IIn this content series, we aim to help marketers and agrimarketers alike find opportunity in these trying times, without looking overly opportunistic (no hoarding of hand sanitizer here). As such, we’ll look at some of the common challenges (the Lemons) we are all collectively facing and highlight potential solutions/opportunities (the Lemonade).
The Lemon: Your Income Statement is Being Beaten by COVID-19
The Lemonade: Invest in Building Your Balance Sheet
I’ll never forget a Great Recession story from one of our consulting clients in the Midwest USA. As a manufacturer of restaurant equipment, their business was hit hard by the economic downturn, and, like many, they were faced with the decision to cut staff in order to save costs and improve their Income Statement.
As an employee-driven culture, the CEO decided it was not in his nor his staff’s best interests to reduce headcount. Instead, he re-focused his workforce on retooling their production line, inspecting inventory and even cleaning and painting their workspace. Fast forward to 2010 and the end of the recession, and not only did he have a highly engaged workforce willing to go above and beyond for the company, but also a business that was running more efficiently and effectively than ever before.
And the best part of the story is that in late 2009, they were able to fulfill an order their competitor couldn’t because they didn’t have the skilled workforce in place to handle a highly technical rush order. One order led to another, which led to a long-term relationship with the world’s largest quick-service restaurant, McDonald's, and year-over-year growth that continues to this day.
As the coming weeks, and even months, are likely to hurt the vast majority of businesses, you will need to decide how to balance the short-term improvement of your Income Statement with the long-term strengthening of your Balance Sheet. And although businesses can only incur losses for so long, don’t discount the impact your actions can have on your culture, staff and business. Our aforementioned client would never be where they are today (with expanded operations in the U.S., France and China) if they didn’t focus on the unique opportunity the recession presented to improve their Balance Sheet.