Type and hit ENTER

  • Home
  • Articles
  • About
  • The Book
  • Media
  • Speaking
  • Subscribe Free
  • Advisory
  • Contact
GET CONNECTED

 

"Witty, clever and extremely relevant in these godforsaken Zoom times." Zoë Foster Blake

Book on sale now from Penguin Random House.

  • Home
  • Articles
  • About
  • The Book
  • Media
  • Speaking
  • Subscribe Free
  • Advisory
  • Contact
I Lost Six Figures Last Week: Bad News Strategies
Share
Bad News: Coronavirus
Articles

I Lost Six Figures Last Week: Bad News Strategies

February 24, 2020
-
Posted by Ian Whitworth
https://ianwhitworth.net/wp-content/uploads/2020/02/Corona.mp3

Audio version 8 mins slight swearing. Or get it on Spotify.


Do You Want The Bad News Or The Bad News?

 

Fucking hell, 2020, do you think you could manage to squeeze any more bad news into the first six weeks?

You get the call from your business partner. You can tell it’s bad news just from the vocal tone when they say hi. There’s a tightness in your stomach as you think: alright, what is it?

“Network World* [conference] just got canned. Corona. Nothing we can do.”

It was a big deal, one of the largest things we do all year. The client is the nicest ever. They had no choice.

We added it to the towering stack of 2020’s short-notice event cancellations. It started with international conferences cancelled a week out because they didn’t want their delegates choking on bushfire haze.

Then coronavirus, putting the fear into every organisation that does public gatherings and strangling supply chains in ways that will play out for a long time yet.

Our cost structure and seasonal demand mean every revenue dollar lost now comes straight off the bottom line. These aren’t the profit maximising months, they’re all about minimising your losses.

For me, personally, that’s a six figure loss so far.

It’s not like share value plunges, which are a bit abstract because you weren’t going to sell them now anyway. This is actual money I had expected to make – sales we had purchase orders for. That won’t bounce back when the market recovers because that cash is as gone as MySpace.

Particularly bothersome as our 2019 ended with solid activity already booked for this year, unusual in our game.

Not gonna lie, having the business grind back down to first gear is pretty annoying.

Is it the end of the world? No. Because you should not start a business if you expect all plain sailing and no nasty surprises. That’s not how it works. Getting angry at bad news ain’t going to change anything. One of the essential arts of business is keeping pretty Dalai Lama about things you can’t change. And moving quickly to deal with the things you can.

 

Dalai Lama

“Are you really going to use me in a business article mate?”

Downturns Pass But Staff Will Remember

 

Last year we got the staff together in some of the offices and pointed out we’re heading into sketchy economic times. Not certainly, but enough of a risk to bunker down a bit. We asked for their help, to keep costs down and use fewer freelancers. Not brutal cost-cutting but just being … careful.

They lifted to the occasion, so now we’re better positioned to deal with this new menace.

We have sixty-or-so full time people who have all gone above and beyond for us, and we’re doing everything we can to make sure everyone keeps their jobs. In five years’ time, they will remember that time we had their backs rather than just doing a convenient round of layoffs to protect our profits.

That said, if you’ve got someone who everyone knows to be hopeless and is just being shuffled around into non-contributing positions like HR or content curation, now is an ideal chance to vote them off your island if you follow my drift.

Don’t infer from that that I’ve watched the entire last 20 years of Survivor, taking constant mental notes about business strategy.

I’ll leave that to my business partner who has done exactly that.

When it’s bad news time, gather your staff and tell them in person, before the rumor mill takes hold. Don’t send a fucking memo like some detached management lizard. Lead, that’s your job.

Great teams are forged in the hard times.

Bad News Happens: Expect It

 

We didn’t know coronavirus was going to happen. But we know something is going to happen at least once a decade, and that thing isn’t going to happen at the time of your choosing.

It’s good to stay downturn-fit. Signs your business has low downturn-fitness:

Your business has weak margins from saying yes to garbage clients, in the hope that one day they’ll change. Spoiler alert they will never change.

You’ve pulled all the profits out of the business like it’s your personal ATM.

You give people credit because they seem nice.

You have leases on everything, both in your business and your personal life.

We’re in a capex-heavy field. A lot of companies in our field have grown entirely on leased assets. We’ve mostly bought ours out of earnings, so we know we can afford them.

When the famine comes, our only major costs are rent and wages.

It’s much safer inside that balance-sheet bunker. But we can still hear the screams as desperate lease-burdened competitors fight it out on the revenue-less badlands.

Could you survive a couple of months with zero revenue? Ask yourself that, because it happens. What’s your plan?

 

Balance sheet bunker

Doomsday prepping in the ol’ balance sheet bunker

 

Risk management is weirdly polarized depending on business size. Big business can’t get enough, a sea of code red flags around every corner, so they also don’t get much done. Small businesses never seem to think about threats, they’re all just business as usual until they go: hey what’s that large single headlight heading toward us?

 

The Modest Spenders Will Inherit The Earth

 

So much business inspo is embarrassing dicks flaunting sports cars.

 

Ferrari ownership is bad news for your long-term prospects

Ferrari the natural manspreading platform of entrepreneurs

 

Sorry for the self-quote, but from this story:

If you keep your living costs low, you can just make decisions without fear because your prestige car repayments or school fees aren’t threatened. Paradoxically you make a lot more money if you’re not scared about losing it.

