CAIR 4: Can Duct Tape Help Businesses Recover from COVID-19

Hey everybody, this is Grant Larsen. Thank you for joining ClickAI Radio. Okay, so COVID-19 has certainly been on all of our minds and it has radically impacted our businesses. But to talk about that, I want to back up and tell you just quick story. So one day, my kids were building something that they called a moving landmass. Now, it was a platform of wood and nails, and duct tape. And the idea was to ride the platform, this this moving landmass down the street. So it did okay, until the actual framework fell apart. Because the duct tape was not the answer, right?

Although duct tape is the answer to a lot of things. I myself am a duct tape fan, but it didn't have the properties that were needed for this particular purpose. So sometimes in our businesses, we apply duct tape, right? And and sometimes that's just fine. It's the right answer when we just got to hold something together whether it's a quick business process or minor adjustments or changes in some messaging, gotta hold it together so that we can provide value to our customers. Well, coming out of COVID-19 may actually require some duct tape, of course, but in a lot of cases, it's going to require a more serious business re architecting. And looking at that, I'll give an example. Recently I was looking at an article in The Washington Post, the title of it was and you may have seen this, the title of it was the end of small business. I think this came out on July 9, take a look at it. The writer does a good job describing his view, right? He basically says, Look, it's probably over for a lot of small medium businesses, only the large corporations are going to survive this. He makes a couple comments about even when the economy recovers more or less obviously people are going to still need to buy things, but the Coronavirus is going to you know, obviously change mainstream across the country right.

It's gonna accelerate some changes that have been waiting a long time. And so a lot of the mom and pop stores are at risk. This is the viewpoint of course of this writer. He further went on to point out that in the 1980s, one half of retail shopping took place in independent stores. And today, it's less than a quarter. He makes one other key point that I'll just call out here. He says, like, many small businesses and weaker corporations won't have enough capital to outlast the pandemic, and their customers will be claimed by a handful of winners, with the cash and the technological infrastructure necessary to survive and prosper in the new environment. That's the context so we're living in so that's in quote there. That's the context we're living in, right, which is a lot of our small businesses are at risk. No doubt, no surprise to everybody. But it's gonna be Hey, can you hold on to your cash and can you survive the pandemic?

Make it long enough so that you can still have another business day. I've done my share of investing and trading, the real thought there is live to invest or trade another day, right? Well, as a business owner, can we live to invest and trade or do our business another day? So again, take a look at that Washington Post article, interesting viewpoint, flipping the coin. I also looked at another article, this is from Forbes, and they were talking about their viewpoint was, hey, six ways to rebuild your small business after COVID-19. All right, so the Washington Post was just a little bit like a you know, the sky is falling, and in some case, it really has fallen. In other cases, though, like from the Forbes perspective, they're describing, hey, in order to come out of this, right, there's six things that you got to take a look at number one, and this was let's see, this was April 20th 2020 is when they wrote this article. So take a look at that one online. six ways to reopen as a small business number one, here's the six things they pointed out. Number one, assess the financial damage. Number two, take a second look at your business plan. Number three, consider whether you'll need funding to recover. Number four, revamp your budget to account for new spending. Number five, develop a timeline for rebuilding. Number six, create a contingency plan on the next crisis. Right now, I want to talk about a couple of these for just a moment. So on Step three, where talks about Hey, consider the funding that you might need to recover. Clearly, you've heard about the SBA, the Small Business Administration that's been handing out some pretty decent loans recently to small businesses. I know a number of people, number of business owners, small business owners that have taken advantage of that, and I can see some real value in it. I think the interest rates are really low. You see everything from

Like 2.75% to 4%, those are some pretty decent rates. I think I also saw that you don't really start paying it back until like a year after you, you actually take take the loan, so they give you 12 months. And then I think it was a 20 year sort of deal. So it's an awesome stimulus, of course, for the small to medium business. But earlier, when I first started this episode, I talked about duct tape, right? And here's, here's the point I want to make on it if I just apply for an SBA loan, but I continue to spend and execute on the same business model as I had before. COVID-19. The likelihood of my business sustaining the big changes is much smaller. In other words, I probably won't survive. Here's the point. It's kinda like duct tape, right? It's if I if I just take the money, and I don't really change the way I'm going to do business.

