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This is an article of accounting and finance tactics on how to survive and thrive that our CEO, Matt Garrett shared in a webinar presentation with Vistage. You can view the recorded version of the webinar and the article here as well as on the Vistage website.
When Matt Garrett, CEO and Founder of TGG Accounting, started thinking about how he would lead his team through the COVID-19 crisis, he thought of Antarctic explorer Ernest Shackleton whose story of survival was chronicled in the book “Endurance.”
“What got this team to survive in brutal conditions was process, routine and sense of purpose,” says Garrett. He has adopted a similar strategy, which is this is just one of the insights he shared for surviving and thriving in a recent webinar for Vistage. Here are the seven tactics for thriving that he outlined to help small and midsize businesses power through today’s health and economic crisis.
Business norms are rapidly changing, and this is opening up new opportunities to restructure costs. Garrett recommends going on the defense,reexamining spending in the following categories.
Similarly, consider new models for medical benefits. For example, instead of paying a fixed percentage of your employees’ healthcare premiums, contribute a fixed dollar amount toward premiums and allow employees to choose the health insurance they want. The idea is to define the contribution instead of defining the benefit.
Finally, consider different ways to restructure your 401(k) benefits. Rather than offer, say, a 3% profit-sharing plan, offer a performance-based matching plan. That could mean contributions of $5,000 are matched with $1,000, while contributions of $10,000 are matched with $5,000. “That way, you’re really incentivizing an accountability culture,” says Garrett.
Take a critical eye to your processes in the interest of efficiency. For example, build “cookbook-style” processes into your accounting processes to increase efficiency and accuracy while decreasing your costs. Apply the same logic to your processes for inventory management, project management, purchasing and so on.
“When you really go in and clamp down on your processes, it increases accountability,” says Garrett. “High performers love it, because they love to be efficient and effective. And low performers can’t hide anymore.”
The unemployment pendulum has swung, and now is the time to focus on offense. This is a great opportunity to treat people fairly while demanding respect and fair treatment in return.
This starts with tightening your objective accountability metrics. Manage people based on outcomes instead of subjective metrics. Make sure every person knows the objective of their job, and make sure you hold them accountable to doing that job.
At the same time, get aggressive about hiring top talent away from your competitors. Find the people that can help you build a strong and sustainable business.
Remote working doesn’t have to kill your culture. In fact, it can strengthen it. The key is to create structures that increase communication, increase accountability and take good care of top players.
At TGG Accounting, Garrett focuses on lessons learned in the book “Endurance” about process, routine and purpose. Each morning, at 7:30 a.m., he leads an all-employee meeting via Zoom, and everyone in the company is required to attend via video. Different leaders have stepped up and to lead virtual challenges – like a midday push up challenge – and creating things like virtual happy hours at the end of the day. “We’ve got these new connection points we would have never had if we were working in an office instead working from home,” says Garrett. He’s encouraged employees to stay positive no matter what.
“Don’t let anybody be negative,” he says. “Don’t let them complain. You want positivity, which really creates opportunity for promotion based on performance.”
Invest in technology that automates your processes and/or continually improves them. The idea is to become less dependent on people while increasing your margins. In addition, think about the margins or your products. “If you have different products, work to get better margins for the environment that we’re in now,” says Garrett. Better margins also come from the next tip, negotiating with vendors on decreasing the costs of everything.
Negotiate with your banker on your loan terms. Negotiate with your property owner on your lease. Negotiate with your vendors on pricing. Don’t hesitate to ask for purchasing discounts on bulk purchases or long-term contracts.
“These guys are going to be freaking out,” says Garrett. “Don’t be the one freaking out; be the one who’s aggressive, positive and confident. Go negotiate these terms so that you can get better overall profitability, because that leads to longer-term cash.”
To strengthen your sales, work on a few tasks at once:
Like Shackleton, business owners are facing a harsh winter ahead. Those who stay paralyzed by fear aren’t likely to make it through. But those who take decisive action have a good shot at survival.
After all, Garrett says, someone is going to come out of this crisis on the upside. “Winners win all the time,” he says. “In down markets, in up markets and in every market, winners win.”
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
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