294: Responding to COVID-19: What Entrepreneurs Should Be Doing Right Now

Nathan: Yeah. So first question I ask, I’ve interviewed you before a while ago. How did you get your job? Just for context, for people.

Steve: Yeah. No worries.

Nathan: Why are you qualified to kind of share what people should be thinking about right now during these times?

Steve: So I’m not the typical business consultant. So I started off, I was a firefighter. So I spent eight and a half years full-time, dealing with life and death situations, lots of different disasters and challenges that happened across Melbourne and across Sydney. I then started a company called Fire and Safety Australia, well over 150 people now, building to a national successful business, revenue in the tens of millions of dollars per year. I then started working and mentoring people, because a lot of people wanted to grow their business.

So I started training for the Entrepreneurs’ Organisation, where you and I first met.

Nathan: Yeah.

Steve: I would have trained nearly 1000 business owners, from 250,000 revenue to 15 million dollars a year. Fell in love with it, retired out of my CEO role day-to-day and my Foundr role, and now I work with about 20 small and medium businesses. So I’ve probably worked with 1,000 businesses in the last five years. We’ve done a pretty good job of it including with Foundr, about helping a lot of them to be able to grow. And I’ve really been spending the last two weeks since this sort of crisis has happened, working through my home business and making sure that we’ve got the right measures in place and working with about businesses day and night, from 6:00 in the morning to… you and I were text messaging in at 1:30 AM or something last night.

Nathan: Yeah.

Steve: So hopefully, I can help your audience today with some key things to think about with this current crisis, knowing that I’ve helped a lot of businesses in the last couple of weeks and for many years, with my background.

Nathan: So yeah, with your background and everything that we’re thinking about and the stuff that you think that is really, really important, I had to get your comment and share because I think you can provide a lot of value to people. So first of all, if anybody has a business, no matter where their revenue is at, let’s just say they’re working on it full time, they generate sales hopefully every day, sub let’s just say 100K, all the way up to tens of millions, hundreds of millions a year. What should be… let’s say sub 100K to a couple of million a year, what should people be thinking about, whether they have a team or not, or they’re solopreneur, what do people need to be doing right now?

Steve: So to give this some context, I’m going to approach this the same way a chair of a couple of boards with business well over 100 million dollars, with the same way if a business is at 100,000 dollars, right?

Nathan: Yeah.

Steve: Which is, I think business owners, now more than ever, need to understand first of all, where they’re at. Right now, is this an opportunity for them to grow, or they sort of getting beaten around their head a little bit at the moment and going backwards? So the first thing is to understand, well where am I up to, and is it opportunities then we need to look at, or is it actually protection we need to make sure, and survival?

So then I’d to understand more the different scenarios. So we can’t predict the future. It’s more an uncertain time than ever, probably in the history of the world, but what are the different scenarios and impacts, and what does that look like? So if our sales went back 10%, or 30%, or 50%, what does that mean for us? Does that mean we need to look at our cost more harshly and understand where do we spend money, or does it mean that the opportunity is for us to grow and to look at where we’re going to invest money to grow?

The next thing is I think they’re going to be transparent with their team. If I’ve got a team, I think you’ve got to be open and say, “This is where the business is up to. We’re either fighting and we’re fighting to stay alive and survive, or this is an opportunity for us to be able to grow the business.” But I think the worst thing they can do is put their head in the sand. I found a lot of business owners in the last couple of weeks that I’ve worked with, they’re going through this huge period of uncertainty, and they’re really confused around what to do.

And I think if you’re a leader, whether you’re a leader of oneness with yourself, or a leader of hundreds of people, you’ve got to have, well what’s the certainty? What are the decisions that we can control? We can’t control what the government does, we can’t control anything about the virus, but what we can control is our plans, how aggressive we are with our plans internally in the business and what decisions we make. So I’m really trying to get businesses to almost bin their next months of plans.

Whatever we thought 2020 was going to be is not going to be. It’s going to be different. It’s going to be better, or it’s maybe going to be worse. But what are the key things we need to do over the next 90 days? What are the key sort of three things for us to focus on? Whether it’s we need to drastically reduce costs because our revenue has fallen off a cliff, now let’s go in and look at it hard to make sure we got survival. Or maybe there’s opportunities for us to be able to grow. There’s opportunity for us to be able to grow. How do we invest better in sales and marketing, delivering on our promises, helping a lot of people?

But I think the most important thing is they’ve just got to get straight with where are they today, and then have a plan around, how can we create certainty? Certainty for ourselves for our team, and what are those key things we need to do to bring the business back?

Nathan: So one thing that I found interesting when this all started happening I didn’t… you said I was one of the last clients of yours to call you and more because I was kind of… I wasn’t really paying that much attention, we’re doing okay, and one thing you said was obviously, cut costs, right? Work on cost-cutting, which we were doing bits and pieces there, but then you also said that, “Don’t stop sales and marketing.”

Steve: Yeah.

Nathan: Why?

