The Impact of COVID-19 on Small Business Owners
Episode 1000: The Impact of COVID-19 on Small Business Owners, with Stephen Woessner
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The impact of COVID-19 on small business owners — Discover how COVID-19 has reshaped strategies and the impact of COVID-19 on small business owners.
For this solocast…we’re going to take a step back. I’m going to walk you through a small slice of the data from 12-months ago on the impact of COVID-19 on small business owners for a couple of reasons.
One — I want you to see how far you have come…how you moved along that path…to reflect on the decisions you made…and the result outcomes. And yes — nothing is ever perfect…but you’re still here. And there’s victory in that.
Two — we’re going to celebrate a few businesses and their owners who really crushed it. And I don’t mean necessarily from a revenue perspective…but I mean from the perspective of being the beacon of hope when we needed them to be.
Being there every time their clients or customers had a question — and oftentimes a difficult one — there they were — being helpful.
Let’s celebrate that because in good times — or in bad, like a global pandemic — it’s a great recipe for us to follow.
And three — as we see the economy recovering — and we see momentum beginning to come back — what are some things you could be doing right now to fill your sales pipeline with right-fit prospects?
I’ll share some insights that you can take and apply.
So you see? Now’s the time to double down.
What you’ll learn in this episode is about the impact of COVID-19 on small business owners:
- Drew McLellan and I mapped out a complete blueprint for how to do this — and how to do it well — in our book, “Sell with Authority.”
- Stephen discussed that “Focusing solely on cost” — cutting causes executives and employees to approach every decision through a loss—minimizing lens and pessimism permeates the organization
- How COVID-19 has reshaped strategies and the impact of COVID-19 on small business owners.
Additional Resources:
- Learn how to prevent the impact of COVID-19 on small business owners, and you can find Stephen here
- Free Executive Leadership Summary report from Predictive ROI: https://predictiveroi.com/research
- Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
- Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
- Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/
- Explore the strategies to prepare for the impact of COVID-19 on small business owners by tuning in to this episode: How to lead through challenging times, with Brett Gilliland
The Impact of COVID-19 on Small Business Owners: Full Episode Transcript
Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.
Good Morning, Onward Nation. I’m Stephen Woessner, CEO of Predictive ROI and your host. Welcome back in today’s episode is going to be a solo cast. It will be just you and me exploring a topic with some real depth. If you’re new to Onward Nation, I tend to record a solocast — let’s call it every five to six weeks to share some insights, perhaps some research or examples I gathered from hanging out with in talking with agency owners, business coaches and strategic consultants, just like you. Or sometimes I’ll pull some data points and results from the most recent experiments that we’ve been running inside the predictive ROI Lab.
That’s what we’d like to call it so that you can take and apply the new strategies or tactics and be able to use them to fill your sales pipeline with right-fit prospects. Okay. So, let’s shift our attention to today’s topic. I titled this episode Now Is The Time to Double Down for several specific reasons. Almost exactly to the day one year ago, I shared with you a distillation of over 400 pages of research around how business owners marketed their way through a recession crisis, like what we were facing back in March of 2020.
And I know nothing we’ve ever faced before is exactly like what we’ve experienced over the last 12 months are totally get it. But we’ve all experienced big challenges and crises in the past. And candidly, we’re still right now in April 2021, but the data I shared with you then.
Wasn’t focused on the survival of business owners just through the last recession, but actually through the last six recessions huge data set. So if you listened to episode 933 and there’s a link in today’s show notes to that episode to make it super simple defined. If you hadn’t listened to it, you and I would have walked through all of that data and more specifically how the owner’s doubled down and made Progressive decisions so that they could navigate their business through the choppy waters and be in the exact right position to come roaring out the other side of their respective Recession. Well, the last 13 months have certainly taught us many lessons about navigating ourselves through a crisis, painful lessons personally, and of course painful lessons inside our businesses.
We’ve learned what it feels like to hurt and to hurt in a really big way to hurt his family, to hurt his friends, to hurt his coworkers and teammates to hurt as a country, to just hurt and to not feel like there was anywhere to turn. We also learned what it means to truly have grit, what it means to be compassionate and to take a stand for what we know is right. We learn what it feels like when we can’t hug a loved one when they need it the most, what it means to look into the eyes of your team, and your teammates, and tell them everything’s going to be okay.
The Impact of COVID-19 on Small Business Owners: Reflecting on 2020 and Moving Forward with Purpose
The impact of COVID-19 on small business owners: When you know, behind the curtain, you’re struggling to keep your own head above water. In 2020, we learned so many valuable lessons in my hope is that through all of that mess in chaos, that the year was in the challenges that still linger today, that you’ve also seen some silver linings that you took the most overused word of 2020. I don’t know if this is actually true or not. It sure feels like it, though, which is that word is most likely pivot in the EU. Put pivoting to good use all joking aside that you took some time to reinvent that you asked your clients, your prospects, and audience, how you could be even more helpful and you stepped up and you showed your teammates.
What leadership is truly all about is that you jumped into the trenches that you worked back to back, you dug, you slung in, that you moved the same mud as your team and you were open to that you were honest, and that you let them see you cry when you needed to cry. But we all have those moments. You didn’t, and you don’t have to be the one who has all of the answers. It’s okay because you’re human. So for this solocast were going to take a step back. I’m going to walk you through a small slice of the data from 12 months ago for a couple of reasons.
