business strategy

My personal experience of the Coronavirus

I didn’t know what to expect.

Would everyone be walking around in facemasks? Or would the city be a ghost town? What about the supermarkets? Would the shelves be empty?

I had no idea until I arrived in Turin on Monday.

And what did I find?

Everything was normal. Sure, you’d occasionally see someone in a mask. But most people were walking around as normal and the shops had plenty of food.

Now, I could use this lesson to explain why most “crises” are nowhere near as bad as they’re made out to be, but I’ve got a different lesson…

How to disaster-proof your business

I did three things before coming to Turin.

The first thing I did was a risk analysis.

#1: I looked at the infection rate, the mortality rate, and what sorts of people were dying

The reality is that, in Northern Italy, the infection rate is very low. The three regions affected – Lombardy, Venutu and Piemonte are home to 20m people. At the time I left, only around 300 people had been affected.

Of those, around 10 had died. Most of these were very elderly people.

#2: I looked at the direction things were headed

I checked the news every day to see whether infections and deaths were spiraling out of control. They weren’t.

Two people had died in Turin. That number stayed constant for a few days. So it wasn’t increasing – particularly in the Turin area. It seemed the other two regions had the real problems.

#3: I asked, “What would happen if this thing spread out of control?”

I was in the French Riviera. If Turin ended up in lockdown, then Genoa would be in lockdown. If Genoa was in lockdown, so would the Riviera.

(In fact, as I’m writing this, I heard Nice – where I was living in January – has cancelled its Carnival events this weekend.)

And, if the Riviera had high infection rates, it would spread to Paris, London, Berlin…

The whole of Europe would be in trouble. 

So, by going to Turin, I wasn’t taking on much more risk than if I stayed where I was.

So, to sum up: Infections weren’t increasing rapidly

The next thing I did was ask…

If it’s bad, what can I do?

Let’s imagine everyone was wearing masks and the shops were shut. How would I cope?

First, I’m only here for a week. So, if it’s terrible, it’s only terrible for 7 days.

Second, I made sure I brought food down with me on the train. That guaranteed I had something to eat for a couple of days.

Third, if things were bad, I could cut bait after a couple of days and get on a train to Tuscany. It wouldn’t be a big deal. And I could do that in a heartbeat.

And, if there was food, but everything else was closed, I could spend the week writing. 

I’ve just finished writing a book on PPC, but I need to create an email sequence for it. So I could have finished those emails while sitting in my apartment.

Not exactly what I had planned when I came here, but a useful way to make the best of a bad situation.

(BTW, keep an eye on my emails – I’ll be giving away free copies of the book to my subscribers.

Applying these techniques to protect your business

So how can you use the same techniques to keep your business safe?

The first thing is to understand where the risks are to your company’s survival. Are you dependent on one supplier, one product, one customer, one employee, one traffic source?

Marketing expert, Dan Kennedy, put it like this:

“One is a very bad number, anywhere you find it … [for example] if one media produces a disproportionate percentage of your customers…you are subject to being summarily put out of business.” 

So look at your business. Where are you reliant on one thing that’s outside your control?

What about dangers from technology? Is there a way a competitor could provide the same product or service faster, cheaper more conveniently? (Think Blockbuster Video v Netflix.)

Step 2 – Where possible, remove those dependencies

By bringing food to Italy, I removed my dependency on Italian shops.

If you’re dependent on a single marketing channel, start exploring other channels. Start building other marketing systems.

Not only will the be a great way to grow your business and bring in more clients, they’ll give you something to fall back on if your main marketing channel stops working.

Step 3 – Create a plan B

OK, now you have a sense of the risks to your business and how likely they are to happen. Here’s the question: What can you do today to create a contingency plan?

That might mean sourcing a backup supplier so, if your current supplier goes out of business – or raises their prices – you’re not going to be left high-and-dry.

(With China shutting down so many businesses over the virus, this is going to be a big problem for many Western companies.) 

Step 4 – Building a margin of safety in your business

A couple of years ago, I wrote a newsletter about this. You can read it here:

The gist is that, in business, there are good times and bad times. If you build your business to handle the bad times.

The newsletter goes into how to do this. 

Summary

There’s risk in the world. But, by analysing that risk – and coming up with plans to handle worst-case scenarios, you don’t have to live in fear.

All the best,

Steve Gibson