It was early afternoon on March 13, 2020. My body was weak and I was shivering through my Costco sweatpants (thanks mother-in-law) while working from home. I had just received my sixth break-up email from a client. But I was immune to them at this point.
At my CRO agency, we have startup clients that typically have a short runway of cash. That means they’re vulnerable in a downturn and especially vulnerable in a pandemic.
In the past 48 hours, we lost $400,000 in ARR (annual recurring revenue). Essentially, 18 months of effort vanished overnight for the following reasons:
• Clients were cutting all costs
• Clients lost VC funding
• One client went out of business
But, I wasn’t sick from my business. I had tested positive for COVID-19. After two cross-country flights in two weeks, the travel caught up with me in the worst possible way.
My business was imploding. My wife had a 102-degree fever. But that didn’t matter. We had no child care, so it was time to be super-dad. I was on dad duty.
Running a business can be hard. Especially when you’re a parent. But nothing prepares you for our current environment.
As a bootstrapped founder, you work so hard to build up your recurring revenue so you can reinvest in new hires, site upgrades and SaaS tools. It’s a slow game but it’s fulfilling to take nothing and turn it into something — until a once-in-a-lifetime event hits.
I’ve never thought about throwing in the towel on my agency, but that day hurt.
Fast-forward 30 days, and I have experienced a million emotions between now and then. I already work hard, but this situation put me into overdrive. Since that day I have been paranoid my business was about to implode, so I channeled that into work.
This month we’re on pace for our best month and we just closed $250,000 in ARR. How did we uncover new business when the economy is coming to a stop? Here are some of the highlights of how we pulled it all together:
Model out your scenarios. Develop scenarios based on your base reserves and incoming cash flow. For us, that meant 1) Worst-case scenario: we lose all clients, and 2) Current state: Keep our existing clients with no growth. This helped me project the cash runway we have in two scenarios so I could start planning. I felt much more in control of our new landscape after this.
Don’t do it alone. I knew I couldn’t do this alone. I tapped the shoulder of founder friends, advisors, mentors and executive coaches to help me tackle this problem. Their input was invaluable. I was able to share my current situation and my plan. They helped me uncover what I needed to focus on and, more importantly, what to not focus on.
Have a bias toward action. Intentionally decide to lean on the side of taking action. For example, I created more content and documented all my thoughts along the way. By putting my thoughts out to the public, it helped me think through my ideas and opened myself up to getting feedback.
Be transparent with your team. I had daily chats with my COO and was transparent with my team about our sales and pipeline. Now isn’t the time to hide. Instead, enlist your smart people to help. That means giving them the right information. You’ll be surprised at how your team will rise to the occasion when they feel empowered to do so.
Deepen relationships with existing clients. After losing $400,000 in ARR, we went above and beyond to be strategic partners to our existing clients. It’s not about margins but being great partners. Business owners are going through unprecedented times and need a partner to help make strategic growth decisions. We were very intentional about bringing up the current market and offering more strategy and services to help them in this new normal.
Do the opposite of the majority. We decided to double our ad spend and capture more leads. While overall demand is lower and people are pulling back on their marketing budgets, CPMs are lower and there are still companies that need your help. We’re seeing that leads are still coming in. Now it’s about being open to a custom plan that works for them and their budgets.
Focus on impact over effort. Webinars. Paid ads. Free Audits. Those things work for us. We decided to go all-in on what’s proven and known. We don’t have the luxury of time to try and stand up unproven marketing tactics and channels. Lean into your proven lead channels.
Always help and add value for free. I did a free growth marketing talk a year ago that seemed like a waste of time. But, luck would have it that one of the attendees was interested in working with us. And they just so happened to reach out in April. Hallelujah! It reinforces that if you’re always putting yourself out there and trying to help, good things can come back your way.
We aren’t out of the dark yet, and this post isn’t a celebratory final chapter. I’m more paranoid than ever. All of this can change overnight. This article is me capturing a crazy moment in time. Too often, posts show the edited version of a career. Hope this can help you in these crazy times.
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Author: Jim Huffman, Forbes Councils Member