My employees are like family.
Photo by Nancy Ray
I’ve been fortunate to have worked with wedding pros from 94 countries over my career and I’ve heard from a ton of them this past month – all with similar questions, stories of lost business, uncertainties of what to say to clients who are completely stressed.
We’re all in this together. If you have questions on Coronavirus and your wedding business, feel free to email me at hello@thinksplendid.com. I’ll be sharing my answers here on the Think Splendid blog so that everyone can benefit. I’ll also keep your name anonymous.
Focus on the Splendid
We're an industry that makes our living by celebrating life's milestones, so I'm going to start each of these update posts with a few positive COVID-19 things we can all smile about:
GLOBAL RECOVERY RATE
The recovery rate is now more than 98,500 people, up from 92,000 yesterday.
FASHION TO THE RESCUE
From the NYTimes: As an industry, fashion has been particularly affected by the mass business closings — and particularly active in offering resources to assist the fight against the coronavirus, stepping up as governments and the medical community scramble to respond to the crisis . . . Christian Siriano, the fashion designer, has reassigned his 10 seamstresses in New York. They are beginning to make masks and hope to produce a few thousand a week.
This question is from a wedding dress store owner
I opened my bridal boutique in 2007 just selling wedding gowns. Ten years ago I started carrying prom dresses because it was a lucrative extra stream of income even though it is seasonal.
Almost all of our brides have been canceling or postponing because of Coronavirus, and all of the schools in my area have canceled prom. Last week I was forced to close the store temporarily because of Shelter in Place and being called a non-essential business.
I have six salesgirls on staff plus the seamstresses who do our alterations . . . they are like family to me. I don’t want to lay anyone off, but with losing an entire season of prom sales and not being open for bridal appointments, I don’t know what to do.
I am overwhelmed and have cried myself to sleep every night. Any advice you have would be appreciated.
Answer from Liene
You started your business in 2007, just before the market crash in 2008, so I know you have grit and probably a healthy dose of moxie.
The uncertainties (and economic fears) of "what happens next and when" are similar to 9/11 and 2008, even if the restrictions against gatherings and events make for a very different scenario this time around.
In 2001, I was working for an international NGO in a role that required me to do high-stakes crisis management and had me on the phone with then-US Secretary of State Colin Powell's team almost daily. In 2008, I was working in the wedding industry and experienced first-hand the economic impact it had not only on my own business but on the businesses of my industry friends and colleagues.
Working in a highly stressful non-stop job in 2001 and the stress of owning a business in 2008 reinforced three things for me:
As humans, we are resilient.
As a society, we are resilient.
As an industry, we are resilient.
We may not get through this as quickly as we'd like, but we will get through this.
Even if you got comfortable over the last several years, you still have all of the grit and moxie you had back in 2008, when you found yourself in the midst of a recession in your second year of business.
You got through that and you can get through this.
As for avoiding layoffs, here are some thoughts:
FIGURE OUT YOUR FINANCIAL RUNWAY
The first thing you need to do is figure out how much financial runway you have (the amount of time before your business runs out of cash). When you run your numbers, here are some things to keep in mind:
You should be prepared to have your store closed for at least a month.
The unfortunate reality is that Coronavirus will likely go on for longer than the general public is anticipating.
We know this from looking at the facts of the science behind the spread as well as the timeline on when certain steps were taken. (Please know, there is nothing I would love more than to end up being 110% wrong about this.)
My job as a wedding business consultant is not to tell you what you want to hear, but to provide you with educated and experienced insights so that you can make clear-eyed strategic decisions that enable your business to survive and thrive in the long-term.Since your store is closed and you won’t have the sales coming in that you normally do, take potential revenue out of any financial projections. We are not basing this on potential cash coming in, but actual cash you have right now.
Cut any superfluous overhead out of those numbers as well. Whatever money you have earmarked for things that are “nice to have” but not necessary can be freed up.
FINANCIAL TRIAGE
Now that you have an idea of what you can spend (and when that money will run out), prioritize what’s most important to you. The solutions and strategies you come up with should be based on your top priorities, not on trying to do all the things or making everyone happy.
