Have I told you lately how much I love this DPH industry? I loved starting and owning my own business. I loved helping start the original DPH group (part of NKBA in the mid -1980s) and working with the current organization as it has evolved. I have loved the opportunity of sharing knowledge and experience via my consulting business and writing a couple of business management books and articles for several trade magazines. But most of all, I have loved the relationships that I’ve had with the wonderful folks in this great industry.
As Carol and I are hunkered down in the Palm Springs, CA area, I can’t help but feel the anxiety and concern that today’s DPHA business owners and managers must be feeling. We went through several down turns in business in the 80’s and 90’s, but nothing like we’re seeing today!
I want to share some thoughts on what you might do to survive this crisis – businesswise.
First and foremost I hope you have been generating good, accurate financial statements (profit and loss statements and balance sheets) on a regular monthly basis. I hope your business is profitable and that you had some cash in the bank prior to being shut down as a “non-essential” business. Our DPH industry is one of the lucky ones, as many of our businesses are considered essential, and I have heard that many showroom teams are very busy on the phone and email while working remotely.
Study these financial reports very carefully. Make decisions on where you can cut expenses while revenues have slowed significantly. Your biggest expense item is most likely your people (owners included). As hard as it is - this is where you will have to make/take the first and probably the biggest cuts (keeping in mind the requirements of the government programs). Don’t wait, hoping things will turn around quickly. It’s going to be a long, slow recovery when this whole virus situation does go away (and it will)! Look at any and all other areas that you might be able to make cuts. If you lease your property - get in touch with your landlord NOW- and ask for relief. Negotiate new terms that will work for both of you. Can you/should you cut back on marketing and/or advertising expenses? Stay on top of your receivables. Don’t wait to collect the money owed to you, because your customers are probably going through the same hard time!
Touch base with your bank. Take advantage of the government programs that have been developed to help small businesses. Be patient! Neither the government nor the banks were prepared for this. Check out DPHA’s webinar explaining several of these programs.
My experience tells me that owners are, by nature, very optimistic. They believe things won’t get worse and that the current hard time won’t last very long. Consequently they wait too long to take drastic actions. They wait too long to respond to what is happening... sometimes too long to save their businesses.
When we went through a couple of difficult financial times, Carol and I (the owners of the business) took the first big cuts in salary. We then told our employees that we had to make more cuts in people costs. We told them that we would either have to let a few people go or we could implement 20% cuts on everyone across the board. They opted to take cuts themselves and to not let any people go. This worked for us - but then we never had the government shutdown our business as being “non-essential”.
I hate that our industry is going through this. If you have any questions or concerns – give me a call at 916.832.4891 or send me an email. All advice would be no charge. God bless you. Keep the faith – this too shall pass.