Control your destiny, or it will control you

People everywhere are assuming right now that finding a vaccine to cope with Covid-19 will return everything to normal. Don’t count on it! If you don’t actively work to control your own destiny, your business could become one of the strongly predicted fatalities of the pandemic.

The projections for dry cleaning in Canada are dire. According to a report by research firm Ibis World, the industry in Canada (which shows a growth rate of negative 3.6% for the past 5 years) is expected to shrink considerably in the wake of the Covid situation. Mergers, acquisitions and closures will all be taking place.

Dry cleaning, wet cleaning and laundry are deemed ‘essential services’ and have been allowed to remain open. However, business that feed the plants with garments and hospitality textiles, as well as people not working in offices and other more formal settings, has crippled the industry across the globe. The impact on most industries has been catastrophic.

Look to the past to look ahead

Recoveries are fickle. Historical perspective provides some recovery timing indication. In 1957, a new strain of flu (not a coronavirus) struck North America with significant impact. Similar to Covid-19, world leaders and citizens took ill, financial markets plummeted, and the economy fell into recession. But the flu was fleeting, an effective vaccine was developed, and the recession lasted just three financial quarters. The stock market bounced back from a 20% decline in less than a year.

DIFFERENCE: The current pandemic is much more deadly and virulent than the flu, and the full economic impact is just beginning to be felt three quarters after the inception.

Another timing indication comes from the S&P 500 in the early 2000s, when the dot-com bubble burst and it took roughly seven years for the stock market to recover. After the Great Recession the S&P similarly took about six years to make up the losses, as reflected by the market charts.

DIFFERENCE: The charts don’t tell the whole story. With world governments pumping in trillions to shore up markets, what happens to the true underlying economic fundamentals when the stimulus infusion ends?

The differences cited above are just two variants on historical calamities that may influence the future of your company. So what can you do about it? History has consistently shown that, as in nature, nimble adapters will survive and thrive.

Covid winner example

The headline read, ‘Grocery Sales Increase by 38%’.

On March 11, 2020, the Canadian government announced its Covid-19 response fund, and then a coordinated economic relief package. By the end of the week, grocery sales had increased 38% compared to their average sales in 2019. The sales were 16% higher than those reported in the week leading up to the December holiday (the busiest shopping week of the year), and a whopping 46% higher than the same week in March the previous year.¹

What should you have done when you heard this phenomenal news? You had a couple of options:

1. Pivot fast and fill your vans to deliver groceries, bleach and toilet paper to fill your customers’ needs when the dry cleaning declined, or
2. Whine over lost sales and lament the demise of the industry.

I have heard lots of excuses about why the pivot solution was inadvisable, but those who took the advice now have thriving, busy ‘concierge services’ that do more than just fabricare for their customer base. Successful business owners make a habit of planning for the future and working that plan, and then continually refining it as conditions change. In the current environment, your business life literally depends on it.

Roll up your sleeves

Spend 10 minutes listing all of the ways you can think of in which the world has changed as a result of this calamity. (Yes, put pen to paper and really think about it. This is a critical moment in the future of your company.)

Next, list the predictable and possible impact of those changes on your business. Don’t sugar-coat it, be brutally honest about the outlook.

Fateful next step: design your strategic plan

Based on what you observe in the market today and the foreseeable future, you can create a recovery (and beyond) plan to incorporate and adjust for the new challenges resulting from this particular crisis, as well as for the ‘normal’ business challenges you continue to face.

This strategic plan may be the most important of your business career!

There are lots of tools to help you build a strategic plan, but regardless of your preferred system, the basic steps are the same:

STEP 1: ASSESS YOUR CURRENT STATUS to identify competitive advantages and deficiencies, opportunities to exploit, and threats to overcome. This is commonly accomplished with a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). Writing the distinct lists of each category is crucial to the eventual plan implementation, tracking and refinement.

Look deep and research what past, present and predicted trends influence the way you do business today to understand how your model must change in the future to keep your organization moving forward at the head of the pack.

Caution: As the coronavirus has brutally reminded us, relying on the past alone is unwise and can be dangerous. The same is true for future predictions, even if the projections reflect a consensus of experts.

As you list the opportunities and threats your company faces, consider the impact of the general economy, which is multi-faceted and differs dramatically by geographic location. Ponder the range from the micro-market around your specific service areas to the global factors that affect general consumer spending, as well as availability and pricing on equipment and supplies. In addition to Covid, examples that are beyond your control (but need to be factored into your plans) are changing neighbourhoods, changing habits, unemployment rates, quality of education, relocating corporations, displacement of employees, housing affordability, access to capital, commercial and retail rents, population density, traffic patterns and interruptions, etc.

