August 17, 2020 I Ask Alan I by Alan Friedman
Four COVID-19 Survival Tips
As if music retailing wasn’t challenging enough, music store owners are now confronting new financial, operational and health safety challenges. As we all try to adjust to a new normal, retailers have needed to quickly implement new strategies to meet a massive shift in shopper behavior and, in some cases, product demand. Many retailers are now scrambling to make their digital sales channels and campaigns more effective while addressing the effects of a temporary shutdown. And, most of all, retailers need to stay extremely sensitive to customers’ needs, fears and hardships. No problem, right?
Don’t think for a nanosecond you’re alone. Our CPA firm has had the same enormity of COVID-19 challenges. As if our rigorous 24/7 tax season schedule wasn’t challenging enough, in mid-March we found ourselves compelled to put down the proverbial pencil to help all of our clients, for free, with applying for emerging government subsidies. And so began our nearly three-month journey learning about the CARES Act and the ever-changing PPP, EIDL, revised unemployment benefits and other government loans and bailouts in our effort to help clients get through and over to the other side of the economic devastation being caused by this pandemic… all on top of the extended pain of three more months of tax season because the tax deadline was moved to July 15
I have rarely been at a loss for suggesting sound financial advice and proven best practices – until the coronavirus.
As one would expect of a CPA firm, most of our music store clients and industry connections reached out to us for recommendations on what adjustments they need to make to their business model. In my 40-plus years of providing business guidance to the music industry, I had rarely been at a loss for suggesting sound financial advice and proven best practices – until the coronavirus hit. Frankly, I’m not sure anyone can honestly claim to be a business expert with years of experience in dealing with the financial effects of a global pandemic. But, that shouldn’t dissuade any of us from sharing meaningful thoughts, ideas and opinions on how to successfully manage our businesses in the hopes of surviving this financial crisis. We are, indeed, all in this together.
With that in mind, I’d like to share just a few ideas that we’ve implemented in our own business that seem to be working to our advantage. While these ideas can’t possibly solve every challenge you’re experiencing, I’m hoping they will at least guide you on what to focus on to assure that your team is safe, happy and motivated to keep revenues up, expenses down and cash flowing.
1. Create a Task Force and Prioritize Matters of Greatest Urgency
Because of the gross uncertainty of when and how this pandemic will end, it is imperative to establish a clear chain of command and rapid response process. This will help ensure swift, decisive action to keep your store operating and revenues flowing. Start by creating a task force of knowledgable leaders within your company and have discussions identifying and prioritizing matters of greatest urgency. Make sure all major functions of your company (sales, purchasing, inventory management, shipping and receiving, accounting and bookkeeping and customer service) are represented in this discussion, with all team members on the same page with the answers to the questions being asked.
This team should establish strategic goals for survival, supported by communication guidelines and regular, planned meetings. Make sure to address who is in command and who is involved in each key retailing function. Immediate decisions should include addressing these 10 vital questions: 1. What should you do to keep your employees safe? 2. Which customers are most likely to be significantly affected by the pandemic? 3. What can you do to help them and keep them safe if/when they visit your store? 4. Which customers are you likely to lose because of this crisis and what can you proactively do to prevent or minimize this? 5. What can you do to replace lost revenue? 6. Should you cancel or postpone income-generating events? 7. Should your employees travel for business? 8. Can employees work remotely? Is this work option available to all employees and, if not, which ones? 9. How will you support employees if their children are kept home from school? 10. What steps will you take if someone becomes ill with COVID-19 at your workplace?
2. Enhance Your Communication
One thing coronavirus has taught us is that nothing is certain. There will be many quick and rapid changes and decisions that will need to be communicated among owners, management, employees and customers alike. A best practice is to huddle at both the beginning and end of every day, adding in any vital communication of the day’s events or emerging issues. Start every meeting with the latest update of what’s going on, what problems need to be solved and what changes need to be made. Try using video conference technology like Zoom, GoToMeeting, Skype, FaceTime and Microsoft Teams to communicate daily with team members at remote locations, and online applications like Constant Contact, your website and social media channels to communicate frequently with your customers.
3. Use Common Sense During Your Work Day
While you’d think everyone would know these common-sense rituals by now, our national reaction to coronavirus tells us otherwise. With that said, everyone who can work from home should. If you need to be in the store, wash your hands frequently with soap and warm water for 20 seconds, maintain 6 feet or more of social distancing and wear a mask. Don’t eat food at your desk, don’t shake hands and no hugs.
4. Maintain a High Degree of Sensitivity
Many people, including our employees, vendors, music teachers, customers and many others in our community and nation, are struggling due to the loss of income, the loss of gainful employment by a key family member, the fear of contracting coronavirus especially for elderly or immune compromised members of our family, and the everyday barrage of disturbing news on top of our nation’s cry to address the plague of centuries-old systemic racism with meaningful change. With all of these real-life events weighing heavily on our minds and in our hearts, it’s now more important than ever to be mindful of and empathetic to those dealing with these issues. Above all else, put the needs and sensitivities of your internal customers — your employees — first. After all, they are the literal lifeblood of your organization.
Again, make sure you communicate to your employees that a response team is in place and evaluating the pandemic’s effect on your store on a daily basis, and that the highest priority is keeping both employees and customers safe. And as much as possible, think ahead so your response team does not have to navigate unforeseen issues in real time with battlefield decisions. It seems not only timely and poignant, but also germane to quote the late Congressman John Lewis: “Do not get lost in a sea of despair. Be hopeful, be optimistic.” MI
Alan Friedman, CPA, provides accounting and financial services to music industry clients. He is a frequent speaker at NAMM U seminars and can be reached at 860-677-9191 or firstname.lastname@example.org. Visit his website, fkco.com.