Steve: So good points, right? So I think we’ve got to be spending money in the right reasons. So when I say cut costs, you probably have to have a view, which is, “Do we have an opportunity to grow during this, or is our focus on survival?” If our focus is on survival, then we have to look more at our cost going, what’s nice to have, versus, what do we have to have? Have to have our masks to operate the business? Don’t go and cut those things. But if we’re in a business and survival, we’ve got to make sure that we get aggressive with cost early.

Most business owners that I’ve worked with in the last few weeks, and with different challenges around turnarounds in the past, they’re way too slow. So right now, we need to model and say, “If we’re doing 20% less revenue, 30%, 50%, what decisions do we have to make? How are we going to get our costs under control? But the reason that I talk about investing in sales and marketing is because most businesses going through this, that have a negative revenue impact, that’s how they’re going to get back.

Sales is king. A lot of people don’t like sales and say sales is a dirty word, but for most businesses going through this, sales is what’s going to get them through. Costs might be able to lean it out a little bit more and maybe give us more opportunity, but we’ve got to be out there. So from what I’ve seen with businesses lately, it’s cheaper to get in front of customers now online than what it was a month ago. Every industry might be different but that’s what I’ve found recently.

So how do we get in front of our customers? I think the other thing is to actually think about, where is my focus going? Right now, unless you’ve got a business which has in-demand products and services due to the current coronavirus crisis, it’s going to be hard to get in front of cold traffic and to get more people in. Most people forget about their existing customers. If I look at all the businesses that I’ve worked with, all of them that have been able to really dig down deep on their existing customers have always been able to do well.

So right now is the time for us to look at our existing customers and say, what industry segments, if we’re in a business-to-business sales environments, or without consumers, what are the key things that they need from us right now? How can we help them, and what products or services can we do to try and get them through it?

So I think generally, unless you’ve got an in-demand product or service with the current environment, harder with new customers, but we’ve got to go all in on existing customers. Let’s not give our existing customers any reason to not be happy with us. Let’s have 10 out of 10 service. Let’s support them, let’s help them, let’s even actually just reach out to them and say, “How are you going?” And really use the personal connection to try and build a relationship with them, because maybe our customers are doing it tough now as well.

Nathan: Yeah. And what are your thoughts around changing positioning messaging for this point in time? Because I’ve spoken to a few founders already and we’re going to do a whole series on this stuff. We’re speaking to founders of all varied levels of businesses. What are they doing and just… because this is what everyone is talking about, and we need to provide content to help people.

I’ve noticed quite a few are changing their messaging and finding that that’s actually landing. So sales might have gone down, but now they’ve changed their messaging and things are starting to come back online.

Steve: Good point. So I think what’s been amazing to actually see in the last few weeks, and I would have spoken to at least 30 different business owners, from 200,000 up to 150 million dollars, and this has caused people to really innovate. Those businesses that are really suffering, you’ve got to innovate harder than ever before. You’ve got to think, “What are the problems my customers are trying to solve?” What are those… your term is painkiller products. What are the things I can use to help them to really get through this?

Now my only caution on that would be, we need to think about our brand and any business that tries to use this as a targeting way, and which could be seen as a way to profit from this. Can be seen really poorly. So previously, natural disasters in Australia, I’ve seen people do that, and it’s really brand damaging. So I want to make sure that our messaging is: how can we help people? So maybe there’s free content. Maybe there’s product demonstrations or trials, or maybe there’s something we can do to help people. Let’s not go and take advantage of people. Let’s make sure we help people with the areas they really need.

So I think making sure our message is clearer than ever before, particularly with the existing customers to say, “This is how we can help you. This is how the current environment has changed our business, therefore this is how I’m going to pivot to really get you through it.

Nathan: Yeah. No, I love that because that kind of brings me to my next point is if you your messaging right now isn’t landing, which that might happen to people. They might need to change it up to show why their product or service is needed and is going to help that person or business. I think what’s going through some people’s heads is being scared just to go out there and sell.

Steve: Yeah.

Nathan: But then also not only that, but really kind of thinking… because people are getting angry. Because people remember who was there for them during this time, and who actually did care, versus… but then you have to worry about getting your own business and house in order. It’s very tricky.

Steve: Yeah. Good point. Look, I think that now more than ever, it’s important, and this during any times of crisis is what’s helped me in my history as well. But going back to our purpose, which is why are we actually in business? Because events like this actually shape the reason why a lot of us are in business. And a lot of us are in business to help people. And I love working with Foundr because you’re there to help people. All of my businesses that I operate are actually there to help people, and this is a great opportunity to say, “Well, how we’re going to help people with what our product or service is?”

So there’s nothing wrong with selling. Every business and every person sells something. As long as we’re selling it in the right way, which is trying to help people, and by delivering on our promises and giving people value for money, we need to be more out there and aggressive with sales than ever. Because if we just decide to sit on our hands and wait for things to change, we could be too late. And unfortunately I think there’s going to be a lot of businesses that aren’t going to make it through this, because they’re not going to have the hustle, they’re not going to have the sales because they’re not going to have the activity.

