Category: 2020

I recently had to face a situation that I had hoped I would never have to face again. In late 2008, after a big expansion at my office and the subsequent crash of the stock market, I found myself with a large payroll, bills to pay and NO CASH. I recall shedding some tears and sharing with my husband that I had no clue what I was going to do. He looked at me with that very unemotional gaze, and calmly responded, “You know exactly what you need to do.” He was right. I knew what I needed to do, but it wasn’t what I wanted to do.

If you have ever been in that situation you understand that very painful feeling of having to do what is right for the business even though that isn’t what you really want to do. Fast forward almost 12 years to today, and unfortunately, while I worked hard to minimize debt and to accumulate a healthy cash flow since that time in 2008, I found myself in the very uncomfortable position of determining what I would have to do in my business if this pandemic lasts much longer. The Corona Virus and consequent shut down of America made me realize I may have to again make some tough business decisions. Since I have been through tough times in business before, I know that the answer was just the same as it was in 2008.

The answer is in the Numbers.

While times are very tough, the only way to monitor and guide a business is by analyzing and monitoring the numbers. You can’t guess how well the business is faring. You will know what you need to do and the decisions you will need to make to keep your business afloat when you dig into the numbers. As a business owner, I have become a numbers fanatic because looking at data is critical for making quick decisions and in this unprecedented time when the world has basically shut down, it is critical to make quick decisions that will insure the long term health of the business.

The first thing to look at is CASH. How much ready cash do you have on hand right now? I’m not talking accounts receivable because you don’t know when you will get that money. Payments may slow down and some insurance companies may delay payments because of a shortage of staff or whatever. I’m not talking about money you may get from loans or possible grants. Don’t count on money you don’t have. Deal with the Facts and that is the cash you have on hand right now.

The second thing to look at is what bills do you have on hand that have to be paid Now. Keep in mind some lenders, credit card companies, landlord, etc are willing to delay payment and give you terms. Try negotiating terms if you can. I would advise not to build up debt on high interest credit cards as those fees can bury you and the business.

After that analysis is completed, how much do you have left in Cash when you pay the bills that you have to pay NOW? What are your Fixed Expenses – expenses that occur each and every month that have to be paid. Examples of these may be utilities, car payments, mortgages or rent (again, try to negotiate terms if you can), insurance payments, etc. Look at the cash you have left after paying bills due now and how much do you have left to pay fixed expenses and determine how many months you can stay afloat.

Employee payroll isn’t a Fixed Expense. It’s a variable cost that is dependent on how long you will be able to cover the cost of employee wages with the cash you have on hand. At some point, you will run out of cash and you will have no choice but to furlough employees or to take a cut in salary yourself or borrow money. While loans and promises of funds from PPP are hope they are not cash in the bank. You have to deal with the facts – cash, bills due, fixed expense, etc.

Most of us, don’t always have a lot of time to really dig into the key financial numbers when we are busy working IN the business. Now is the time to work ON the business. I apologize if this blog is too elementary for some. While I am all about hope and know that we will come out of these times better, as a business owner, I have to deal with the facts and make business decisions based on these facts. These critical decisions are emotional but to maintain a healthy business that will live on into the future, the actions we take today can’t be based solely on emotion, they have to be based upon the financial facts of the business.

With the doors to my business closed, we are seeing some patients via curbside service, but staying home is starting to get really old.  Trying to stay positive so I will look at this “down time” as a perfect time to restructure and rebuild.  I’m focusing on what I CAN do instead of what I CAN’T do.

One of the main things that we can do is connect with patients, prospects, referral sources and the community. People are home and isolated and welcome phone calls as they just want to interact with people. Call patients and connect. See how they are doing and then let them know all the good things that are happening in the business during these tough times. Ask patients how they would like you to communicate with them in the future. Call referral sources and let them know how you continue to help patients during this shut down and remind them of the many services you offer.