Modest living costs are like some amazing force field as you head out onto the business battlefield:  the bullets and explosions just bounce off while you wander around in a relaxed state of mind.

If you’re looking at business – or your career – as a means to buy prestigious things, you’re making yourself weak.

Look at, say, Roxy Jacenko, influencer and famous owner of many prestige things, as featured in the Life & Luxury section of AFR Weekend.

“In an industry where perception equals money, spending a five-figure sum on curtains is an investment, says publicist Roxy Jacenko.

“Did I need $75,000 curtains?” she asks AFR Weekend pointing to the grey curtains adorning the meeting room in her two-storey office in Sydney’s eastern suburb of Paddington.”

“No, I didn’t. But guess what, you walk in this door as a prospective client, you think: ‘F—, this girl must be good at her job. She owns a building, it looks good. She can talk the talk’.”

Here’s when $75,000 curtains are an investment: when you’re selling $75,000 curtains to people who believe in curtain-based prestige.

Dropping Warren Buffett in your business advice is a massive cliche, but forget his investment strategy and look at this spending. The guy has lived in the same modest house in a non-prestige city since 1958. He pays himself a $100K salary. He likes his work. Your essential Buffett quote of the week is:

“Your standard of living is not equal to your cost of living”.

 

Bad news strategies

Who’s your curtain role model?

 

How much fear does a downturn hold for Buffett? He’s loving it, it’s his version of Black Friday Sales where he can pick up sweet deals on distressed businesses.

Businesses that overspent on curtains in the good times.

 

* Not its real name, a bunch of major conferences have been spiked in the last few weeks.

 


I wrote a story with more trauma tips about burning $100K+ amounts, but on things that were our own stupid fault, worth a read:

Great Business Mistakes

If you’re new here, real-life tales from the entrepreneur coalface each Tuesday. Get it sent straight to your inbox, drop your email here.

And don’t forget the audio stories are on Spotify now.

 

Spotify link

 

February 24, 2020

Related News

Other posts that you should not miss.
13 Things You Should Banish From Your Business by Ian Whitworth
Articles

Old’n’Dirty: 13 Things To Banish From Your Business

June 24, 2019
-
Posted by Ian Whitworth

The decor, processes and technology that make your business look like the one that turned up to the party in Crocs.

Read More
June 24, 2019
Posted by Ian Whitworth
Articles

Writer vs Jasper: can AI steal my job?

November 14, 2022
-
Posted by Ian Whitworth

AI is coming to change your working life. Some of your precious skills are doomed and you can't stop it happening. Here's what you can do.

Read More
November 14, 2022
Posted by Ian Whitworth
Articles

The Raccoon Bypass: Outflanking Procurement

May 13, 2019
-
Posted by Ian Whitworth

When the procurement raccoons take over, it's all about understanding risk, and building your relationships higher up the food chain.

Read More
May 13, 2019
Posted by Ian Whitworth
← PREVIOUS POST
Your Need To Be Right Is Holding You Back
NEXT POST →
The Intoxicating Pleasure Of 'No'

3 Comments

on I Lost Six Figures Last Week: Bad News Strategies.
  1. Marie Fitzgerald
    February 25, 2020 @ 12:28 am
    -

    Hi

    I was wondering why you started this blog?
    Who reads it prior to you sending it out?
    How did you first prompt it?
    Do you write one a week?

    Thanks
    Marie

  2. jane
    February 25, 2020 @ 12:59 am
    -

    I thought Roxy was all smoke and mirrors. Turns out, it’s f#$!ing expensive curtains and consumer psychology know-how that would make Rory Sutherland proud. Thanks for another brilliant piece.

  3. Ian Whitworth
    February 27, 2020 @ 9:15 am
    -

    Thanks Jane!

FREE E-BOOK

SUBSCRIBE
MOST POPULAR
  • Last-minute grocery businesses are a massive bag of dicks
    June 27, 2022

    It’s a business model that seems to have cherry-picked all the worst, hardest, most expensive elements of running a business.

  • Scotty Marketing
    3 post-Scotty lessons: good marketing is not like that
    May 30, 2022

    Don't be a product that people only buy once. How to make marketing a force for honesty and profitability in your business instead.

  • Undisruptable South Korea deal
    Undisruptable’s first international publishing deal
    January 31, 2022

    Undisruptable will see its first international release later this year and it's not in a country you'd expect.

  • “An Australian business classic.” Reviews of Undisruptable
    July 12, 2021

    The reviews are in and they are very good.

ABOUT IAN WHITWORTH

Ian Whitworth is a reformed advertising creative director turned entrepreneur with a successful national group of businesses that he doesn’t work in day to day. Read more

POPULAR TAGS
management
branding
Sales
Marketing
jargon
Persuasion
Covid 19
Nickelback
Pitching
Coronavirus
strategy
MBA
startup
Copywriting
Motivation
Business
CEO
Design
Graphic Design
Business Travel
Elon Musk
Frequent Flyer
David Attenborough
Advice
Lacey Filipich
Saxton Speakers
Scene Change
Penguin Random House
Gary Vaynerchuk
Sales Pitch
Tendering
Planning
Conversation Skills
Customers
Customer Service
AI
Shingy
LinkedIn
Simon Sinek
Success
Presentations
Mr Pigden
Motivators
Entrepreneur
Ian Wright
Archives
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • Contact
  • Subscribe
  • Privacy
  • Terms & Conditions
© Whitworth Communications 2020
I Lost Six Figures Last Week: Bad News Strategies - Undisruptable