Well, actually I think there are three, one. I want you to see how far you’ve come and how you moved along that path to reflect on the decisions you made and the result outcomes. And yes, I don’t think is perfect, but you’re still here. And there was a victory in that Onward Nation. There’s a huge victory in that too, where we’re going to celebrate a few businesses and their owners who really crushed it. And I don’t mean necessarily from a revenue perspective, but I mean, from the perspective of being the beacon of hope, when we needed them to be there every time there were clients or customers who had a question and oftentimes it really difficult one, they were there being helpful.
So I’m going to shine a bright light on a few of those examples because let’s celebrate that because in good times or in bad times, like a global pandemic, this is a great recipe for all of us to follow up in three. As we see the economy recovering and praise God that it is, and we see momentum beginning to come back and we’re starting to see the light at the end of the tunnel. What are some of the things that you could be doing right now to fill your sales pipeline with right-fit prospects? All share some insights that you can take and apply out of this solo cast. And because I want to try and make this as practical and tactical as always.
The impact of COVID-19 on small business owners – So if you see, now is the time; this is the time to double down. Now is the time to push even harder. Now’s the time to say to your team, we’re going to plant our flag of Authority in this niche. We have been dancing around this decision for X period of time. We’re going to stop doing that. We are going to plant our flag of authority in this niche so that during the next crisis, and you know, there’s going to be one. Hopefully, it’s not like this one, but we will have even further future-proof our business because of the decisions that were going to make right now. Now is the time to double down because I have one more thing to share with you before we dive in and it’s a really big, a super awesome and very sincere.
The Impact of COVID-19 on Small Business Owners: Gratitude and Doubling Down
Thank you. If I could give you a big hug, Onward Nation, like right now, I totally would because today’s episode is number 1000 of Onward Nation, and that doesn’t happen by accident as I was thinking through this. Thank you I have in what I wanted to say, it wasn’t like getting an, super emotional, but now that I’m trying to record this for you, I am so Episode 1000 a year, it’s happening. It has happened ’cause you. And all of our subscribers around the world have shared feedback with us. You’ve asked great questions. You have cared enough to point out ways that we could be even better.
And you share it in our episodes with your colleagues, family, friends, and teammates, for all of that. Thank you. It has been my honor to sit in this seat for the last six years and to have the opportunity to share the insights and wisdom from our guests with you. There’s also a very long list of family: teammate mentors, friends. And of course, our guests are super amazing, awesome rockstars.
Generous guests who have made these 1000 episodes possible. They were there in the beginning of the family. Teammate’s mentors, friends. They prodded me along the way. And so, sometimes it took some significant prodding. They encouraged me when I was down, and there were certainly those moments too. And they held me accountable. Holy bananas. They held me accountable to get done.
What I promised to do, needless to say, is that I have a lot of phone calls and a lot of thank you cards that need to be written, by the way.
Because John Wooden, arguably the greatest basketball college basketball coach who will ever live, what he said was so true. You will never outperform your inner circle. And I feel so very fortunate and blessed to be surrounded by rock stars like you Onward Nation.
So sincerely, thank you very much for the last six years. Thank you for 1000 episodes. Okay. All right. So, let’s dive into this solo cast. So I built a solar caste to act as a beacon around why, in my opinion, now is the time to double down or are you detecting the theme? Now’s the time to double down. So what can we do to rebuild if we work really hard at it? Could it be possible to come out of this recession in an even better position than when we went in?
The Impact of COVID-19 on Small Business Owners: Insights from Harvard Business Review
I will continue to argue that the answer to that question is yes, it is possible. And that’s what really drove me to do the research, to look back through the past recessions, the past recoveries to study the winner study the loser, and to share with you what they did.
So we can take some of those lessons out of their playbooks and put them to work right now. I’m going to give you the data points and examples to show you it is indeed possible. And I’m going to share the next steps that you and your team can take to make it happen as well as some free resources to they’re going to be linked in the show notes to make it super easy to do to get those in all of the research citations. I should mention this before we dive too deep into all of the research side data citations; excuse me, that I quote it can be found at the end of the notes section of today’s show notes on predictiveroi.com.
So scroll to the bottom and all of that as there, because I want to make sure that you and your team that not only could feel confident that this was not marketing hyperbole, but if you wanted to review some of the research sources, you, you would be able to do that. So all of that stuff is linked. All right? So with all of that said, let’s start stepping through why, in my opinion, now’s the time to double down, let’s start off by reviewing three research studies and articles published in the Harvard Business Review. Again, all are linked within today. S show notes. The first article is entitled Preparing Your Business for a Post-to-Pandemic World, which was published by HBR or Harvard Business Review on April 10th, 2020.
It was written by Carsten Lund Pederson and Thomas Ritter, both our professors at the Copenhagen Business School in Denmark. So I pulled a golden nugget out of Pedersen in the reader’s work because of their emphasis on planning before and during a crisis. And how, if you are planning process was sound Onward Nation. You could come roaring out of the other side of the recession and at the same time, future-proof your business. So you’ll be even more prepared for the next, the next crisis. There will be another crisis at some point, hopefully not like we just came through over the last 13 months, but there will be something that negatively affects your business going forward.
What is the impact of COVID-19 on small business owners? So let’s be prepared, but in order to prepare, the proper response plan with smart strategic decisions, you must first understand the position and your business holes in the market. So you can do that by asking yourself candidly, asking yourself, as well as your team. Some very fundamental questions like, Hey, who are we in the market? Like, what’s our mission purpose? What are our values? What role do we play in the market? Are we price-sensitive? Are we market leaders? Meaning are we premium priced due to our clients and prospects seeing us as thought leaders like, do we have planted our flag authority in this niche in what if we double down to make immediate course corrections?
