For most business owners, 2020 has been a year filled with the unexpected. Perhaps you’re one of the fortunate businesses whose products were in great demand this year. Or maybe you were able to quickly pivot and adjust to new market requirements, which may have saved your year. If you were fortunate, you had sufficient cash reserves built up to get through any downswings in your business.
Unfortunately, there are many businesses who, for various reasons, find themselves having to restart. Restarting is one of the business phases of the “5 Rs” that I’ve discussed over the past few weeks.
Businesses in the Restarting phase are experiencing “Day 1” all over again.
Reasons You Have to Restart
Typically, a business finds itself in the Restarting phase because of an external factor. In this phase, a company isn’t here because it was operating inefficiently or wasn’t keeping up with changes in the market. Many have great products and a valid business model. But something outside of its four walls has knocked it out.
Has this happened to you?
These knock-out events are outside of your control. Perhaps your business was destroyed by a tornado, hurricane, or fire. Maybe you had to shut down entirely during this year’s lockdown.
The fact of the matter is, one day, you had a thriving business, and the next, you didn’t. Now you have to move quickly—and wisely—to get your business back up and running. But what’s the best way to do that?
Critical Steps When Restarting
The way you get through the Restarting phase, to some degree, will depend on what caused you to be in this position. If you’re restarting because your location was flooded in a hurricane, you’ll take different steps than if you had to close down during the lockdown. Was the event a one-time event (like a natural catastrophe), or is it on-going?
Regardless of the cause, the first thing you have to ask is, how do you get started again and open up your doors safely and be able to do it as quickly as possible? And so now you’re in triage mode, and having a strong cash position is very important.
So the first thing you want to do is take an assessment of where your cash is. Do a forecast of where your cash needs to be for you to come out on the other side. Ask yourself these questions:
-Do you need to get loans?
-Do you have to get government help?
-What do you need to do?
-What can you take advantage of to strengthen your balance sheet and your cash position so that you can confidently make the right decisions to get restarted in the right way?
Also, it would help if you positioned yourself correctly. If your knock-out event was a one-time event, like your building burned down, then you are very quickly trying to figure out where you can do business in the interim until your new facility has been rebuilt. If it was a more extended event—like the lockdown—are others in your industry also experiencing this same need to restart? Now it’s a battle to fight for market share and to get back quickly.
The Silver Lining
There is a silver lining to all of this. When you’re in the Restarting phase, you have an excellent opportunity to redefine your “why,” to redefine what you want your new business to look like. Just like in the Rebuilding phase, this is a great time to ask yourself if you really want to build back and be the same company you were yesterday, or do you want to take this opportunity to get a clean start?
You now have wisdom, knowledge, and experience that you didn’t have when you started your business the first time. Think structurally—could your business operate better with fewer layers and less complexity? Think operationally—is there a better way to do what you do? Maybe with upgraded equipment, you can produce a better product, more quickly and more efficiently. Just think fast if you’re in that position of having to battle for market share. Your competitors are restarting as well. Restart smarter!
If you’re in this Restarting phase, I know that all you can think about right now is how to get started up again in the right way and position it so that it has the least amount of cash drain as possible. Carefully consider the questions I’ve presented here and get started. You’ll get back into the rebuilding phase and be a healthier company for it.
For tips and insight into restarting, rebuilding, and then rocketing your business, I invite you to grab a copy of my latest book, The Leader Launchpad. I’ve poured over 30 years of experience into this book, and I believe it will help you get your business back where you want it to be.
Be sure to come back next time as I continue on our journey through the 5Rs and discuss the Resuming phase.