Rainy Days

It’s always good to save for a rainy day. What if the rainy day becomes a monsoon? Will you and your business be able to handle a tidal wave? Events surrounding your business can be as unpredictable as the weather. Let’s take a look at what you can do to keep your business warm, safe and dry!

Suppose your rainy day comes in the form of a competitor opening up across the street. What should you do? First of all, the time to think about something like that is now – you will usually be pretty anxious when it happens – and that is never a good time to put together a tactical plan to compete. Let’s say you are a local gourmet coffee shop and a large national chain coffee shop opens a block away. Here are some ideas that come to mind.

Make sure your existing customers know the value of your products and services.  Accentuate and emphasize the “character” of your business versus a “big company” franchise. Try to attract some attention to your shop with a new banner or sign – that might suggest your uniqueness and differentiation from that corporate coffee seller. “Try our STORE ROASTED COFFEE, the only one in town.” This may draw some traffic from your newly found competitor.

Suppose your rainy day comes in the form of you contracting a life threatening illness. You may be out of commission for a week, month or even longer. Can your business survive?

Most businesses can survive if you have taken the right steps to have a backup plan. First of all, write down all the essential things you do to run the business: Payroll, ordering from suppliers, relationships with key customers, special deals from vendors, working with your banker and others. Make sure someone else in your organization can handle these tasks if you cannot.

I know of a business that hired a CPA/consultant to help him prepare his company to run without him while he was undergoing surgery the following month. There was a possibility that it may take more than a week to recuperate, so he wanted peace of mind that the business could run without him. This is a great idea! Having someone you can trust to take the helm while you are not able is outstanding. Not only will your business be in good hands, but you can concentrate on getting better without worrying about the business.

If you can’t find someone who can do it all for you, try splitting up a lot of the tasks and delegating them to others. They will welcome the opportunity to try new things and help out. You might find that they could do it just as well or even better than you! If so, you have just freed yourself up to do some other things that you didn’t have time to do!

If your rainy day is a cash shortage, there’s quite a few things to do immediately (and now is a good time to think about them – while you still have enough cash!) Stop spending. Make a buck spend like a hundred. Unless you positively, absolutely need to buy something to conduct business, postpone it.

Check your accounts payable. Are there any you can delay without jeopardizing your credit? Waiting a few days to pay can make all the difference in the world.

Check your accounts receivable. Are there any overdue accounts? Are there any friendly customers that might be able to pay early? These are two sources that could help you through a cash crunch.

Do you have any inventory that could be sold? The inventory doesn’t make you a lot of money sitting on the shelf. Yes, it’s great to have everything your customers need in stock – but as a stopgap you can probably lower your inventory for a while.

What if the rainy day comes in the form of a frivolous lawsuit? Whether it is frivolous or not, a lawsuit is a lawsuit – and it is often a distraction to the business. If you are trying to raise investment capital, and you get a lawsuit – investors evaporate into thin air.

The cure is to a) never have a reason to get a lawsuit, b) keep a good lawyer in the wings before you need him or her – they can guide you through the mess. You and your lawyer can assess whether a countersuit is proper or whether it is better to just let it go away.

Planning for the rainy days can make them less stressful. As in life, if you bring your umbrella – it probably won’t rain – but if it does, at least you’ll stay dry!

Bill Cunningham is the CEO of OneMorePallet.com and shop foreman at the Greater Cincinnati Venture Association.