The Impact of COVID-19 on Small Business Owners: Mapping Your Path to Success
Could we emerge as a market leader fueled by developments? Or, maybe there are new ideas. Service offerings may be, we were going to invest in new markets while the recession is still here so that we come roaring out the other side, all of that is possible, but it starts with asking ourselves and having the candid conversations around those types of questions, Onward Nation, the right plan should not just map out the wear that you wanna go, but also the how you need to map out your action, steps and milestones for today, next quarter and the remainder of the year. Why? Well, it has been my experience that, well, first of all, the why really is because nobody else does it a very, very small percentage of business owners will actually do that because this is where business owners get snagged in the planning process.
So I just came back from several days in Chicago, attending a live in-person workshop, which was amazing. First of all, a quick door, can I just say Holy frickin bananas? It was so awesome to be live in, in person with other business owners to be able to sit there, to listen, to share ideas, to share a meal. I mean, Oh my word, it was amazing. Amazing. All right. Well, one of the exercises during the workshop was the one-year business plan and all it took was a quick show of hands of who around the room. I actually had a one-page business plan or really candidly, any length of a written business plan. And I will tell you only a few hands were raised.
Why? Because oftentimes we as business owners, create these lofty ideas without any of the tactical detail that our teams need, that our teams need to be able to feel like they can challenge through that process, make it better. And then at the back end of that, be able to implement those or worse yet. There was no plan at all. Why? Because we’ve relied on winging it ever since we’ve owned the business. Well, winging it might work during good economic times. But what we learned in 2020 was that winging, it falls super short during a crisis the former heavyweight champion of the world said, Mike Tyson famously said, everyone has a plan until they get punched in the face.
Well, you are a high-level, half-baked plan that you think is a plan. It quickly falls apart without the right operationalized strategy. That is exactly why when the us Navy seals, when they create a mission plan, they build out third team contingencies for each mission. They execute 13 contingencies, Onward Nation. Why? Because the Seals anticipate and expect that there will be an ebb and flow to the mission plan. As the situation evolves and changes with new data points, variables that happen to be difficult to predict may be impossible when they experience sudden changes.
The Impact of COVID-19 on Small Business Owners: Navigating Change with Confidence
They never ever, ever expect to not encounter changes to the plan. But if they didn’t have a plan, if they didn’t have 13 contingencies to the plan, they wouldn’t know what gear to take, how much gear to take, and what transportation they would need. Where’s the extraction going to be in the litany of other logistical and resource decisions that they would have to make? They, wouldn’t even know what to consider. So the mission of the Seals mission, as well as the mission of your business, it doesn’t change, but how you accomplish it will most likely change. It needs to ebb and flow along the way in 2020.
Sure. Taught us that in our truckload way. And yet I know many business owners who are bristle like physically and emotionally bristle at the thought of planning because they don’t want to feel quote unquote boxed in, or they don’t want to feel a constraint on their flexibility. Well, you know what the Seals would tell you that it is because of how they doubled down on their planning process, that they can make it more flexible. They can become more flexible on the battlefield where it really matters most is because of their planning and because they’ve already anticipated and thought through their options and they have everything they need, like all of the resources, all of the gear, or all the plans, all of them, everything, the communication devices, everything, they have, everything they need to be able to quickly proceed with the new direction.
Okay. We are going to go down on contingency number two or three or seven or nine or whatever, but they already have everything they need. Your business can be just as nimble with the right planning. Yes. COVID has been confusing. Yes, it has. Absolutely. Without a doubt has been stressful. It has been awful there have been times when working with my leadership team at Predictive or the last 12 months when I felt overwhelmed in just wanting to start doing things, to see if anything would stick, but we didn’t. We didn’t because we were resisted that temptation, which was super hard for me. We didn’t until we got it planned.
So as we start to see at the end of this tunnel that we’ve been in praise God, again, we’re starting to see that I am pushing you to take a step back, to have the discipline, to look around, to ask yourself and your team questions. Look at it today, look at this week, look at it this month, and map it out in writing, not you taking the afternoon and to sketch it out in your journal and make it a couple of illustrations. And then you feel like that was your three-and-a-half-hour planning process. I know that you need to map out in writing the steps that you intend to take quickly for both the short term and identify how those steps will set your business up for success over the next 12 months, as it relates to your three-year mission.
The Impact of COVID-19 on Small Business Owners: Communicating and Implementing Your Plan
Now, another lesson about planning. The plan is no good unless you’ve shared it unless you have taught from it, unless you marinated your team in it and then repeated the process over and over and over again, you need to communicate the details of the plan, as well as the process to you, that you used to create the plan. And you need to share that with your entire team if you or your leadership team works through the planning process in a vacuum, and you don’t share the highlights, the milestones, or the progress as the plan is evolving. And I’m telling you, your team is going to feel lost. They won’t know how to implement it. You will have lost your opportunity to create buy-in and overall of your culture will suffer to your team.
Listen, your team was just as confused, just as scared in this concern as you were, when COVID first hit. And now many of them, if not, all of them are looking forward to the possibilities of the weight, you and your business. On the other side of this thing, awesome in building a plan will help them see not only those possibilities, but you will be able to clearly articulate how they fit into your vision of getting to the other side of this. And they will know how then they can be helpful in making it a reality. But to be clear, I’m not suggesting that your entire team needs to be involved in the creation of the Corps plan.