More detailed analysis is required on economic sub-categories:

The Retail Consumer Sector

Current momentous acceleration in lifestyle changes, habit interference, reliance on trusted providers, need for safety, added responsibilities and time demands (e.g., home schooling), and compensating consumer shopping behaviours can work in your favour or against your business. How well you adapt is crucial to your survival.

The Commercial Sector

Working remotely, reduced employee and customer density, available delivery of everything and less access to activities (like weddings, parties, travel, gatherings of all kinds, even shopping) have become commonplace during the pandemic and, although engendering feelings of lack of freedom, new habits are being formed that may never be reversed.

Specific Fabricare Industry Trends

Competitor closings, retirements, frustration, service retreats and bankruptcies can be a boon to you as one of the survivors. There are many opportunities created by competitor decisions.

Your Micro Market Status and Potential

All of the considerations above and more must be applied to your business service area in relevant context to arrive at practical, realistic, profitable courses of action.

STEP 2: PUT YOUR NUMBER ONE GOAL FOR THE BUSINESS IN WRITING

What do you really want?

• A job
• A personal legacy
• Wealth
• Recognition
• A family support source
• Something else

As a business owner, the most common primary goal is to increase profitability, which ultimately adds value to the enterprise for you as the current owner and for potential future owners as well, whether or not an eventual sale or transfer is in your plan. Interim short-term tactics that require current investment may be vital to provide the structure for the strategic longer-term profitability impact you seek. Short, long and interim goals should all contribute to the ultimate primary objective.

STEP 3: SELECT THE THREE MOST CRITICAL GOALS TO ACHIEVE IN THE NEXT 12 MONTHS

In a ‘normal year’ these goals may reach out beyond 1 or 2 years, but for this unique year, we will concentrate on the more urgent needs. What must be done if your stated goal is to remain viable a year from now? There will no doubt be more than three things that need doing, but you can’t focus on more than a few at a time, so pick the most critical for immediate action. Not the easiest, or the least costly, but the most important.

STEP 4: FOCUS ON THE OPPORTUNITIES RELATIVE TO GOAL ACHIEVEMENT

Scrutinize all four sectors of your status analysis to dig for the nuggets that reveal the gold represented by market opportunities:

• Advantages
• Deficiencies
• Opportunities
• Threats

For example, the pandemic threat may provide an opportunity for you to provide ‘safety’ to your clientele. You may have the advantage of a fleet of delivery vehicles that can be utilized for different purposes. The threat of a successful competitor who is also struggling in these days may offer a unique opportunity to open the door to an outside-the-box partnership for the benefit of both. The fact that you are deficient in having a drive-thru option at your location(s) can be turned to a plus for gracious and safe curb-side service. You get the idea.

Weigh the opportunity pros and cons to determine which ones can provide the most progress toward your business goals. In analyzing each opportunity, ask yourself if it offers:

• Better customer experience
• Increased revenue
• Diversification of income streams
• Efficiency for you and/or customers
• Scaling opportunities for expansion
• Reduced labour cost or better expense control
• Flexibility for innovation

The more boxes you can check on that list, the better the opportunity for long-term success.

STEP 5: SELECT THREE OPPORTUNITIES THAT CONTRIBUTE MOST TO YOUR 12-MONTH GOALS

Not three opportunities for each goal, but one per goal. You don’t want to overwhelm yourself with ‘good intentions’ to the point that you are paralyzed by what you’ve taken on. Choose carefully. Many opportunities are enticing, but be realistic in assigning their potential benefits and costs of implementation. Do the math!

STEP 6: CREATE A DETAILED ACTION PLAN

Here is where the rubber meets the road. There is a special feeling of relief when big projects are broken down into manageable steps. Design a detailed action plan for each of the target opportunities identified in Step 5. Focus on the value of the opportunity and be specific in the details. It should include:

• the Measurable Goal (numbers are easily measured);
• the Detailed Action Plan, with each interim step listed and all of its elements clearly delineated;
• Who is Accountable and Responsible for the overall plan and who is responsible and accountable for each incremental step in the plan?
• When each step is to be completed;
• Periodic Review Points for Refinement based on what has been learned as the plan is implemented.

STEP 7: FORMAL REVIEW OF RESULTS AND A CRITIQUE TO REFINE THE PLAN

Record what worked, what did not and how the plan can be improved in the future. This is not a time to throw rocks or complain, it’s a time to learn in real time where you need to go next. It’s a positive step.

STEP 8: REPEAT YOUR STRATEGIC PLAN PROCESS AT LEAST ANNUALLY

When you complete your first plan, or the unique plan for this unprecedented time, it will be tempting to sit back and sigh with relief. And you should congratulate yourself in some pleasant way – order a steak, treat yourself to something for your hobby, pop a cork. But the plan is just paper until you put it to work. The process needs to be repeated obsessively for a long business life of prosperity.