5 Lessons Learned From COVID-19
By Robin Bennett, CPDT-KA
None of us could have predicted the impact COVID-19 would have on our businesses. Stay-at-home orders and canceled events have been great for bonding with our pets, but as a business owner, social distancing has hurt your bottom line. And while we could wallow in self-pity, vent about our losses or how poorly our community, state or government (name the group of your choice) handled things, I think there is a better use of our time.
This is the time to pivot and make changes. This is the time to give strong consideration to the future of your business. This is the time to determine how you will rebound from this crisis and how you will come out stronger in the long run. More than anything else, this should be the wake-up call to ensure you set up your business for success if something like this ever happens again. This is the time to consider lessons learned from a pandemic.
1 Get your finances in order. Sadly, despite government funding and local community/state grants offered to help businesses, there were many small business owners who weren’t able to apply, simply because they didn’t have their financial paperwork up to date. Lack of good financial data prevented some small business owners from even filling out applications.
It’s true that most of us get involved in the pet care industry because we love dogs, so financial paperwork isn’t usually the highlight of our work—and it’s easy to put it off in favor of working with the dogs. But this pandemic should be a solid reminder that you have to run your business like a business, and you really need to know your numbers. Being able to run reports to understand your payroll, your expenses and your revenue is vital to ensure you are making money.
As Peter Drucker states, “What gets measured, gets managed,” and we need to manage the money in our business.
Action Step: Whether you are a small sole proprietorship or a corporation, hire a bookkeeper or learn to do it yourself. Keep your financials up to date and study them on a monthly basis.
2 Have a budget. Most pet business owners dread the question, “Do you have a budget?” Budgeting is valuable for a number of reasons: 1) It gives you a benchmark to distinguish the revenue goal you need to hit in order to make a certain profit. 2) It will tell you when you should increase your marketing or staffing. 3) It will help you understand the impact of discounts on your bottom line (and it would surprise you to know that many businesses are giving away over 25% of their profit without even realizing it).
Having your budget reviewed by an outside consultant can help you identify leaks in your business where you are losing money. And, during COVID-19, a budget would have helped you know what you need to make in unique and original services to mitigate the devastating losses when revenue dipped.
Action Step:Complete your budget for 2020; it’s never too late to get one done. Don’t wait until next year. If you aren’t sure where to begin, just pull your financial data from last year and use that (if you don’t have that data, refer to lesson #1).
3 Have an emergency fund.U.S. Bureau of Labor Statistics reports that 82% of small businesses that fail do so because of cash flow issues. This could happen because they don’t generate enough profit, because they have outstanding unpaid bills for client services or because they simply don’t spend their money wisely. In the case of this pandemic, the immediate halt of most pet care services without any notice pointed out the real need for all businesses to have an emergency fund.
Every business should start saving money to build an emergency fund that is equal to 3-6 months of your expenses. The point of this fund is to cover your business in case of lean times when business isn’t as strong as usual, to cover emergency repairs that come up unexpectedly or to take advantage of opportunities that might arise for your company.
Sadly, some businesses shut their doors completely because they had no reserve funds to cover minimal expenses. Do you even know the bare minimum expenses you have to pay regardless of whether or not you have a single paying client? In other words, what are your monthly expenses regardless of what dogs you have in your care? Start saving 3-6 times that amount as a minimum.
Action Step: Starting today, commit to building your emergency fund by setting aside some money each month. You will build it slowly, over time, but you have to start now. Of course, first you also need to ensure your business is profitable and making money so you have some cash available to save (another reason to get your finances in order and prepare a budget).
4 Diversify. During this pandemic, we saw that the businesses which had more diverse offerings were able to take advantage of additional revenue streams and pivot their business model quickly. Having more than one type of service allows companies to make up lost revenue in other areas of their business. This is a simple example of not having all your eggs in one basket. If that basket tips over, you have nothing.
Now is the time to consider adding other revenue streams to your business. This could be other services that are completely different from what you offer now (for instance, adding dog training or grooming to your dog daycare/lodging business), or it could mean adding different formats of your existing service (for instance, adding group classes, online training or evaluations to your private dog training lessons). It could also mean adding affiliate services or retail services.
Action Step: Think about ways you could offer other revenue streams to your current business model and make a plan to implement those services during 2020.
5 Persevere and be creative. Pivot. Be Creative. Try new things. Experiment. I heard these phrases multiple times during the pandemic. Those who come out the strongest will be the businesses that kept looking for the rainbow in the pandemic rainstorm; the businesses that adapted to the new normal of a stay-at-home world, tried new services and kept in touch with their clients to find out what they needed.
A crisis is a time when you can be overcome by the chaos and fear. But during a crisis, there is also the opportunity to find a new path, try new services, experiment with a new business model or create new revenue streams. Those who were able to break through the chaos and fear and get focused on moving forward to take advantage of new opportunities were also able to continue making money, gain new clients and continue their business. The heart of an entrepreneur is one that causes you to continue to adapt and adjust.
Action Step: Take stock of your business. Does it look the same now as it did before the pandemic? If so, make changes so you can virus-proof your business for the future. Look at ways you can pivot and adjust your business model in case this happens again. No business should come out of the pandemic looking the same as it started. This is the time for creative adjustments to your business that will help you survive into the future.
Robin Bennett is a Certified Professional Dog Trainer, author, speaker, and expert on dogs. She founded one of the largest dog training companies in Virginia and has been using her expertise in “reading dogs” to teach pet owners and others in the pet care industry how to keep dogs safe for over 20 years. Robin’s first book, All About Dog Daycare, is the number one reference on opening a dog daycare. She is also the co-founder of The Dog Gurus, the nation’s premier resource for dog care professionals. Through The Dog Gurus she is now helping pet care professionals by showing them how to create sustainable businesses with teams that truly know dogs.