What I am suggesting is that you take a lesson out of the book, Extreme Ownership, a great book. I think I’ve read it or written it. I think I have read it five times. Extreme Ownership was so a great lesson out of that book is where you and your leadership team, create the core plan. And then you brief your entire team on the objectives, in the intent of the core plan. Then, you ask members of your team to meet and work out the tactical details for implementing that plan. Your job is to make sure you’re clear on the objectives and the intent of the plan. Then set your expectations for the timing of the completion of the plan and do that quickly.
The Impact of COVID-19 on Small Business Owners: Navigating Uncertainty with Creativity
And so this is not a six to six week or a 90-day thing. This is 24 to 48 hours. And have each of the team members present their portion of the plan back to you and your leadership team. And then everybody asks you questions and in doing so, you kind of stress test. The overall plan is crucial to create space for the plan to evolve, but that doesn’t mean that your planning process needs to take weeks. It could be days, and then you’ll be off and running. I assure you your greatest challenge during this planning process will be to prioritize.
You need to be careful that you don’t start numerous projects that all depend on the same critical resources because if you do, you will burn out your team, and nothing will get done with excellence instead, take you’re five, six, or 10 great ideas and apply some serious pressure to them, like run them through the crucible and distill them down to one or two great ideas with clear steps for the next 30 days. And then keep a list of all of the other ideas and come back to it in 30 days and reevaluate what ought to be next. And if you go to today’s show notes, but you’ll be able to download a super helpful calendar from our good friends at Elite Entrepreneurs.
I think of it as sort of like this visual cadence. It really maps out in full transparency, all of the different meetings that you should be having the planning process in full illustration that you should be having with your team throughout the year, so that you can communicate the details of your plan and how your plan is changing, not the mission, but how you’re getting to the mission is changing with the ebbs and flows as a business is moving forward. Okay. All right. So, first piece, now let’s shift our attention to the word Imagination because we need it now more than ever. So Martin Reeves. So this is now going to be the second peace out of HBR or a Harvard Business Review.
So Martin Reeves and Jack Fuller, both part of the Boston Consulting Group Henderson Institute, wrote a brilliant article entitled. We need Imagination now more than ever, which was published by the Harvard Business Review on April 10th of 2020, a link to the full text of the article again is going to be found in the endnotes section of today—his show notes. So Reeves and Fuller put forth the argument that imagination in the face of uncertainty, economic recession, and the historical challenges that we are facing right now and have been for the last 12, 13 months is exactly what we need in order to solve the problem imagination, but as difficult to apply Imagination in all of its benefits, when we’re in full on crisis management mode.
The Impact of COVID-19 on Small Business Owners: Creating Opportunities in Times of Crisis
Why? Because when something unexpected and significant happens, our first instinct is to defend against it. Then we later moved, understood it, and then eventually managed whatever construct Crisis. So we can think of how to get back to the status quo. I mean, think about that in all of the conversations that we’ve had over the last 12, 13 months in how many times we said, Oh gosh, I can’t wait to get back to normal again. I can’t wait to get back to normal again. Right? Well, that’s a status quo, normal again, quote-unquote normal. Again, this is the status quo, The authors believe. I agree that your capacity to imagine, create, evolve, and pursue ideas is a crucial factor in sizing and creating new opportunities, sizing up those opportunities, and then creating them and finding new paths to growth.
But the challenge is, and my guess is too, when I impressed upon you about the importance of planning or the importance of planning just a few minutes ago, you may have said to yourself, Stephen, there’s no time for planning. I needed to double down and take action now. Well, the same thing with Imagination, Onward Nation, because of the pressure of COVID in everything else we have experienced over that last period of time, it will be one of the hardest things to keep alive in your business. It probably has been extremely hard to keep it alive in your business over the last 13 months, both now, and then also into the future. However, Imagination like rethinking how you can double down in what you deliver to be helpful to your clients and prospects is exactly what you need to do in order to come roaring out the other side of this Recession, for example, in recessions and downturns, 14% of companies outperform both historically and competitively because they invested in new growth areas.
Okay? So I’m going to give you the case study that everybody’s heard of before, and then we’ll kind of break it down. So Apple released its first iPod in 2001, the same year the US economy experienced a recession that contributed to a 33% drop in Apple’s total revenue. Still, Apple saw the iPod ads, excuse me, the I-pads ability to transform its product portfolios to the company increased R and D spending by double digits, which sparked an area of high growth for the company, but let shine a bright light on some non-Apple companies, because sometimes it super easy to discount what these types of case studies where you actually mean because most of us don’t have several hundred billion lying around that we can invest more in R and D.
The Impact of COVID-19 on Small Business Owners: Thriving in Challenging Times
Maybe you do, but I don’t. So that said, if you were to take a look inside the community as an Agency Management Institute Elite Entrepreneurs or smart real estate coach, and these are the communities that we actively participate in, you could find business owner after business owner who had their best year in history during 2020. Well, how’s that possible? I know many business owners who doubled sales, doubled their team size and significantly increased profit in the last 12 months. How on earth is that possible? Were they just lucky or are they in the right place at the right time with the right silver lining? It would be lovely of that.
We’re a simple kind of thing, but no, it wasn’t bad at all. They weren’t lucky. What they did was they reimagined the possibilities. They doubled down on being helpful. They ask their clients and prospects what they need. They shared their insights and wisdom by teaching generously, and they didn’t just focus on service delivery. They marketed, They created content. They stepped up in big ways to be a solution. They rolled out new offerings, retired old offerings, and made it even easier for them to do business with them. They reimagined every aspect of their business, Onward Nation, and you can’t do.