People are watching more TV now so this may be a perfect time to run some ads on television or contact the local media and let them know about the innovative ways you are transforming your practice so you can continue to serve people with hearing loss such as remote programming, curb side service, and anything else you may be doing. There is tremendous need for “news” in this world of 24/7 coverage.

In case you haven’t noticed, everyone is talking about hearing aids. There has been a ton of television commercials on OTCs and online groups that mail a person a pair of aids and then offer remote support. I heard an ad this morning for an insurance supplement that includes “hearing coverage”. While none of us have money to run unlimited and ineffective ads, we need to be part of the mix of what viewers are seeing. Try to negotiate better rates with cable and network providers. Here’s a tip – Start the negotiation 1/3 less than you can afford or are willing to pay and ask for their demographics and make sure your ideal patient is included in that demographic.

Get some feedback from your patients. Call ten of your patients and ask them to be on your Advisory Board and then schedule a Zoom meting and invite them to share their opinions about your organization, how the economy may effect patient decisions moving forward, and ask them to share what their friends are saying about your business. Patients love to be asked for their opinion!

Yes, this is a tough time but this shutdown also provides us with the gift of Time. Let’s use it wisely to chart the course of our future.

The last couple of days have been overwhelming. What to do? Should I stay open or close?  Actually, as frantic as “Will I survive this?” I have had my doubts but after a meltdown and some research and some discussions with colleagues I am absolutely convinced, “We will Survive this!”  But the real question for most business owners is “How will I Survive this?”

There is LOTS that business owners can do in these uncertain times to Stay in Business but it won’t happen unless we dig in, investigate what is happening in the business, and Make A Plan!

We Will Survive! But Don’t just Panic. You need a Plan. Whether your doors are Open or Closed, you have to stay connected to  patients.

And… Stay Strong! This, too, shall pass

I have come up with some ideas that may help.

Financial Suggestions

Dig Into Your Numbers

I was panicked until I took the time to really dig in to see how much do I need to survive the next 6-8 weeks and perhaps even 12 weeks? It’s easy to panic when you don’t have any facts. Some things I investigated:

How much do you need to survive? You need to investigate both how much YOU need to survive personally and also how much you need to cover business costs? How much cash do you have on hand? How long will that cash last? How much is due in accounts receivable?  I was panicked until I took the time to really dig in to see how much was needed and how long I could afford to pay employees if I had NO additional money coming in? Can I afford to keep the employees or do I need to lay them off? 

The answer to all these questions is in the numbers.  I would suggest that you keep employees as long as you can as long as it doesn’t threaten the Long Term Health of the Business. Things will come back but if you don’t have the cash, you may need to let employees go on unemployment so you can pay yourself. 

Leverage any and all resources

Survival doesn’t just happen. You have to MAKE it happen and that takes a Plan.  Do you have any untapped resources? Do you have a cash value in an insurance plan? Can you use a credit card to pay monthly bills? You can put the bills on the credit card and you have 30 days to pay it off without interest.  I just signed up for a card that has No Interest for 18 months. Be Careful! You cannot afford to rack up debt on a card that has a high interest rate.  Ask your Landlord for one month’s free rent or at least a 10% reduction. Get rid of ANY unnecessary expenses. Do you have a line of credit with a bank? If not, perhaps it is time to get one. Banks are loaning money at low interest rates right now. Is your accounts receivable up to date? Call the insurance companies that haven’t paid or rebill the invoices that haven’t been paid and send statements if you haven’t done that within 30 days. Keep that cash flowing as long as you can.

Communicate, Communicate, Communicate

Let patients know what is going on in your office and the steps you have taken to protect them or yourself during this pandemic. Communicate via social media and call the patients that don’t have social media. If your doors are open, call your referral sources and let them know you are there for patients.

Now that you have the time, develop a marketing plan that you can apply aggressively when this nightmare is over. Call your patients now and make sure you have a text or email.  And when you contact patients, make notes and set a recall date with specific info on their needs or concerns so when you call them back you remember details from the original call. Let them know you Care. Plan an Upgrade program for all patients that have aids over three years old and promote new technology that would have helped them during the Pandemic, i.e., hearing aid self checks, hearing care at home, fall prevention, activity trackers, etc.