So now is more important than ever. Be in contact, whether it’s phone, whether it’s email, whether it’s video calls, being in front of our customers now is so critical because they’ll remember us and they’ll be there with us. But if we forget about them now, they’re going to go somewhere else. So we need to make sure that we’re in front of them and helping them with what their challenges are, and talking to them. Some of the business that I’ve worked with in the last week have done. So I’ve actually reached out and talked to 10 customers to understand what’s going on? How does this affect your industry? Does this affect your business? How can I help you?

Now a lot of businesses are probably learning now, they should have been doing this months ago, which is actually out talking with people, or emailing people, or on the phone. But now they have to do it. If we don’t understand our customers’ mindset, if we don’t understand what their pain points are and how to help them, we could go out of business.

Nathan: Yeah. So talk to me around mindset, because I know it’s something you’re really big, on myself too, and I think there’s a really big trap around your own bias. Like I was sharing with you just before offline, on a Saturday, I don’t really pay much attention to the media and the news, and on the Saturday I went deep. And it absolutely just fucked with my head, and I went into panic mode, and I was like, “Oh my God,” and I just realised what it was doing to my mind, so I think you can be really optimistic and have your head in the sand, not paying attention, and I like you said, thinking everything is going to be okay, or you can be in panic mode and I think it’s got to be somewhere in between around controlling the controllables, but what should people be thinking about when it comes to mindset and getting their head right? Because it’s all about those decisions you make.

Steve: So look, I think it’s more important than ever to actually have some real certainty within the business, within the teams we lead. So there are huge pressures for a lot of us at the moment, trying to keep businesses alive and survive, those who are going through tough times, or actually try to keep up with demand for those that are actually going through some better times. What I found a lot of business owners and they’re in a state of fear at the moment. And the state of fear is completely understandable. And if we had no fear whatsoever, there’s probably something wrong with us.

But the best thing we can do for ourselves and our business is get some certainty. It’s uncertain what’s going to happen in the world, but within your four walls of your business, within your community, let’s get some certainty, which to me is, what does success look like over the next 30 days? What are the key decisions we need to make? Maybe we need to go and do some more sales activity. Maybe we need to pivot our product. One of my businesses relies heavily on face-to-face training.

Even a lot of my consulting is face-to-face, so it’s about doing more on video, or doing more over the phone and doing it a different way. So we’re going to think about our product and pivoting it, and we’ve got to think about how do we actually keep our team knowing that we’re going to get through this? So I found a lot of business owners really struggle. The businesses that are suffering at the moment, should I be honest with my team? Do I sort of pull the curtain shut and just close my door? And my advice is not that at all. I think we’ve got to be straight up and honest and say, “You what, team? We haven’t faced something like this since our generation. 80 years ago, World War II was probably the last time that the world was in a state it is now.”

So it’s even more important than ever to be honest with our team, but to say, “This is the way forward. This is how you can help us. This is how we’re going to get back.” And a lot of businesses that I’ve been in, whether it’s in person, or even virtual last week, I’m seeing founders crush it out with their teams, more discipline than ever before, more work ethic than ever before, because actually right now, they know that failure is not an option.

So I think by actually going and saying, “How are we’re going to get this right? What levers do I need to push or pull? Keeping it to two or three, that’s going to get things going.” Also for me, I’m looking at the news once a day. If you’re just on your phone back and forth all the time, listening to all the bad news in the world, it will affect your state. So try and get rid of that shit. Leave it to the end of the day. I was just sharing with you offline. I look at it once a day, 6:00, 7:00 PM, once I’m done, and before I start working for the night shift, and just try and stay away from that stuff and worry about what you can control. Try and not worry about what you can’t control, but go all in. 10 out of 10 work ethic on what you can control.

I said this to a group of founders yesterday: right now, if you’re not working 15+ hours a day, if you’re in an area that has opportunity and the business has opportunity, and you’re not working that time to really seize the opportunity, or if you’re in a business that’s suffering that could die, you got to be going all in. Relentless discipline day after day, every day, you got to get in with you and your team and that’ll get you through it. Putting your head in the sand is going to get you nowhere.

Nathan: My next question is around kind of a lot of people working from home, or they’re sending their teams home and everyone’s working remotely now like the Foundr team. Thankfully, Charlie is in and is able to shoot right now, but yeah, look, he’s made that sacrifice and I’m truly grateful for that so we can put out this content for the community, but a lot of people sent their team home, working remotely. What should people be doing there, especially around trust, that might be a new thing for people, especially around accountability, especially around leadership and actually getting things done? What-

Steve: So, I think this is a great example, where you have to have more discipline and alignment than you had in the past. Because you may not, if you’ve decided to have some people working at home, have the opportunity to do a stand-up meeting. But there’s no reason we can’t be doing that virtually, so connection is more important. We don’t want to leave people who are on their own, away from their leaders and away from their team. A lot of people do their best work and get energy from connection to their team. So I think more important than ever, I would be looking at some sort of daily contact.

Nathan: Yep.

Steve: So if you’re running a small team, say less than eight people, some sort of daily contact. It might be a quick online meeting for 15 minutes, or it might be a phone call if your staff a remote. But something to keep everyone there every day. The daily huddle type of format. In terms of alignment and accountability, ideally each person has an understanding about, well, what do they need to do to help the business move forward?