1) Since one of your top priorities is keeping your staff employed, here are some things to consider:
How long do you have before you can no longer make payroll?
If you’re in the US, where healthcare is often tied to employment, keeping your employees on health insurance during a health pandemic should be your priority as much as possible.
If your employees are laid off, they may be eligible for COBRA (an act Congress passed to allow people to keep their health plan while in between jobs). However, COBRA requires they pay not only their monthly share of the health insurance premium, but also the higher share you were paying as the employer, plus a 2% fee. Keeping their health insurance after being laid off can very easily end up costing them more than an unemployment check income provides.Unemployment typically pays less than half of an employee’s paycheck (it varies by state in the US, but is never over 50%).
If you don’t have the ability to keep your employees at full salary, can you offer reduced pay that is still a higher rate than unemployment would pay but also allow them to keep their health insurance?
It's not an ideal situation, but it may be a better option for them than essentially being income-less because COBRA payments used up all the unemployment money.
2) Another financial priority that should be near the top of your list, in my opinion, is keeping your retail space without defaulting on the lease or mortgage.
If you’re trying to balance keeping your staff with keeping your location, can you negotiate with your landlord to pay less while your store is closed?
I have spoken to several people over the last week whose retail and warehouse landlords have been uncharacteristically generous in this regard, so it's worth a shot. All they can say is no or hell no.
3) What accounts payable vendors do you owe?
Are the designers and manufacturers able to relax their terms to give you longer to pay?
Would you be able to negotiate better rates with vendors and suppliers you have had a long-standing account with that you’ve always paid on time?
4) Hold off on placing new orders, for now.
I know your supplier reps are calling trying to meet their own new sales goals and I know you have a great relationship with them going back years. For now your focus is on payroll, making your store’s lease/mortgage payments, and paying any open AP debts you already owe.
Everyone in the supply chain is suffering: the designers, the materials suppliers, the manufacturers (whether a factory overseas or an in-house atelier), the trade shows and buyers markets, the retail stores, plus every other business in between that keeps the entire process running smoothly from first sketch to last dance.
If you have extra financial cushion to place new orders to keep your spirits up about Fall and Winter sales, and want to share that wealth with others in the supply chain who may not be in the same boat, great!
Be as generous as financially feasible but do not bankrupt your family or your company in order to be the hero for your customers OR your suppliers. Whatever "people pleasing" or co-dependent tendencies you may have cannot be allowed in the drivers seat for this decision making process.
It is going to be a slog for a little while, but again, you made it through 2008 and you can make it through this.
*This is not legal advice and should not be construed as such. Remember that laws and regulations vary by city/county/state/province/country. Always check with your own attorney for legal advice on your specific situation.
Questions from Wedding Pros
When I say we’re all in this together, I mean we are all in this together. I am not a blogger, I am a business consultant and speaker. This blog is not sponsored nor ad supported and is not how I make my income. Since we are all in this together, I am not charging consulting fees to answer questions related to COVID-19.
I will continue answering Coronavirus-related wedding business questions from ANY wedding, event, or hospitality professional, located anywhere in the world, here on the blog over the next few weeks and possibly longer, so that anyone, anywhere in the world can access the information they may need for their business at any time.
I’ll be continuing to work through the questions sent in so far here on the blog so that we can all navigate this together as best we can. Please send any questions you have to hello@thinksplendid.com and remember there is no such thing as a dumb question.
I’ll be keeping the names anonymous so you don’t have to worry about being attached to a question in a Google search or in case you don’t want a colleague or competitor to know what’s on your mind.
Written by
LIENE STEVENS
Liene Stevens, the founder and CEO of Think Splendid, is an author, speaker, and award-winning business strategist. Armed with $2000, a healthy work ethic, and an undeserved dose of privilege, Liene bootstrapped Think Splendid from a scribble in a notebook to a successful wedding business consulting firm with a client list spanning 94 countries.
