Handling Sudden Declines in Business…

With the COVID pandemic, many businesses have seen drastic reductions in revenues. This includes consulting firms.

So what do you do? Don’t panic. OK, maybe for a moment or so, but then put on your consulting thinking cap, and start figuring out some alternate plans. After all, that is what we do as consultants — solve problems — and usually difficult ones that clients can’t or won’t handle themselves.

A good first step is to take stock of your finances. How long can you go at your present burn rate with little or no income? What expenses can your trim or eliminate? Are there other sources you can tap –  either savings or alternate income?

The next step is to take a hard look at both current and past sources of consulting income. Are there potential areas you have not pursued that might provide income?

Is it time to pivot?

I’ve long used a model dubbed “ACT”, for “Aware – Critique – Try.” Not sure where I learned it, but it was many years ago. It has served me well throughout my career.

–Aware — Time for creative ideas. Brainstorm — create mind maps — make lists — what ever it takes to get the juices flowing. Don’t hold back — at this stage, nothing is too far out or too impractical. 

–Critique — Next, sort through your ideas and pick a couple (not more three) to develop further. Start with some preliminary plans. List some objectives. But don’t overcomplicate things — keep it simple. You can refine things later.

–Try – This is where most people fail, due to fear and/or procrastination. But if your business is sinking, this is no time to crawl into a hole and hide. Or spend valuable time on things that don’t matter. The house is on fire — grab a hose or bucket — now!

Here is a real world example. The year is 1992. After five years in business, we finally felt like we arrived. Business flowed in with regularity — until it stopped — dead. While normally each billing about 80 hours/month, as I recall we billed about 24 hours — total — for the two of us in the entire fourth quarter. Ouch — ouch –ouch!!!

What happened, we wondered? Had the parade gone in a different direction? Where was everybody, anyway? And what are we going to do?

A little background. We had been riding two waves — EMI (Electromagnetic Interference) in personal computers, and in defense. We had two major clients that provided well over half our business. When the PCs and defense suddenly dried up, so did the business from our two big clients, along with others. Too few eggs in two few baskets.

So we looked at where any other business had come from. Nothing major, but medical devices stood out. At the time, we both lived in Minneapolis/St. Paul, a medical hub often dubbed “Medical Alley.”  A bunch of our past business was literally right in our back yard.

We noted this was a market not well served. Using simple electronics, it was not seen as glamorous as PCs or defense. It is also highly regulated, which scared others away.  Aha — a “barrier to entry” if we could crack it. 

Based on these observations, we put together a simple three part plan:

—Offered to write a simple column for a leading medical device magazine. Having written for a number of other magazines, we had the skills and credibility to deliver. The magazine jumped at our offer, and thus began a fortuitous long term relationship. 

—Joined an industry committee on medical devices. We approached this with care, as committees can suck a lot of time, and there were only two of us. But that worked too.

—Enhanced personal contacts in the FDA. We had already worked with FDA engineers, so that was simple. Plus, we truly enjoyed working with them as fellow professionals. 

Six moths later, we were back in business and recognized as EMI experts in the medical industry. We knew we had succeeded when an FDA engineer responded to a question about who to contact, he said in jest, “Dial 1-800-KIMMEL GERKE.” 

As an aside, not long after we got a real 800 number — 888-EMI-GURU. It has served us well. It also became our trademark and web address (www.emiguru.com.)

We did not stop there. We continued to burnish our reputation by writing a book, and with this fun little project. But our quick “three part plan” probably saved the business at a critical time.

The medical “pivot” became a model for expansion into other markets. We ultimately ended up with a portfolio of industries we served — computers, defense, medical, industrial controls, vehicles, facilities, and more. Some were even niches within niches, like nuclear power plants or farm machinery. 

As the old saying goes, “When life gives you lemons, make lemonade.” Or another old saying,”When the going gets tough, the tough gets going.”  We continued on for the next 23 years until my business partner passed away in 2015. But even now, I stay involved in semi-retirement at a level that suites me fine.

Good luck, and stay safe during this trying time —Uncle Daryl

It was five years ago last week I lost my good friend and business partner to cancer. I still miss drinking beer with him where we tried to solve the world’s problems.

So I offer this video in Bill’s memory. If you are a beer drinker, please join me in a toast. You can read his eulogy here.  RIP Bill Kimmel.

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