Nathan: Yeah.

Steve: So more than ever, what are those key three or four things that each person can do to really move the business forward during this tough time? So I love the idea of having a dashboard. What are those key KPIs, key tasks everyone dialling in a video meeting and doing that once per week? I talked to you at Foundr and a lot of other businesses about this, but I love this concept of relentless discipline. Relentless discipline is what moves businesses forward and gets them through difficult times. So get your team together, 30 minutes, 60 minutes once a week, talk about those key priorities on how to move the business forward, and that’s what’s going to help the alignment.

I do think you have to have more trust that what people might have had before, but let’s try and not micromanage people. Let’s go and say, “Here are our goals over the next week. If you can get this done, this will really help us either improve on our situation, or seize the opportunities available for us today. But have a regular discipline. A regular rhythm. There’s daily or weekly, but don’t have it less than weekly.

Nathan: Yeah. So like right now, we’re just doing 15-minute daily huddle: what have you worked on between now and last meeting? What are you working on between now and next? And do you have any blockers?

Steve: Yeah, great. So just short and sharp, right?

Nathan: Yeah.

Steve: Short and sharp, but keeping it regular, then you’re getting some contact, and the idea is that just as a team, you go, “What are the critical things we need to solve?” And then you as the CEO of the business, you can catch up with people individually afterwards.

Nathan: Yeah.

Steve: I also think that there is going to be a real trap with people working remotely, and they’re just going to be emailing everyone every day. And so I think that can really lose personal connection. And if I look at a lot of the challenges where I’ve had business partners that have gone into conflict, or senior teams that are not doing well, the reason is because they actually stopped talking to each other.

So if there’s one thing I can highlight from that, stay away from the email. Email is a great follow-up tool, it’s a pretty shitty communication tool.

Nathan: Yeah.

Steve: But actually, speak to people on the phone, speak to people via video meeting, you’re going to be able to accomplish it so much better. Stay away from email.

Nathan: Yeah, so one thing I think I’m going to do, because yeah, in some ways we were kind of trained for this at Foundr, because we had to work from home Thursdays, and… yeah, well that’s a whole another story, but anyways, we do the 15 minutes without thinking, “I’m feeling a little bit kind of that disconnection myself as well,” and I was thinking after the 15-minute daily standup, it’s usually about 11:55, we can just come in to lunch, and if anyone wants to stay on they can just hang out. So I agree that they’re going to kind of tweak that piece there, because I think that’s important.

Steve: One of the other things that I’m pretty sure you’ve got at Foundr, is the virtual coffee, or the virtual catch-up. So maybe you could look at… because I know how many people get energy from their teams.

Nathan: Yeah.

Steve: And if you go and put them on their own in front of a computer, they might not be doing their best work. So maybe think about, is there a rhythm or a structure? So to me, rather, than you going and mandating and saying, “This is what you’ll do?” Next time you’re on a huddle with your team, ask them and say, “You know what, team? I’m not sure that we’re going to be able to wok at our best, because we’re so used to joking around and having fun together. What could we do? What’s something we can do today? What’s something we can do this week to get that communication flying, and actually to still have some fun together?”

I don’t know. Maybe people are into video games, or there’s something cool that they could have as a challenge with online video, or something like that.

Nathan: Yeah, that’s a cool idea. I like that one. Let’s talk about cash-in-bank, cash-flow reserves. In times like these, how much should you prepare for? Because right now it’s the 20th of March, so depending on when people are listening to this, you kind of see what kind of stage we’re at with all this virus stuff. So it kind of really hit the fan I’d say a week ago, right?

Steve: Yeah, I reckon last Friday, in Australia anyway.

Nathan: Yeah.

Steve: I reckon last Friday, they cancelled a few very large public events, and that’s where I think the world changed for people living here. I know overseas, it might have been before then. Every country has been a bit different.

Nathan: Yeah. So we’re about a week in, give or take, I know people might have been experiencing it a little bit a week before, but yeah. So for us it’s online, so it kind of varies. But yeah, so in the Western world for us yeah, I think predominantly it was last Friday. So it’s been a week in, I know a lot of people are trying to prepare for winter, because I think it’s going to get much worse before it gets better.

So let’s talk about cash-flow reserves. What should people be thinking about during times like this? What kind of goals should they have? Is it three months? Is it six months? Is three months operating expenses? What are your-

Steve: Yeah, good question. I think it’s a really difficult question, but I’ll give you some thoughts on it. I mean most people talk about three months of operating expenses, which is, if you switched off revenue tomorrow… so if you’re a product business and you switched off revenue, you’re not paying cost of goods sold. You’re not going and buying more inventory. You’re not buying more raw materials. But what are actual operating expenses?

Nathan: Yeah.

Steve: So let’s say you’ve got a business, it’s a million-dollar business, and you’ve got operating expenses of $200,000 a year, or something like that. About 16 grand a month.

Nathan: Yep.

