The UK Government’s measures for helping business and employees may help. But if you know this is only putting off the inevitable it’s time to pause for thought, clear your head and vow not to make any rash moves.
The following may offer some assurance that, by digging deep, thinking clearly and holding your nerve, things may turn out ok.
Notes from the last crash
In the wake of the last financial crisis my business partners and I had some tough choices to make. We had built a successful integrated agency with 18 staff across branding, design and digital. We had substantial running costs; a lease on offices in the heart London’s Clerkenwell, service charges, insurance, rates, utility bills, recycling collection, IT support, printers, stationery and consumables.
And our revenue abruptly went off a cliff.
There was no way we could reduce our overhead at the required rate to match our income. We were determined to do right by our staff and suppliers and as owner mangers we took the financial hit personally.
After a year of very painful adjustments, during which everything was rationalised in order to survive, we stabilised with a small specialist team and a handful of solid clients, most of whom we continue to work with today.
The experience has helped us to think and act quickly in the current crisis. The changes we made then, and the way we have run our business since, sees us in good shape to face the immediate uncertainty.
You learn fast when you're facing collapse. From the practicalities of unbundling all the accoutrements that business takes on (do you really need daily fruit deliveries or beer on a Friday afternoon), to the more personal matters of doubt, pride, competence and questioning your resilience.
To our surprise, we also kept wondering what would happen to our clients if we went under. Despite facing sever personal hardship and potential ruin, the prospect of leaving clients in the lurch was unthinkable. We had to make sure they were covered and that their digital presence didn’t go down if we did.
We figured we needed a ‘port in a storm’. We had conversations with intermediaries - deal makers and M&A consultants - who were keen to introduce us to potential suiters. We were ahead of the curve in digital expertise which was highly attractive to advertising and design agencies who were yet to make the transition.
We assumed our worst case scenario would be an acquihire where we and our staff would plug in to another agency as their digital team, take our clients with us and work with the clients they already had. We would no longer be in control but we’d all have jobs.
What we found was a culture clash that made this impossible. Most of the agency owners we met had no understanding of digital services and no interest in our clients. This wan’t going to work.
We had no choice but to find a way through independently. By narrowing our service offer, retiring non-digital clients and finding new collaborators, we found our future.
What now? What next?
Recognising that the current shock will not last in its current form, it’s important to take stock. It is highly likely that, current revenue problems aside, you have some decent clients, relevant skills and a viable underlying business.
Think about that for a minute - a viable underlying business. If you have good client relationships, services that they might need going forward, and the skills to deliver, you have something worth saving.
Stealing directly from McKinsey, ask yourself and your team these questions: What is most important right now? What might we be missing? How might things unfold from here, and what could we influence now that could pay off later?
If your creative business is facing an uncertain future we're happy to offer advice if we can. We might also be able to introduce you to like minded businesses or individuals that can help you steer a safe passage through choppy waters.