And there’s still time. If you can rally your team, create an imaginative plan that everyone buys into because they had a hand in building it. You will likely be way ahead of your competitors as we come roaring out of this recession right now, because of everything that has happened over the last year, you might be the only one serving your niche, who was actually thinking about how best to double down on being helpful. Maybe the rest of your industry might be thinking about the next promotional, push something, anything in order to get a few dollars in, to make the second quarter look promising, but I’m encouraging you to just tap the brakes for a second and imagine a completely different path, a path where you generously share your smarts, your insights on where you teach the best of what you have and how it aligns with the business issues and challenges that your clients or prospects and audience face in good times or in crisis.
The Impact of COVID-19 on Small Business Owners: Shifting from Reaction to Action
And you do all of this while everyone else is simply reacting. If you do that, you’ll be on a completely different level. Why? Because you allowed yourself the time to imagine the blue ocean of possibilities and you work your butt off to make it happen. Okay? So, let’s dial this in a little bit further. How do you do all of that? Let me help. By giving you a push from the authors, instead of asking yourself in your team, passive questions, like what’s going to happen to us during this recession, I’m encouraging you to flip the script by asking active, open questions.
Like how can we create new options or how can we double down and be even more helpful to our clients and prospects during this crisis? Like What could we teach? What research and strategic insights could we share? What online event, what webinars, what online forum could we host for our clients, prospects and audience that would share the best of what we’ve got to help them navigate what’s next? And yes, I agree with you. There are no easy solutions are silver bullets. Forget it. This is a ton of work, my Predictive team, and I have wrestled through many options. When we were building out our one-year strategic plan, we worked through everything that I’m recommending to you.
I have seen this in action, not just within Predictive, but in many business owners that I spend time with. So yes, it’s hard. Yes. The discipline. You need to force yourself to imagine the possibilities essentially. Yup. This is challenging to create a plan. Yeah. It takes a lot of time effort and discipline to see it through will no doubt be challenging, but all of this work I assure you will help you plant your flag of authority in the niche that you serve. And you will be of greater service to your clients, prospects, and audience. When you do this the right way, with the right generosity and your heart in the right place, you will attract an abundance of prospects who fit the right into your sales pipeline.
And that will give you the fuel you need in order to come roaring out the other side of this Recession. Okay. So the last nugget I want to share with you, it was an absolute game changer for me. I’ve been a student of mindset, attraction theory, and the power of the mastermind for years. I am a firm believer that what we focus on, we get more of persevering over negative thoughts, producing negative results. And I have seen the reverse of that happen, And when blended with a great plan, intentional execution in hard work, the details within the plan become reality, maybe not in, exactly the same shape or form or fashion that you thought, but the mission is accomplished, and the path might be a little bit different to still achieve the result of the outcome.
The Impact of COVID-19 on Small Business Owners: The Power of Imagination and Positivity
However, what I learned from this article that I’ve just shared with you from Reeves and Fuller, and one to share with you is how this next piece is how actually plays out in the world of statistics too. And so this was mind-blowing. That’s why I call it a game-changer. For example, when we lose hope and adopt a passive mindset, we cease to believe that we can meet our ideals and fix our problems. This is a quote right out of the research in statistics, and we call that basis and learning, which involves taking a belief about a statistical distribution of the prior research results, in other words. So like Essentially seeing how all of that data set is knitted together and then updating it in the light of each new piece of information to obtain.
So, if this is what the past results were, it is dictating where it’s going into the future. So essentially, The outcome of the entire process can be determined by the initial belief; therefore Onward Nation, in a very real way, pessimism can become a self-fulfilling prophecy. So, in the show notes again, I cite a section of the research from the article that I’ve just shared with you. You can do a deep dive into the justification for it too if you would like, so let’s go to the high level for a moment. If you focus on being imaginative, being open to the possibilities, giving your team grounds for hope, and encouraging them to be innovative.
All of this has been done with the intent of being helpful to your clients and prospects in a way that you’ve never done before, and you will make progress. Meanwhile, your competitors will be bogged down in a myriad of thin things and trapped in a short-term survival mentality that requires them to take from their clients and prospects. And guess what? It won’t work. There were many silver linings over the last 12 months. If we look hard enough, I will tell you that one of the biggest, in my opinion, is that we, as people, are even more attuned now to generosity, transparency, and truth it has become super easy to sniff out a fake.
The Impact of COVID-19 on Small Business Owners: Planning with Speed and Precision
So imagine yourself generously playing the long game and your clients and prospects will love you because they will see you are genuinely playing the game for their benefit. Trust me, when I say that the trench you are fighting in every day, that trench of pressure, doubt, fear, or anxiety, and at times overwhelming. Yep. I know that trench pretty well, too. I’m right there. Right here with you slugging it out to working hard. One thing I am extremely grateful for is that because of the last 12 months at Predictive, we sharpened our leadership and planning skills.
We were forced to quickly build a plan and my fellow leaders and I, well, we prioritized, we mapped out what we could be helpful, like where we could be helpful to our clients and prospects. And we did all that from the spirit of imagination and generosity. We shared all of that with our team then. So now taking you behind the curtain here in full transparency, we did all of that in about 48 hours. This, again, is not a four to six-week planning process. Don’t get bogged down; instead, get moving. Okay. All right. So, let’s keep up the momentum here of the planning process and begin to think about how you could deal with the myriad of business pressures right now.
