How to deal with losing revenue cuz of Covid-19
A lot of us are losing money right now.
My future revenue is down 15% right now. [1]
So how can we make the best of it?
I think a big mistake people are making is acting as if all money is vaporizing. That simply cannot be the case. If 100% of business went bankrupt then how would you get food, drinks, and most importantly, toilet paper?
People are still spending money.. they’re just spending it in different places. I think you could roughly divide business into essential and non-essential companies.
Surprisingly, entertainment is also included in the essential category. It makes sense with people being afraid and bored.
So here’s what to do:
- Either pivot parts of the business model.
Maybe you can keep doing what you’re doing but simply shift your userbase. Perhaps you need to change your revenue model. (From 1-time fee to subscription or vice versa.)
Maybe you need to tweak your value prop. (Ours is usually helping double the revenue, but our clients seem to be more interested in getting help cutting cost right now.)
2. A new project entirely.
The possibility exists that you can’t pivot your business and make it work. Maybe you sell some piece of software that just isn’t needed right now.
Maybe you sell a product that’s more of a luxury good.
If that’s the case you should consider trying something else entirely. (After you’ve tried to pivot different aspects of your business model.)
Since you’re a founder, this is where you have a unique and unfair advantage. Namely, you’re used to uncertainty.
You’re familiar with going to the marketplace and saying: ‘What problem do you need solved? Pay me X and I’ll solve it for you.’
A founder is essentially an iterative ‘machine’ capable of locating and creating economic value by identifying and addressing problems a subset of the market place has.
There are many problems people have.
Problems that, combined with your unique talents could be excellent opportunities.
NOTES
[1] We work with companies for free during a 6 month period. After that, they pay us a fee, which is why problems today affect us 6 months down the line.
