euro counts.
Negotiate better creditor deals
Currently, we do not have any commercial loans and we pay our creditors on time so luckily there aren’t any large operating expenses that need to be paid. However, we understand that many businesses do have loans and other credit facilities so it would help to communicate with these suppliers & service providers to negotiate better payment terms, or at the very least, defer payments.
We are exploring different financing options; one of which is a commercial bank loan. The Maltese government recently announced government-backed commercial loans at low interest rates. We are soon meeting with our Banking Manager to explore all options as a low interest bank loan will give us cashflow peace of mind & allow us to retain our employees which are crucial to the success of our business.
Reduce salaries
Nothing we have achieved so far would have been possible without our hardworking employees so we are doing everything in our power to retain them; not only to safeguard the business but to safeguard their well being also. However with sales coming to a grinding halt, we were left with no choice but to reduce our Full Time employees’ working hours by 25% and even had some employees approach us offering to work part-time. Directors also took a 25% pay cut whilst still working full time hours. Whilst this was a very hard decision to take, like with most service oriented businesses out there, salaries are the biggest cost centre of the company. Therefore, reducing these hours relieved more stress on cash flow.
Use teleworking & collaboration tools
Although we operate in the Events space (weddings on Get Hitched, corporate & personal events on Evently), 2 of our competencies are Tech & Marketing. From the very onset of our business, we invested in time and resources to establish solid foundations for teleworking & collaboration in the Cloud. We run our business through Slack (a messaging & collaboration platform), Google Hangouts (Online meetings), Gsuite (for email and Google Drive for online documents and spreadsheets), HubSpot (where we log all customer interactions), 3CX (our IP telephony for internal & external calls), Xero (for all accounting related activities) and Trello (for Project Management).
These tools allow the entire company (from Office Admin to CEO) to collaborate efficiently and effectively day-in-day-out. If you don’t already, we strongly encourage you to capitalise on these tools as they will help you navigate through this storm. If you need any help setting stuff up, or have any questions, we’re here to help!
Check in with users & clients and remain relevant
Safeguarding your business in financial terms is crucial but it’s important not to forget that your users and customers are also a crucial part of your business. After all, a business without users and customers, isn’t a business.
We took this “quiet” time as an opportunity to check in with all our customers – we spoke to over 700 suppliers. Simply telling them that they are not alone during these hard times and that we are here for them went a long way. We also checked in with users to ask about their experience on our platforms. Our users & suppliers really appreciated us checking in and we encourage you to do the same.
It’s also important for your business to remain relevant – it’s important for your users & customers to know that you are still there. You haven’t gone anywhere, you are just navigating through the storm. Touch base with your audience; send them a message, call them, write an article that might help them (if you’re still reading this article, then we hope this will be helpful to you!) or send them something funny that will make them smile 🙂
Create new products & revenue streams
Nobody really knows when the whole coronavirus pandemic nightmare will be over. It can be weeks, months or years – who knows? Regardless of the length, if you cannot sell your product or service until life is back to normal, it means that no revenue will come into your business unless you start selling new products or services.
At Get Hitched / Evently we’re always thinking “What next?” Once COVID-19 hit our shores, we started working on a 3rd platform which we believe will be a game changer for the restaurant industry. Sure, restaurants are closed at the moment but we are working around the clock building the platform & onboarding restaurants so will be ready to hit the market hard once the restaurant ban is lifted. We’re also discussing other products we could bring to the market.
Are there any new revenue streams that you can create?
Stick together, help those in need & give back to the community
COVID-19 has, and will continue to teach us lessons, not just as business professionals but also as human beings. At the very least, we learned that we cannot take anything for granted. We learned how crucial good health is to the entire human population and without good health, we really have nothing. We learned the importance of friends, family and colleagues. We learned that we are all in this together, we are one big chain. Let’s use this experience to reflect and help those in need and give back; whether it’s an elderly family member, a spouse, child or colleague.
well done!