Steve: To me I’d be trying to have 50 grand in the bank as a minimum. Now not every business is going to be at that point. A lot of businesses that have previously gone through a high-growth point, and as businesses get bigger, it’s very hard to have that amount of cash flow reserves once you get about five million, 10 million, 50 million, 100 million, just because the amount of cash that you have to have. So they might have debt facilities, or loan facilities of lines of credit, or similar. So ideally three months but to be honest cash is king.

In this current environment, the more cash that you’ve got in the bank, the more opportunities that you’ve got to either survive. If you’re in a really difficult industry right now that’s getting hammered, that’s going to give you more runway, it’s going to give you more opportunities to live and to continue fighting. If you’re in an industry that’s going well, it means you can continue to invest in growth. Invest in marketing, you can have your sales teams. You can actually look at how to actually continue to grow.

So to be honest, cash is king right now. Different governments around the world have done different things for businesses as well, and I know that there’s some loans available, there’s some tax relief. So I’d encourage you to go to a reputable source in your country and go, “What’s available to us as business owners?” Because whilst I think most governments are too slow to react, and they don’t really think about small businesses enough, there are some things available.

But cash is king right now. So the number one thing that I’ve said to businesses that I’ve worked with, that are generally on the larger side is: every dollar of expense that we save is a dollar towards break even If they’re not doing well or a dollar in profit and a dollar in cash. So if you literally think about every single dollar that you go and spend right now is the difference of a dollar cash in the bank. So I know at Foundr and many other businesses I’ve worked with them to try and say, “Where are we spending money that is nice to have, but we don’t have to have?”

And I think the needs versus wants is the most critical thing a business owner can do right now. What do you need to have? If you’re a product business, you need stock to sell. You need to be able to market to customers. You probably need some team members, or you need an ability to communicate with customers. But what are the luxuries? What are the things you can live without? So I’m all-in for investing in sales and growth, provided that customers are buying and continue to buy, but think about how can we do that a bit smaller? What the fact that we can trim out in the business?

What are the discretionary expenses, and how do we tighten up? Now every business will be affected by this differently, and most businesses would always do better by thinking about what should they spend versus what’s a luxury, but I think it’s going to help them now.

Nathan: Yeah. Look, I have a question that… just kind of come to me around that piece, and it’s like, sometimes when… and this is unfortunately going to happen to many businesses. It’s terrible, and then some people are going to get sick. It’s really bad. I really feel for people, but sometimes, you hear these stories of people where they’re in this situation where their business is going under, right?

Steve: Yeah.

Nathan: And things aren’t good, but they tip more cash in, or they go get a loan from the bank, or they go raise some capital from outside-

Steve: Friends and family.

Nathan: Friends and family or whatever, right? And it’s kind of good money after bad.

Steve: Yeah.

Nathan: So what do people do there? How do you know when to let go?

Steve: Yeah, it’s a really hard question, but a great question. Look, I think you’ve got to have a view which is, what can you control, and what can’t you control? There’s a lot of businesses now that are doing it tough, but I also know that there’s business owners and founders that are working harder than before to go, “What does my customer need?”

So I want us to go really deep and say, “Who is our ideal customer? Who have we been serving?” So maybe for example now, our current product or service isn’t right. But consumers have gone crazy for silly items like toilet paper. So how do we become and sell the toilet paper example in our industry? The best way to do that is to understand who our customers are, so speak to them. Everyone loves to email their customers, but they never get a true window into how their customers are feeling. So speak to them. Ring them up. Ask them how they’re going. Ask them what they need. If you can solve their problems now, you’ll have a relationship with them for the rest of their life.

But you’ve got to go really deep on understanding your customers and what they need, and how you can help them through it. Good money after bad is really tough. I think it depends on how long this is going to last. But my view is still very optimistic in terms of the world. I don’t believe this is going to be like this for the rest of our lives. They’re like, “It’s winter.” But after winter comes spring and summer. So I have a view which is, you’ve got to gut it out. If we have to cut it out for the next six months, if our revenues shed and we’ve got to work it through, we’ve got to survive at all costs for those businesses that are in hard industries.

You got to push forward, you got to work harder than you’ve ever worked before, you’ve got to pivot your product but you’re going to stay alive and you’re going to do the greatest good for the greatest number. So I talked a lot about this in the last week, which is Triage, and Triage was from my emergency services background, and what it means is greatest good for greatest number. So you might not be able to save every employee in the business even though you try really hard.

You might not be able to save every contractor. You might even be able to save every client, but doing the best you can for as long as you can with as many people as you can, that’s the only thing you can do. You want to get through the other side of this going, “I did everything that I could. I left nothing on the table. Everything that I could have done, I would have done.”

If you go and truly fall at the end of this after giving everything 100%, no one else could have done any better.

Nathan: Yeah, no, really inspirational. I think times like this, I know you’re working around the clock. You said you’re super tired. What about balance though, man? You looking after yourself?

Steve: So look, I mean, I’ve got pretty strong views about this is the best of times. So growing my business from one person to 150 people, I would have worked really hard. And I don’t really know how many hours I worked. I just worked for as long as it took for as much as it took.

Nathan: Yeah. Me too.