Like do you continue to look at cuts to operating costs? Do you reduce staff? Do you work to open new markets and invest in R and D or some other combination of strategies? And is there an ideal combination or a blend of strategies? What has been the result of outcomes from other companies as they worked to navigate past crises? Well, Thankfully, there is some excellent research available on all of the above, and that’s where we’re going to go next. So it might seem a bit odd that I’m going to now turn our attention toward an article that was published, which is actually a study that was published in an article for them in the Harvard Business Review from back in 2010.
But just to hear me out for a second, why in the world did I pull an article that was 10 years old, right? Okay. So The article is entitled Roaring Out of Recession and was published in HBR on March 3, 2010. So, I’m encouraging you and your team to study it because the data points within the article provide a whole lot of context. That would be helpful to what you’re working on today. Back in 2010, of course, we were all looking for any and all help in pulling ourselves out of the great recession of 2018, and 2009, but in order to make smart recommendations to their 2010 readers, the authors went back and gathered data from the past three global recessions.
The Impact of COVID-19 on Small Business Owners: Lessons for Today’s Businesses
So it was the 1980 crisis, which lasted from 1980 to 1980 to the 1990 slowdown, which was from 1990 to 1991. Then, the 2000 bust 2000 from the year 2002, they studied 4,700 public companies, and they broke down the data into three periods, three periods before a recession, the three years after, and then the recession years themselves. It took the researchers over 12 months to complete the research, and they focused on publicly traded companies because of the availability and access to data.
So here are some of those strategic insights from the researcher. 17% of the companies in the study didn’t survive their respective Recession, about 80% of the 4,700 companies in this study. So 80% would be 3,760 companies had not yet regained their pre Recession growth rate for sales and profits three years after the recession, and 40% of the 4,700 companies, or 1,880 companies, hadn’t even returned to their pre-recession sales and profits levels, by the end of the three years post-recession. For the majority of the companies, the financial impact of the recession was long-lasting; only 9% of companies flourished after a slow-down and did better than they had before, outperforming their rivals in their industry.
9% Interestingly, companies that cut costs faster and deeper than their competitors did flourish. In fact, these were the companies in this study with the lowest probability 21% of pulling ahead of their competition when the economy rebounded. So, counterintuitively, the company leaders that decided to double down and boldly invest more than their rivals during a recession also did so in farewell because where they make investments really matters. So we’ll get to that in just a second. They only enjoyed a 26% chance of becoming leaders after a downturn and then into an economic rebound. The most surprising to me when I studied the research was learning that 85% of the growth leaders heading into a recession were toppled because of the PR because of the crisis, 85% Onward Nation.
The Impact of COVID-19 on Small Business Owners: Progressive vs. Prevention Companies
So, if you’re not currently the leader in your niche, then right now, it could be absolutely your perfect opportunity. If you lead your team correctly, plant your flag of authority, and become the expert that your client prospects and audience need you to be. The post-recession. Winners were companies that mastered the art of making progression decisions and then balancing cutting costs to survive in order to be more frugal and then investing in order to grow tomorrow. And the proof is in the results, with 37% of the post-recession winners breaking away from the pack. So, this is a quote from the research.
The post-recession winners were the companies that cut costs selectively by focusing on increasing operational efficiency. Meanwhile, they invested relatively comprehensively in the future by spending on marketing and R and D in new assets, quote: this is the best antidote to a recession and quote, and the researchers called a segment of companies that had taken this strategic approach. They called them Progressive. Okay. So, let’s define that a little bit further. Progressive companies deploy the optimal combination of defense and offense. Conversely, there’s another group of companies here that didn’t obviously perform very well, and they were labeled Prevention companies, and they’re the ones who are leaders who quickly implement a policy to reduce operating costs, shrink discretionary expenditures, eliminated frills, lowered headcount, and preserved cash.
Like trying to hoard as much cash as possible. They also postpone making new investments in R and D, developing new business lines, building assets, or excuse me, buying assets such as plants or machinery or whatever assets that they might need in order to expand their capacity prevention focused leaders cut back on almost every item of cost and investment and reduce expenditures significantly more than competitors. They focused solely on cost, which caused executives and employees to approach every decision to a loss, minimizing Lenz’s pessimism.
So when that happened, pessimism then permeated the organization. Prevention-focused companies did exactly what Brett Gilliland, CEO of Elite Entrepreneurs, warned us against back in episode 929, when he shared the lessons around, ah are the instinct of, we have heard this before. You know, when we have a sort of this innate, built-in reflex to danger, we’re either going to fight, or we’re going to flee. But then he took that deeper and said, actually, Stephen, the most harmful instinct to business owners is that they freeze and they do nothing Prevention, focused companies. Onward Nation suffered the most during the recession.
The Impact of COVID-19 on Small Business Owners:The Power of Progressive Decision-Making
The recession was in the study, and they took the longest to recover because they froze. And they would probably argue now that no, actually, we were fighting, but actually, they froze. They made easy decisions, but they did not double down and be progressive in the places that they needed to be progressive. So, they never recovered to pre-recession levels of sales and profits. So let’s flip that and think about it. Does that mean that doubling down on promotion is the right strategy right now? No, it’s actually not that simple. When companies in the study focused purely on promotion, like essentially having the mindset that we were going to advertise our way out of the crisis, we just shouted more often that our customers needed our stuff and bought our stuff.
It developed a culture of optimism that then led those companies to deny the gravity of the crisis for a long time, they ignored, it ignored the early warning signs, such as customers saying that were going to cut our budget. They ignored, the warning signs of the economy has got a couple of things, and we need to make some Progressive decisions. They ignored that. Instead, they were steadfast in believing that as long as they innovated there, sales and profits would continue to rise. And that wasn’t the case. They didn’t notice that because the PI was shrinking, they had to capture an even larger share from rivals to keep growing.