Many people are home. Send out emails to current, previous and TNT patients and let them know what’s happening and what you are doing to stay safe. Send funny videos. This doesn’t take skill and they don’t have to be perfect. Send recipes or great apps that can help keep people occupied and busy while they are at home. Engage. Engage. Engage.

Don’t Give Up.  Fight Like Hell to Survive.

Our patients are loving the Drive Up Clean and Check and the aggressive Telehealth programs we are promoting for patients that don’t require a Face to Face visit. Sycle has a new telehealth option in their software. If you don’t use Sycle, check your software for upgrades and changes.

If you have shut your doors for a short period of time, it’s a great time to reach out to your patients.  If you offer a Service Plan, call patients that don’t have one and advise them that it would be a good idea to Protect Their Investment in these uncertain times and allow patients to purchase it over the phone. If you don’t have a service plan, now is a perfect time to start one. Caution, for these programs to be profitable, you have to be able to do in office repairs and cleanings and don’t purchase the extended coverage from an outside vendor. 

Am I nervous? You bet. Am I uncertain when this will end? Yes! This is unprecedented. Am I afraid for the future? Hell No! People will still need to hear when this crisis ends. In fact, I heard someone say that after being together so closely for so long, people will be flocking to our offices because their spouse is so sick of them always asking them to repeat☺ 

Dig into your numbers, Determine the financial needs of yourself and for your business, Develop a Plan to stay connected to patients, and Stay Positive that We all Will Survive and Come Back Stronger and Use This Time to Recharge and Reinvigorate Yourself and Your Business. Stay Strong and reach out and Try to Help Others as We Are All in This Together. 

I realized when going thru old blogs that while these are unprecedented and very uncertain times, I have experienced many downturns in business over the years.  In fact, just last year, we experienced our worst January in many years because of a polar vortex in Michigan. And now in 2020, we started the year so strong – our best Jan/Feb in the history of the business, and now this?!  What to do?

You do what we as business owners always do when faced with obstacles – we buckle in and get ready to ride it out.

We use the time wisely to prepare for what is sure to be a recovery. We listen to advice from the CDC and are cautious about how we conduct business during these uncertain times. We stay true to our employees and we pay them even if we have to close for a few weeks or have to reduce hours.  Yes, it will be a financial hardship in the short term, but it will pay off in the long term.

And don’t panic.

People don’t stop wanting and needing good hearing healthcare.  There is a constant battle in our minds between positive and negative thoughts, and the more negative things we listen to, the greater our chance of being controlled by negativity. While it is important to know what’s happening in the world, we don’t need to be exposed to 24/7 news coverage to stay informed. Thirty minutes twice a day may be ample to stay in touch.

Reducing expenses is not easy but there is always a way to cut some “fat” out of the budget.  I asked my accountant for a list of every check we wrote last year categorized by the type of expenditure.  It’s amazing how cash can fly out the door when you aren’t paying enough attention.

There have been many times over the course of my thirty plus years in business when everything seemed to be going well, the schedule was full, revenue better than expected and then things ground to a halt.  But there is always lots to do – clean up your database, plan new educational events, investigate your previous marketing activities to see what did and did not work, clean out those cabinets that have stuff you no longer need, update software, analyze your current pricing and see if it needs to be modified. Many times shipping costs increased or cost of goods went up slightly but you didn’t increase prices. Use the time to contact patients you have lost touch with and see why they left or what is going on. Call patients that you know are homebound and make sure they have the resources they need to survive these time. And, when you get all that done, just take a break.

While we are in an awful time in this world, good things can and will happen. Tough times are inevitable in business but be assured, you learn from each one and it’s what you do in these tough times that defines you.  Awful can be followed by Awesome. Stay well. Stay Strong and Take Care of Yourself and Keep Believing that Things Will Get Better.