Steve: And you do exactly the same. Out of all the business I work with, you’d be in the top couple of hardest-working people that I’ve worked with, right? And it’s an honour because you’re always gutting it and getting it done. So I talk about relentless discipline, and relentless discipline means doing whatever it takes, over and over, day in day out, week in week out. That’s what helps companies grow and be successful. It’s what helps Foundr grow. It’s also what helps get you through the tough times.

So I feel now more than ever, if you’re not… Yesterday as an example, I reckon I went to bed at 2:30 AM I was up at 6:00 AM and you know what? I’ve probably done that for five days this week, helping businesses that I work with, my own businesses, and making sure that everyone’s got support. I know you and I were texting between 12:30 AM and 1:30 AM last night. Whatever was happening three months ago when business was nice and stable, sure. But right now, you’re going to get all in. So the four-hour workweek is probably not the strategy for founders at the moment.

Nathan: Yeah.

Steve: Right? It’s probably the 20-hour work day, or something like that at the moment. How do we gut in, how do we lead our teams through it? I want your teams at the moment to see that you’re going all in, you’re taking the advantage of the opportunities that are there, or you’re doing whatever it’s taking to seize the opportunity that’s there, to businesses going backwards. But yeah, you got to work harder than ever.

Nathan: So let’s talk about leadership, because that’s one thing I’ve learned a lot about from you. To be honest, and I’ve never told you this. I’ve never thought in the early days of founder, that leadership mattered, or was important. And over time, I’ve just begun to realise it’s just everything, because you can’t grow your company to a certain stage unless you have a team and incredible people around you. And then the reflection of that company’s growth, a majority of it is from the team, right? What is the mindset, or what should people be doing as a really great leader during these difficult times?

Steve: So I think a couple of things come to mind, and I think these things at difficult times, they’re just a magnification of what you should be doing during normal times. But the first one is I think you’ve got to be transparent with your team. Don’t bullshit them and tell them everything’s great if it’s not. Go and tell them that, “We’re dying,” if we’re not, just be honest and say, “This is where we’re up to.” Give them some certainty.

If you’re a leader, you have a responsibility to your team to talk to them about what the key priorities are in the next 30 or 90 days. So don’t get them… try and avoid them be stressed about things we can’t control, and just go, “What can we do today to move the business forward? How many calls can we make? How many people can we do a video call with? How many emails can I send? How do we pivot our product?”

We need to be clearer than ever around like the top three priorities for the next even days. Because people want leadership if your team are coming in the office not knowing what’s going on, not knowing what we’re doing about it, not knowing about the business, they’re probably looking at news around the world and going, “This could be really bad.” They’re then fearful about their roles, they’re then fearful when talking to customers. They’re fearful around the team, and that fear is going to propagate.

I’m not saying go out tell and them that it’s all roses, but be honest with them and say, “This is how you can help us with this, at this point in time. These are the things that I need from you.”

One of the things I always talked about is courage. I think courage is something that’s not spoken about in leadership circles, and for me, it’s generally talking about it in military and emergency services, but the reason I love to talk about courage is as a leader, you’ve got to have the courage to move the business forward. The courage to make difficult decisions. And right now, I think leaders need to be extremely decisive. As much as I love a consultative management style, and I love asking people for opinions, my fire brigade experience tells me when things are burning down, you’ve got to make decisive quick decisions.

My favourite quote around this is the George Patton quote. It says, “A good plan executed violently now is better than the perfect plan next week.” So let’s work out those key priorities, let’s align our team, let’s tell them how it is: not better or not worse and let’s go and execute on those priorities violently. Doing that and having the courage to follow it through, the relentless discipline to do what needs to be done that’s what’s going to see as through.

Nathan: So you talk about certainty and control the controllables and modelling. What work should people be doing there around costs and everything that’s happening?

Steve: So I think right now, it’s more important than ever to understand what our numbers are. So if you’re in an industry right now, or a business that’s going backwards, and revenues come back up a bit, more than ever you need to understand: well, what’s my real state of play? What’s my breakeven in the business? And actually model it out. So I’ve done a lot of sessions with business owners in this last week, saying, “Let’s say we’ve got a business that does $50,000 a month.”

Nathan: Yeah.

Steve: And there’s three people in that business. What about if sales come back 20%, and they’re in an industry that could come back. What if they come back 50%? What are the decisions? Now most people just look at me like, “Why would we want to think about that? That’s worst-case.” I’m not trying to say that worst case will happen, but I’m trying to get a plan. So each of those founders, I’ve sat down with them and their team, and I’ve said, “Show me the model and how the business will survive 50% less. Show me what you would have to do.” And they plot out the numbers, they look at their revenue, they look at their expenses and then they say, “This is our negative result.”

And then I say, “Well what decision would you have to make? If we’re back here in a week and we’re 50% less in revenue, what decisions are you going to make?” And most people would really find that very difficult. But I say to them, “Look if you actually know the decisions you’re going to make, if you actually list down those decisions and you have a scenario that says, “You know what? I can survive. If we’re about 10%, this is what I do. I bring in these three costs, and I might remove one person. If we come back 50%, this is what I would do. If I come back 70%, what would I do?”