They didn’t realize that. That typically led them into price competition, which has a zero-sum game. Nobody Onward Nation wins the race to the bottom. However, the progressive companies, which is where I’m urging you to begin thinking of our nation, were the companies that cut costs by improving operational efficiency. Awesome. Rather than slashing the number of employees, only 23% of progressive companies cut staff, whereas 56% of prevention-focused companies absolutely did. That was one of the first places that they looked to save money.
Progressive companies made a whole bunch of offensive moves, which were even more comprehensive in their own set of decisions. So Progressive companies developed new business opportunities by making significantly greater investments than the rivals in R and D and in marketing. And they invested in expanding their capacity. Progressive companies developed new markets and invested in enlarging their asset bases. They took advantage of depressed prices, and they bought the property. They invested in real estate. They bought equipment, all of these types of things, by building up their balance sheet that they could invest in. They did that.
All of that combined is why the post-recession growth in sales and earnings by the progressive lead companies was among the best of the 4,700 within the study. Okay. So, let’s do a quick recap of what we’ve covered so far. First, based on the data, you need to have a plan that involves your entire team. You can not afford to wing it through any crisis, and definitely not this one second. Do you need to find ways to stay open to imagination and let it impact your outlook on how you approach doubling down on being helpful to your clients and prospects?
The Impact of COVID-19 on Small Business Owners: Thriving Through Recession with a Progressive Mindset
Third, if you want your business to make it through to the other side of this crisis and to come roaring out, the other side of this recession is now the time to be progressive. Yes. Reduce your operating expenses to boost efficiency. Sure. Keep your team intact the best you can and make investments in your marketing and R and D. So you can be even more helpful to your clients or prospects in your audience. So, let’s take the ROI around marketing investments a bit deeper with some data points collected from a study commissioned by the Advertising Specialty Institute or ASI. So ASI studied 2,662 Firms from 1970 to 1991 to determine the effect of marketing on a company during a recession.
So again, this is 21 years in this dataset, big data set. They found that firms that marketed during a recession increased in value and got more marketing bang for their investment, in some cases up to three years after the recession had ended. So it seems like common sense, right? If you Marked it when everyone else stopped marketing, then your message is more likely to be noticed due to a less cluttered market. And your business is more likely to be remembered once your competition becomes marketing again. Okay. So it really matters how you’re doing that super promotional super salesy.
No, it’s super helpful. Yes. Then we’ll get to that. And just a second, because now is the time for you not to be silent, you need to be in front of your clients or prospects and audience, and yes, that is marketing, but it’s not pitchy and salesy. And this is where context really matters. I’m encouraging you to focus on helping. So McLellan and I mapped out a complete blueprint. A complete blueprint is what I meant to say there for how to do this and how to do it well in our book entitled Sell with Authority. And if you want a free paperback copy, all you need to do is send me an email at [email protected].
So [email protected] and I will ship you a copy of No shipping fees, nothing. Just let me know, send me your email, send me an email, and send me your best mailing address. Let me know if you want a copy of it, and I will ship it to you. So, I want you to have a progressive mindset about how to lead your business to the other side of the recession. And I want you to be very thoughtful about the content and your team that you and your team create and share. So this is why we are also gonna talk through right now, some highlights from a special report from Edelman, because the context here is going to be super, super helpful in the context that you should be creating your content around.
The Impact of COVID-19 on Small Business Owners: Insights from Edelman’s COVID Study
So you can access the full copy of the report from the Edelman website. So if you just Google Edelman, we could also, or you could also use the link at the bottom of today’s show notes. So Edelman is a global communications firm that partners with businesses and organizations to help them protect their brand. And they employ about 6,000 people in more than 60 countries. And they have been studying and researching and reporting on the topic of trust for the last 20 years. Their report has literally become a standard for excellence on the topic of trust Onward Nation. So Edelman conducted a 12-market study on the critical role.
Brands are expected to play during and have played during COVID. So they interviewed 12,000 people in Brazil, Canada, China, France, Germany, India, Italy, Japan, South Africa, South Korea, the UK and the United States. I’m going to walk through a very, very high-level overview of just a handful of the key insights. I strongly encourage you to download the report and study it. It’s amazing, super insightful. So here are a few of the insights. 71% said it. If they perceive that as a business is putting profit over people, they will lose trust in that business forever 71% lose trust forever.
Holy bananas, 84% said they want advertising to focus on how brands have helped people cope with the pandemic and relate that to life challenges, 77%. So they want brands only to speak about products and services in ways that show that they’re aware of the crisis over the last 13 months in the impact that has had on people’s lives in the study showed that there is a deep desire for expertise. For example, 84% of respondents globally said that they want businesses to be a reliable news source and keep people informed. They want to receive this information from multiple sources in part because the audience is skeptical about any individual medium, given the proliferation
We’ve seen fake news, taking that further 85% of respondents. We want you to be an educator offering your audience instructional information. With that said, I’m certainly not suggesting that you try to play doctor or infectious disease expert. But what I am recommending is that you pick up the torch in that you lead conversations in your niche about the business impact COVID has had and is having on your customers, your vendors, your industry, as a whole, and that you continue to champion the distribution of resources research or anything else that you think might be helpful to your community of clients, prospects, your audience.