I don't change my business architecture, my plan, etc. But I just take and apply it. I'm kind of duct taping the situation, because the world has changed, as pointed out in that Washington Post article, whether or not you agree with everything there. There's some great insights there. The fact of the matter is if we just take that sort of funding, and we just apply it, again, without making any sort of adjustments, we're kind of duct taping it right? And like my kids big moving landmass, it's not going to hold up to the weight of things. So here's a thought, rather gonna suggest that you think about what assets Do you already have, which can give you insights in order to help you make adjustments. So I'm definitely a fan of taking advantage of the SBA loan, but don't just do that on its own. Let's also take a look at what assets you've already as a business owner developed over time. Well, you've captured the information that you have available to you now

As you think about, you know, revamping your budget, which was number four in that Forbes list, gonna encourage you to think about a few things here. First of all, you've got a lot of business information or data that you've collected over time, right? And in fact, lots of times you have a lot of data, it turns out that a lot of that data contains insights to patterns, your patterns, right? So it's the patterns of your good behavior, and your bad, you know, your bad behavior, things that they shouldn't have done, right. He listened to some of my previous episodes, I shared some bad things that I did, and some of my earlier startups 20 plus 30 plus years ago, so easy to do the bad things, but I tell you what, rather than just taking the quick fix of the money, let's step back and look at your data, what it's going to tell you, right and what the insights are there. They're so before you get too far, examine the data or get someone who knows how to

Do it right to examine the data and identify your best behaviors and the activities to carry forward and then identify those behaviors, right the things to actually stop doing. It makes no sense to come out of COVID-19 with a renewed plan, and updated funding if we continue to spend our time and resources money on bad behavior. So get someone to apply some artificial intelligence and data analytics on your data to help get you the insights. It actually is a good spend, right? It's a good spend to stop sharpen the saw in you know, Wasn't that a Stephen r covey thing? I think, yeah, he's like a sharpen the saga. Right? This is sharpen the saw time. All right, step back, take some of that funding that you're getting from the SBA and apply it to doing some data analytics and some artificial intelligence to tell you based on your patterns, the things that are good, they're not good and do some predictive analysis on that. So you're spending

In your time on the better activities, you know, duct tape is a powerful thing. In fact, one of the things that our kids have done with it over the years is birthday times or Christmas times, they'll even wrap presents in duct tape. Right? And that makes for quite the serious moment trying to get that stuff on done. So still a fan of the duct tape, but if we don't, if we don't work smarter, coming out of COVID-19 we're actually gonna have a hard time surviving as small to medium businesses, right? Have In fact, there's some effect. The bad thinking, back to that Washington Post article, he made the comment that a lot of that money is moved to you know, the large organizations right, like Amazon or Walmart or things like that. So as a small to medium business owner, we're obviously competing with organizations that leverage a lot of data. Amazon at leverages a lot of data, right? They look at how you spend, they look at how you search and so on.

We actually have to play a similar game as a small to medium business owner. Now the challenge in a small medium business organization is, I'm not going to be able to go hire a large team to do that. Well, there's organizations that will help you through that. So you don't take on all that cost. But you get an opportunity to go at the data and insights that are in there with very little cost to yourself. So I sure hope you take a moment to don't apply duct tape; don't just take the money and keep doing the same things. Stop and examine what you got at your fingertips stuff that's already there available to help you. Alright, everyone, keep buying duct tape on the fan. Let's use it for the right reasons. Thanks for joining. My name's Grant Larsen and but until next time, let's use our duct tape right.

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