To actually have something, your sort of scenario-planning that says, “If this, do this, and we know we’ll get through it,” that’s what’s going to help you. So I’ve had a lot of founders that have used that and they’ve felt a sense of freedom. I’ve even had a fonder that’s gone through some really difficult times this week, and he said, “Steve, I actually now feel that I know what to do.” So if the world comes back and he’s 50% less in revenue, he’s 70% less in revenue, he actually knows what can be done. So I think certainty comes from knowing what actions were going to take.

Nathan: Yeah. I love that, man. What about for your team and planning, if they get sick, right? They get the coronavirus, they have to be out for a couple of weeks. What should people be doing there in terms of contingency?

Steve: I think this is a really good question. I’m going to use the example of what we did it at Foundr.

Nathan: Yep.

Steve: So one of the things that we did at Foundr, last week… actually, it was earlier this week. This feels like last week, it’s been a big week, is we actually talked about if a key member of the team is off sick, who’s the person that can take on that role. So we developed some documents which says here’s the one pager. So if the head of marketing is off for two weeks, who’s the 2ic? Who is the second in charge that’s going to step in? If you were off for two weeks, who’s going to step into the CEO role at Foundr? And I think from that, we have a good contingency around, again, creating some certainty. If this person is off, this is what I’m going to do.

I think that’s in terms of the business side. In terms of actually helping our team, my view is that when people are in their darkest hours, we have to do whatever it takes to help them. Support them, be there for them. As a leader, show that we care and help them through this. Because they’ve got enough challenges. If they’re going to get sick, we need to make sure we’re there for them. And people will never forget that. Your team will never forget how you treated them when they go through their bad situations.

Nathan: Yeah. And when we talk about costs and stuff and controlling the controllables, I know some friends are trying to kind of ask for rental assistance, or kind of delay bills and all sorts of things. Thoughts there?

Steve: Yeah, so number one is understanding that current situation and have a bit of a cash flow projection.

Nathan: Yep.

Steve: I’m not talking months, I’m talking about 30 days and 90 days. What does our cash in the bank look like? But this is a good example of courage. I mean great businesses have always been trying to get the best deal for themselves, for the years and months before. But now if your business is going backwards, you don’t have a choice. The ability for you to go and get your costs right and negotiate hard and go at all depending on the situation, actually go and say, “Look Mr. and Mrs. Supplier, this is where we’re up to. I’d really love some support at this time to be able to get us through so we can keep buying from you, because I really appreciate our partnership and I want to continue.”

So ask the question and put yourself in the shoes of the supplier and go, how could you actually make this a good deal for them? If your business is growing right now, if your business… and there are some industries right now that we talked about before our interview here, there’s some industries that are growing more than usual. If you’re in the food business, or if you’re in some of the technology sectors around information technology, support or communications, you’re probably doing pretty well right now. So this could be an opportunity to leverage down to say, “We’re going to go and buy more. What sort of deal can you do for us?”

But if you don’t ask, you don’t get. So I want you to really think about every dollar. Every dollar that you save is a dollar in cash. Every dollar in cash gives you more life. It gives you more opportunity. Gives you more time to be able to pivot the business. So let’s really knuckle down and look at what those costs are. I always talk to businesses about, I should be able to ask you right now at Foundr, and say, “Nathan, what are the top 10 costs in the business, line-by-line in the profit and loss statement?” And you know what? You’d know it.

Nathan: 110%.

Steve: But most business owners won’t. And if most founders don’t know that, then there’s something wrong. So let’s get a gut check and understand: what are we really spending money on? What’s the state of play around our financials and all those top 10 costs, how can we negotiate harder? How can we reduce some of those costs? And how can we make sure we’re giving ourselves all those scenarios, to say if we’re down by 30%, these are the costs I’m going to go after. But it’s a tough, mate. It’s really difficult for people to do this.

A lot of founders find it difficult to actually ask these tough questions. But just know, the future of your business depends on it. If there’s ever a time to have courage, if there’s ever a time to know that you’ve got to ask these hard questions, you’ve got to do it for you and your team, now it’s the time.

Nathan: Yeah. We’re towards wrapping up question, some people watching this might be just about to launch something, or they’ve been working on something, or haven’t launched yet or they’re thinking about starting a business. What is your honest thoughts, if it’s the right time or not?

Steve: Look, I have a view that it depends on the product in the market, but there’s always opportunities. I mean it’d be good time to launch a toilet paper business right now, right?

Nathan: Yeah.

Steve: But just think about: where are the opportunities now? So if you go back to all who is my client? What problems do they have? What problems do I help them with? If we can still help those problems and those problems are still relevant today, then I think it’s a great time to launch a business. The only advice that I would have is maybe bring back your growth projections a little bit. It’s going to be harder to sell products and services that aren’t solving specific and important problems for people right now. So if you thought you were going to grow 100% this year, maybe you still will grow a 100%, and maybe that’s completely possible. But let’s make sure that we have our costs on. If we only grow by 30% or 50%, that we model our cost the same way.