The Impact of COVID-19 on Small Business Owners: Building Trust through Expertise and Generosity
They are all seeking answers. So if you are on our email list, you likely receive updates from me when PPP first was a thing, and then the series of Resources, calculators, applications, tax stuff, all of that, as they became available, we made it available shortly thereafter. Our expertise is certainly not in the public health arena, but we absolutely believe that we could be helpful to business owners within our community by sharing resources that we’ve curated. You know, what the response from our community was awesome. It was incredible because we shared the right resources at the right time with absolutely no expectation of return, helping Onward Nation, Not selling. The team at Edelman believes that COVID-19 will fundamentally change in, has changed.
How do we think behave in consumer or business owners who act in the interest of their employees, their clients, their prospects and other stakeholders will absolutely reinforce their expertise, leadership, and trust? And they’ll be immeasurably stronger. Those bonds will be immeasurably stronger as a result of what they’re doing today. Your community is looking to you to share your thought leadership and expertise. And you can’t do that by shrinking or being quiet. They want you, the data says, so they want you to demonstrate your authority. They are not asking you to be promotional.
They’re asking you to be helpful. Don’t focus on selling, but be solutions-focused. Now’s the time to double down on sharing your expertise like you never have before I assure you that creating an authority position will deliver a financial return on your investment. Yes, it absolutely will, but it is about being helpful and being generous. OK. So let’s begin to wrap up and come in for a landing by circling back to some additional framing about what makes someone in authority. So thought leaders don’t write content that anyone else could claim, thought leaders don’t write about anything in everything, and thought leaders don’t compete on price.
And because of COVID in the data from Edelman that data from our own ROI of thought leadership study and will include a link to that study as well in today’s show notes. So you can download a free copy in all of these relevant sources. I will argue that now is the time to double down and plant your flag of authority. Churning out generic content to get ahead in Google rankings may, well, that might have worked like 20 years ago, but it doesn’t work today and is not helpful to your audience in our book, Sell with Authority, Drew and I shared some highlights from the 2019 Trust Barometer from Adelman.
The Impact of COVID-19 on Small Business Owners: Leveraging Expertise and Generosity in Marketing
And this is where again they had about 33,000 consumers participated across 27 countries in this particular study. And one of the biggest takeaways was that buyers assign a high level of trust. The people that they believe are just like themselves. When you think about the impact that ratings and reviews and influencers have with their audiences, you start to see the power of that belief, but Edelman’s research isn’t about the celebrity influencer. Nope. The study documents the rise of the common person, the common man, the common woman, and influencer business owners, just like you and me, Onward Nation. It’s noteworthy because it gives to the team validity to the idea of real people, is it for me?
Okay. And the impact that you can have on your community, the one attribute that ranked higher than the trust we have in people like you and me is the trust we have in highly educated experts. The only three groups of people we trust more than people like ourselves are company, industry and academic experts. Experts are afforded the highest level of confidence and trust because they have a depth of knowledge in a specific industry or niche. So why in the world, wouldn’t you capitalize on that instead of creating generic content that looks and sounds like everyone else during this crisis? Take the opportunity to create thought leadership content that is unique and different.
And that is helpful and not promotional A true authority has something specific to teach us, and they want to be helpful or illuminating. They’re eager to share what they know because they have a genuine passion for it. And they don’t fear giving away the recipe or giving away their secret sauce. Or at least it’s perceived that way, right? They have something that is secret, and they generously share it. That confidence in generosity is contagious. Their expertise as something specific to groups of people, which by the way, are their sweet spot prospects. These people are hungry to access that knowledge.
So, an expert called him a thought leader, calm and authority, or a sought after Pandit adviser or a specialist. It doesn’t matter. They are all words for the same thing. They trusted resource that has earned that trust by demonstrating in generously sharing the depth of their specialized knowledge over and over and over again, Drew. I would argue that true authorities have strong points of view or beliefs that influence how they talk about their subject area. They have a very narrow niche or a strong point of view and are, in the way of course, findable in multiple places. All of those are the hallmarks of an authority position.
They also have a plan for creating content that is helpful to their niche. And it’s never focused on selling all of the data points to the validity of leveraging your own thought leadership as your core strategy to proactively market your way through this recession. And to make it through to the other side in a stronger position than when all of this happened. You need a plan. You need some Imagination. You absolutely need some hard work. You need progressive ideas and the ability to make progressive decisions in the willingness to invest your time and attention toward execution.
But if you do that in your clients or prospects and the audience can see that you are being helpful when they’re ready to enter the market again might be right now. You will have put yourself in the best possible position to come roaring out the other side of this recession. And I can almost assure you Onward Nation, your competitors, aren’t doing this hard work, and that should be the most compelling reason why now’s the time to double down on the data is all on your side, Onward Nation. Ooh. Okay. Was that a lot of Holy bananas?
The Impact of COVID-19 on Small Business Owners: Last Bit of Advice and Connect with Stephen
I sure felt like a lot. Wow. Okay. So remember all of the research sources, it can be found in the end notes in today’s show notes on PredictiveROI.com as always. I look forward to your feedback, the emails you send me and your comments on social media, all of it helps us get better every single day. So thank you for all of that. All of our nation. Please keep a coming. Thank you for taking the time to listen to the solo cast and for making episode 1000, that much more special. I am extremely grateful. Thank you. And if you need me, you can reach me directly at [email protected].
That is my actual inbox, and I read and reply to every single email. So, okay. Onward Nation until our next episode.
Onward with Gusto, this episode is complete. So head over to OnwardNation.com for show notes and more foods to fuel your ambition. Continue to find your recipe for success here at Onward Nation.
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