Benefits / Resources / Articles
April 21, 2020

Navigating Your Business through a Crisis and Understanding the Recession Response with Mike Michalowicz

On April 15, 2020, we were joined by Mike Michalowicz for a special “In It Together” edition of PPAedu Live. Michalowicz spent the hour answering listeners’ questions and talking about one of the biggest challenges we have ever faced as small businesses but also about the unique opportunities in front of us. He shared his model, the business crisis trend, as well tips and strategies that can be implemented immediately to keep your business moving forward. 

 

As Michalowicz puts it, it's crucial as a small business owner to continue focusing on your business during this time—even if that looks different now than it did a month ago. We have a quick recap of the session below, and you can replay the full video at your own convenience here. This video will remain on our Facebook page for 4 weeks. After that, it will be moved to our online education platform at PPA.com/Education.

The Business Crisis Trend 

This model outlines how businesses of all sizes respond to a crisis or recession as well as where the opportunities exist. There are 5 significant stages to this model:

  1. Shock. Everything comes to a halt. People responding to loss or trauma may first react with disbelief or denial as a coping mechanism to protect themselves emotionally from the pain of the experience. When a business experiences a trauma or crisis, like a recession, many may have a similar reaction. Denial and disbelief can lead to inaction on the part of the business, which can quickly lead to collapse. 
  2. Desperation. This is the stage when businesses may start to respond to the crisis, but many take massive, uncalculated action without preparation to try and survive. This can lead to the stampede effect—just look at how people recently began hoarding toilet paper! For many businesses, there is currently a stampede effect with government loan programs. You may have already applied for these programs for your business, and although Michalowicz is not arguing against taking out loans, he cautions his listeners to be careful, considerate, and deliberate in their decision to seek out loans. 
  3. Evaluation. If you can get to this stage in the Business Crisis Trend, you and your business are now moving back in the direction of business continuance and success. In the evaluation phase, a business is able to carefully consider options and evaluate their situation. This evaluation phase then leads to the next stage of the model: deliberate action.
  4. Deliberate Action. According to Michalowicz, if a business can get to this fourth stage of the model, they have positioned themselves to successfully continue through the crisis and be successful... potentially even more successful than before the crisis! How? The fifth stage of this model explains it.
  5. Burst/Surge. During every crisis and recession there will be companies that go out of business. Once the crisis has ended, the decrease in competition can lead to a boom in business for those businesses that are still operating after the crisis is over. By staying focused and smart with your actions during difficult times, you may end up with a surge in business on the other side of a recession due to sustained demand for your services along with a decrease in your competition. Businesses that manage to navigate through uncertain times can also be the most successful once a crisis is over!

Key Points to Remember:

 

Opportunity vs. Opportunistic

One of Michalowicz’s first main points is to clarify the difference between opportunity and being opportunistic. Opportunity is when you serve someone who has a need; in this case, it may be a new need that you serve in a new way. On the other hand, being opportunistic means taking advantage of someone else’s disadvantage. Michalowicz emphasizes that this is our opportunity (and our responsibility) to stand up and continue to market, sell, and serve our communities and our clients in new ways.

 

Marketing vs. Retention

Some clients will use crisis situations to abandon their vendors. This could be because they aren't happy (or for other miscellaneous reasons). Instead of focusing on saving these clients, it may be better to focus on gaining new customers.. Why? Those probably weren’t the clients you enjoyed working, but remember: you aren’t the only one who lost clients! The clients that abandoned other vendors are now looking for someone new. This is an opportunity to position yourself to capture these new customers. 

 

Build your “Know, Like, and Trust” Components

Consider taking this time not spent behind the camera to create and offer educational resources and components. By positioning yourself as an expert in your field, you can build on your "know, like, and trust” components. This could mean resources for clients (i.e. content about how to hire the right photographer, DIY photography activities for children, or a guide for families to capture moments at home) or how-to videos for other photographers on things like technical skills, workflow, editing, or social media management. One way to brainstorm ideas for educational opportunities is to use the One Step Back Method. Look at the final offerings (packages and services) currently available to your clients. By breaking these offers down, you may find that they are made up of a number of smaller deliverables that you could still offer your clients as “new” services. 

 

Example: 

  • Final Product = Photoshoot 
  • Consider the steps that go into creating the final product. What about the time you spend setting the stage/scenery/lighting for the shoot?
  • Think about how many people are doing video presentations and classes, virtual meetings, and live sessions on social media that have never done so in the past? Why not put together an educational tutorial or offering on “How to light yourself for video”, or “How to properly set up your space, background, and set-up to optimize online presentations”
  • New Deliverable = Educational Content that can be offered remotely!

 

Don’t Minimize your Worth

Discounting pricing is a common strategy during times of crisis and recession. If done in a considerate way, this could be a viable option for your business, but it can also be risky. By lowering pricing or selling discounted packages to be used at a later date, you are playing a "money game" that gives momentary relief in exchange for long-term action. You may get short-term relief, but you will then be spending time after the crisis playing catch up with discounted services during time that could be spent rendering services for full paying clients. Discounting your services decreases your profit margins which could put you out of business. A better option may be to repackage existing services to be able to offer a lower price point or find new ways to service your clients (editing existing images, selling printed products of existing images). 

 

Communicate with Compassion, Care, and Understanding

You should still be communicating with your clients during this time, but you will want to change up your strategy. Instead of communicating less, consider communicating more frequently, but in smaller, bite sized pieces. Be sure that your messages (especially marketing and sales messages) are written with compassion, care, and understanding for your client’s current situation. Try saying things like:
 

  • “We are still here for you and wanted to check in on you and your family. If there is a way we can be of service to you right now, please just let us know.” 
  • “We wanted to reach out to say that we are still here for you during this time. We know you may not need us but, if  you do, we are here to help! Reach out anytime!”

 

Financially, You Matter More Than Your Business

If you find yourself in a position where you have to choose between your financial health and the financial health of the company, you need to put yourself first. Your credit score matters more than the credit score of your business. Why? Anything you want to do in the future, personal or business, will be based on your personal credit score (your “personal guarantee”), which means it is much more valuable than the business’s credit. 


This hour long video is JAM PACKED with tons more tips, actionable items and ideas for you to continue moving forward during this difficult time. Michalowicz ’s advice can help you create revenue streams by offering new products and services- setting your business up to be stronger and more prepared for success when you come out on the other side of this. Watch the full video today!

 

Remember, PPA's online education platform is accessible to any photographer with a free PPA account through the end of May 2020. This is meant to give all of the professionals in our industry an opportunity to focus on continuing their education and strengthening their business during this time.

 

For up to date information on what PPA is doing in response to COVID-19 please visit PPA.com/InItTogether 

JOIN PPA NOW