COVID19 and the Impact on Business
Well, it's been an interesting 9 weeks. Right?
I'm one of the lucky ones, I've spent the last 9 weeks gainfully employed and busier than ever while I watched the US economy grind to a maddening halt across the sectors I love the most: hospitality, entertainment, food and beverage, travel... And I've wondered, sometimes out loud, what the great depression looked like and I still don't know how it compares. All we have are the photos of breadlines and hollowed out eyes...and that's not what I see right now. I see people like me and people less fortunate, which are disproportionately low-wage folks. It's rough out there. It's not getting better when Washington is talking about, "the deployment of human capital"
But business has continued to move forward, albeit in fits and starts.
Today I closed a relatively large deal with a key manufacturing client. It was hard won. I believe this hard won nature is the new normal. What does that mean? Large enterprises are looking at capital allocations through a microscope. Prior to Covid, while money remains relatively cheap, capital allocations are being evaluated. War chests need to be large. And to be blunt, we've seen robust expansion by many businesses without some of the typical due diligence one might expect.
Now, I'm not talking about packaging up junk real estate bonds or anything, but large projects with little or no meaningful ROI are extinct. Companies that are continuing to invest are examining their customers and determining if there is still appetite. That's the rub right now, EVERYONE is affected. Marketing, sales, production, finance...every single department.
What that's meant for me is that the cycle to close has been substantially extended, the terms are less favorable (net90 is the new net60) and multi-layered stakeholder scrutiny is normal. It's not enough to rely on historical relationships, you absolutely must lean into facts and value and realize accurate fixed bids pricing models are well positioned to take advantage. We're one one of the lucky companies that takes VBB seriously, when we scope a project we do so at a high level of fidelity and that effort is paying dividends right now; fewer clients are interested in a time and materials project.
We're also well positioned because we offer technology and professional services that are deemed mission critical. I certainly wish more of my clients were willing to take this moment to ditch legacy systems and update (there has never been a better time to reboot old, out of date technologies!) Some people are making the jump...but it's not a widely spread attitude and it should be, technology must be replaced like any other consumable.
Finally, I believe we'll get through this and most of my clients do as well.
Will things look different? Count on it. But commerce in all forms will find a way to move forward and I hope it puts the vast majority of folks who have been negatively affected back to work. I personally hope to be hiring some of them!
Stay safe. Wear a mask.
If you want to reach out, please do. I'm the same place you are. In front of the computer!