But I’m still investing in sales and marketing in the businesses that I work with. I think it’s important because most businesses going in tough times will sell their way out of this. Costs will help a bit, but revenue in the door is going to be the biggest lever. So I think it’s a great time to start a business, but if you cannot answer: who is my ideal customer? What is the problem that they have? This is how I solve it and help them, then I would say if you don’t know that, then I wouldn’t start on to the business.

But if you can get that and get some clarity on it, this could be an amazing opportunity for you.

Nathan: Yeah, I love it. Talk to me about recurring revenue. That’s one thing I’m really big on, and I think during times this, it matters more than ever. Subscription revenue, recurring revenue. Would it be wise for people to launch a product, but they align a product that has recurring revenue or service? What are your thoughts there? What’s your take?

Steve: Look, I think any ongoing revenue, whether it’s recurring revenue or subscription revenue, or anything else which is regular is going to be really powerful. That doesn’t mean that if things get worse, that it’s just easy street. People who cut up their credit card and say, “I’ve got all these debits coming off, I’m just going to get rid of it, but if we’ve got something that solves problems for customers, that recurring revenue gives us a lot less problems.

So some of the businesses that I work with right now have really strong recurring revenue streams. They might lose a little bit more, have a bit more churn than usual, but they’ve got strength. They’ve got more certainty. They can look out three months from now and say, “This is likely what our revenue is going to be.” Not all recurring revenue is created equal. Recurring revenue that is always one-year contracts, that people have to come back and reassign is not necessary created the same, as a monthly or weekly direct debit. But think about how you can pivot your business, your product or service into some sort of recurring revenue subscription or something that people are going to keep buying.

But give them incentive to do so. Lots of businesses go and say, “Here, subscribe to my product,” but they actually don’t give any real reason. So what’s the reason? What’s the benefit? How are you going to reward your loyal subscribers, or your loyal customers? To go back on something I said earlier, I find it really frustrating, even in good times, where businesses don’t pay enough attention to their existing clients. I think it’s a real failure of a lot of founders out there.

They’re always chasing the new shiny object. They’re always looking at new clients, and they’re not paying enough attention to existing clients. Right now, existing clients, deepening your relationship with them, communicating with them, understanding their problems in helping them, that’s what’s going to get most businesses through. So recurring revenue product, understand our customers, and keep at it.

Nathan: So Steve, it’s getting late, we have to work towards wrapping up. A couple last questions. One, if a client… if someone called you tomorrow and you’ve never met them before and they said, “I don’t know what to do. I’m really lost.” What would you say to them?

Steve: So I think first of all, my message is to founders, to say, “You know what? You got to where you are today. You know a bit about what you’re doing. So I want you to connect with, what was your vision? Why? Why did you start this business in the first place? What was the impact you wanted to have on the world?” And then I actually want to talk about courage. I want to talk about survival. Businesses that are doing it really tough, I want to say, “You’ve got this, but how are we going to get through? Let’s forget all the noise around the world, let’s forget all the bullshit out there and just say, what are the three things I can control today? I can control what my team are working on. I can control how many customers I speak to. I can control how I spend my time, and the amount of time that I spend.”

So I want to reassure founders out there, that if they continue to obsess about their customers’ problems and helping their customers, if they go all in, if they can look back in three months and go, “I worked the hardest three months in my life. I’ve done whatever it took for as long as it took,” that’s what they need to be doing.

It’s really uncertain times out there. I don’t want everyone distracted on the news. I don’t want everyone listening to all the crap. I want people going all in knowing, “I know that I got this.” You’re a smart person who got you to where you are today. You’ve done a lot of great things. It just means right now, there’s a few more roadblocks. But you got to have the courage to push through. The courage to continue, knowing that you still be able to achieve your vision. After winter, spring and summer come. This could be the greatest opportunity, after all this has happened. So survive it, gut in, do whatever you need to do to get it done, and let’s come out the other side.

Nathan: Last question. Look, this was really amazing, super valuable. I know anyone that’s listening, wherever they’re at with their business, they’re going to get a tonne of value, so thank you for taking the time, Steve. Where’s the best place people can find out more about yourself and your work? I know you have a little message to people, just… yeah, what would you like to say?

Steve: Yeah, no worries. So as you know, I’m pretty busy with a lot of business owners, and I’m not looking for any more clients or anything like that. So what I thought I would do is, recently, I’ve decided during these events just to give my book away for free. So I think tough times needs courage. So my website, courageforprofit.com has-

Nathan: Yeah, and you got a copy of the book here?

Steve: I’ve got a copy of the book, which is just… it’s there as a free resource for people. I don’t want any clients or business. It’s there to help people. It talks about what I had to… some of the horror stories that I worked with about five years ago in my business. I hope it’s something that gives a guide to your community and something that helps them during a difficult time. So it’s just there to try and give back to the Foundr community and to help you guys.

Nathan: Awesome. Thank you so much, and look, it’s an incredible book, guys. I’ve read it, Charlie has read it, and it really encapsulates all the principles that you’ve taught us, that it’s really good business practise principles to grow your company, and to build a sustainable company and to build an incredible company, where you can really help a lot of people and you get your product or your service into the hands of many more people so, thank you so much, man.

Steve: No worries. You’re welcome.