Key Learnings From Profitable Businesses Despite A Global Pandemic
In the first two installments of our blog series, The Hidden Cost of Doing it All, we highlighted some of the proactive ways savvy entrepreneurs have built better businesses.
These practices include:
- Leveraging their most valuable asset – TIME – in an effort to increase productivity and profits
- Knowing their strengths and weaknesses, and putting more resources toward supporting the latter
- Applying the 1% rule to determine what activities are most valuable and worth their time
To round out this series, we’ll take a look at how some of our clients have applied these practices to grow their businesses.
Small Businesses Hit Hard During the Pandemic
The COVID-19 pandemic has dramatically affected the worldwide economy. Specifically here in the U.S., we’ve seen how the past 15 months have been a pivotal point for so many entrepreneurs. Businesses were forced to close and unemployment increased to levels we haven’t seen since the Great Depression.
Consider these pandemic-related stats:
- According to the Wall Street Journal:
- Roughly 200,000 extra businesses were permanently closed during the first year of the viral outbreak (in recent years, studies show that the number of closures is about 600,000)
- The government provided $525 billion in forgivable loans to small businesses last year through the Paycheck Protection Program
- The total number of people who were self-employed and working declined by 20.2 percent between April 2019 and April 2020 (U.S. Small Business Administration)
- A report from Facebook and the Small Business Roundtable showed that 22% of U.S. small and medium businesses were closed in February (CNBC)
“Though the pandemic has proven to be one of most tumultuous economic times in recent history, our clients that thrived and were profitable remained proactive and focused on their core strengths,” said George R. Gerhard, Owner of Trivium Point Advisory, a boutique Westchester-based financial services and business consulting firm.
Empowered People Empower People
If there’s one positive thing that the pandemic has given us, it’s perspective. Dr. Clay Routledge, a leading expert in existential psychology, professor of management, faculty scholar, and a senior researcher said, “The pandemic has caused many workers to think deeply about what’s most important in their lives and how to spend more of their time focused on what gives them purpose.”
A hypothetical example; a longstanding client, the owner of a successful business. Pre-pandemic, he shouldered the responsibility of managing the company entirely on his own. His 60-70 hours of work per week for several decades left him stressed and burnt out.
The onset of the pandemic slowed work down and gave him an opportunity to reevaluate his priorities. As his longtime personal financial planners, we sat with him to assess the future of his company, which were inextricably tied to his personal and financial goals.
Although he had a skilled and experienced management team, many of which had been with him for many years, he was still at the helm, responsible for all key decisions and operations.
His dilemma was this – could he step away from the business so that he could work less and enjoy life more?
He was aware that many members of his team were getting recruited and that if they left, his business would suffer.
The answer in our opinion was clear…he needed to invest in them.
Working collaboratively, we helped our client realize that by empowering his top talent, he could pursue his goal of finally achieving greater work/life balance. Together we developed a new financial structure for his company that worked toward increasing the salaries and annual incentive bonuses for his department. Along with this new compensation structure came the potential for elevated titles and a reorganization of responsibilities.
While our client was now giving 10% more of his income to these employees, the benefits both professional and personal far outweighed the investment.
“By tying key players into his vision, he could incentivize them to stay. People want to be challenged and feel inspired and connected. In our opinion many businesses fail because the owners can’t evolve and they are disconnected from the employees,” said Ron A. Pac, Owner of Trivium Point Advisory.
“Our client worked so long and hard for so many years, and he finally wanted to enjoy life. We helped him put a plan in place that not only aimed to solve the pain of his top employees, but his own as well,” he continued.
Gerhard added, “We worked closely with our client to come up with a solution that could benefit everyone. He realized that this restructuring was an investment versus an expense, and this made all the difference. Fast forward several months since these changes have taken place – his management team is invigorated and our client is finally able to enjoy life following so many years of building his enterprise.”
No Travel? No Problem.
Another hypothetical example: Similarly, we had client who was forced to evaluate his business and financial future once the pandemic hit. As a travel advisor, he knew that his industry was going to be dramatically impacted.
At the start of the pandemic our client was facing a tremendous amount of uncertainty. With lockdown orders both in the U.S. and abroad in place, no one was going anywhere…and no one knew for how long.
While all this was happening, our client was simultaneously facing a pivotal moment in his career. He had the opportunity to build his own new brand or tuck under another larger travel company.
Rather than crumble, shelter in place, and hope for the best, he was proactive and took the “slow down” from the pandemic to ramp up. He looked at this opportunity as a fresh new start to really start thinking about what he wanted his future to look like.
While Trivium Point Advisory had previously prepared his taxes and done some light financial advising, we began to have deeper business discussions about his goals.
Working together, we weighed the benefits of being on his own, after which he hired people and built a brand with completely new infrastructure.
His resilience and forward thinking coupled with our collaboration and experience resulted in him being one of the few travel advisors in the Northeast that was profitable in 2020. All this during a time that saw a 42% annual industry decline from the year prior!
“Our client strove to be successful through the pandemic in one of the most challenged industries, and it all started with a conversation,” said Pac.
Takeaways From The Hidden Cost of Doing It All
If we can learn a few things from these two client examples, it’s this – despite the steep challenges you and your business may face, with comprehensive support and counsel, together seeking the appropriate solutions and opportunities exist. It’s just a matter of finding and embracing them.
“These clients, realizing the need to make big decisions during such a crucial point not only in their personal/professional lives, but in the larger economic climate, took the opportunity to bring our team in for consultation. We worked towards helping them develop, understand and adopt new approaches to their business, which positioned them to manage great financial growth,” said Pac.
These clients embraced the notion that in order to pursue your goals, it often takes the knowledge and advice of experienced professionals to get you there.
Trivium Point Advisory is committed to helping companies of all sizes striving to thrive no matter what challenges or obstacles they may face. Their team of seasoned industry professionals are experienced at understanding a client’s goals and aiming to formulate a plan to help them pursue financial independence for their business.
“Some financial services firms offer a laundry list of cookie cutter offerings. We take a contrarian approach to the typical client relationship. By taking a deeper look to understand what our clients’ needs are, we are able to formulate individualized approaches seeking sustainable future growth,” said Gerhard
Contact us here to get this conversation started.