“While the masses hoard toilet paper, innovators install bidets.” That has been my mantra this week. My poor wife, who is sequestered here at home with me, has heard that refrain at least a hundred times over the past seven days. I just feel the message is so important that I can’t help but repeat it on every call and in every virtual meeting.
Innovators think differently. They see and face the same challenges but respond in a way that most don’t. As entrepreneurs, that is what you must do, follow the path less worn.
Every day I am seeing creative ideas from how work is getting done to the way brands are now reaching their consumers. I find it very inspiring. There is opportunity amidst the chaos, and our job is to find and capture it.
However, I don’t want to just write rah, rah stuff. I want to be honest. Our industry’s early-stage brands are the most vulnerable. There will be some that don’t make it through this period.
The Natural Products industry has responded. The amount of support that has been offered to early-stage entrepreneurs is incredible. Buyers and investors are making time for virtual meetings, people are sharing resources, and virtual communities are being established.
But that response alone is not enough. As a founder of an early-stage brand, you need to take steps today to ensure you are here tomorrow. You mustn’t chase after the toilet paper. Here are a few steps that you can take:
Focus on capital-efficient revenue sources.
Accept that your rate of growth may slow. Don’t chase revenue just to maintain your topline. Limit free fills, trade spend, and more. E-commerce, B2B direct, even self-distribution may be options to be considered.
Sure, the stock market is down significantly. Yes, many people are going to be more risk averse. The reason the market is down is that stocks have been sold, meaning there is more cash on hand. Terms may be less favorable, and you might need to consider new options such as equity crowdfunding, debt, etc. The critical point is that you must keep moving forward. Be an innovator, look for new solutions and instruments.
Don’t stop selling or marketing.
Don’t stop your outreach. Just lead with empathy. It is easy to dismiss that any sales or marketing activity is time wasted. Your customers and consumers are overwhelmed or worried about more important things. Acknowledge that fact in your communication. Let them know you care. Nurture them, maintain top-of-mind awareness. It will put you at the front of the line when we emerge from this current madness.
Establish a discipline around cash flow.
This may be the most important of all. I would encourage you to build a weekly or even daily cash flow model. Plug-in your expected in-flows, and out-flows then true up your actual results each week/day. Your rigor or lack thereof around cash management will be the single most significant determinant of your survival. Every decision that you make should be made with an understanding of its impact on …read more
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