The economic fallout of the COVID-19 pandemic has been unprecedented, and each day business owners have to adapt to an ever-changing global landscape.
Last week, CurrencyFair co-founder Brett Meyers and current CEO Paul Byrne joined Gary Fox on the Entrepreneur Experiment podcast to share their experience and advice with SMEs facing challenges.
This unique interview brings together the two people who have been instrumental in growing CurrencyFair into the leading global brand it is today.
CurrencyFair has been in business for a decade, and was founded in the midst of difficult economic conditions.
"When Brett started the company during the recession in 2009, it was providing great value for people in order to help them save money, that’s what the company still does today. We’re very focused on helping small businesses who are still trying to make payments and import goods from abroad," says Byrne.
What’s the first thing SMEs should look at when a downturn occurs?
Byrne says that the first thing to do is to consider your cash flow and whether or not you have enough money to keep your business afloat for a year. If you don’t, consider how you could get the cash - what revenue do you need to bring in and how do you go about that?
"Try and figure out if there are ways you can adapt your business to the changing economic world in the next 12 months. Or if you can’t, what do you need to do to mothball? Try and figure out what the world will look like in 12 months time in terms of the business you used to have - will it be the same business? For example, if it’s a manufacturing company will people want to buy the same things you’re manufacturing now or do you need to repurpose your factory, will there be the same demand for your goods in foreign markets as you have today?" Byrne says.
"Try and buy yourself time to step back and think it through logically in terms of planning different outcomes. Every month will bring new information.
"You have to be very flexible and you have to be able to change on a dime," he adds.
How can SMEs prepare for the next six months?
When a downturn occurs, Meyers believes that "worst-case scenario" analysis is one of the most important things a business can do, and also advises that it’s better to "overreact rather than underreact."
"Assume it will be worse than it will probably be because it’s easier to pull back from taking extra action and wind it back if it’s no longer necessary than it is to take a bit of action, and then take more action, and more action," he says.
Byrne expands on this point by highlighting that many businesses may also have to change their business models and target markets.
"It’s trying to find green-shoots of opportunity for every business and I think that by cutting hard early you buy more time to find that rather than constantly chasing the next cost cut," Byrne says.
"While you might be an optimist, as a business leader and a founder of the company you need to be a pessimist in a ‘shock’ and give yourself more time to react to chase new business opportunities or use the opportunity to refocus on what kind of business you actually want to be in a years time and work into that plan. That’s what we’re doing."
How long is your runway?
Meyers emphasises the importance of looking at your runway, in other words, how much time does your business have based on your current revenue situation?
Meyers says that business owners should consider what their runway is assuming a worst-case revenue situation.
"That’s the absolute first point, and once you’ve got that into a situation where you’re more comfortable, or as comfortable as you can be, make whatever decisions, use whatever tools, look at government supports - do whatever you can to get that runway sorted.
"You’ve got to start taking a view on the world and where it’s going and with the lens of your own business - in what ways can you adapt or change to fit in better with the way you think things are going to turn out?".
To hear more insights and advice for SMEs impacted by COVID-19, listen to the full podcast on YouTube, Spotify, or on MrGaryFox.com.