Before Mark Cuban became a billionaire, he was a small-business owner -- one who experienced a sudden loss in cash flow, similar to what many business owners are currently experiencing during the Covid-19 crisis. When he was building one of his first businesses, Cuban said he received a call one day that $82,000 in forged checks had been cashed. There was only $2,000 left in the bank.
"The fear is overwhelming," he said, reliving the experience on a webinar hosted by Salesforce this week on building resilience for small businesses. Cuban advised small-business owners to take some of the same steps now that he took when faced with his own cash crunch. Here's what he had to say.
1. Accept the reality and quickly take action.
Few saw this pandemic coming at the scale it did. It feels like whiplash to suddenly realize that everything has suddenly halted. Anger, anxiety, and fear are all normal emotions. As a business owner, you can't be paralyzed by those feelings. You need to move into action mode.
Cuban was furious to learn his bank account was drained and that he couldn't have prevented it. But if his company was going to survive, he needed to get back to work fast. "You can't pretend it didn't happen," he said.
2. Triage with transparency.
Cuban strongly urges transparent communication during this time with everyone and anyone who you owe money to.
Talk to your employees. Talk to your banker. Talk to your landlord. Communicate transparently and openly about your situation, even if you don't exactly know what the next steps are.
This is exactly what Cuban did when he suddenly ran out of money. "If my company was going to survive, I was going to have to get on the phone with all my bankers and let them know exactly what happened, why it happened, and then ask for some time," he said.
3. Be brutally honest with everyone.
"You have so much work to do to get through this," Cuban said. If you try to sugarcoat the reality of the situation with your business partners, it will catch up with you. Moving your business through the Covid-19 pandemic is all about being agile and resilient.
4. Prioritize connection over selling.
The fact of the matter is that many clients and accounts may not be able to spend money with you right now. Now is not the time to push sales, even if you're hurting on the revenue side.
Instead, Cuban says you should work on building the relationships you already have. Check in on your accounts without the expectation to close deals.
"Call them up, email them, text. How are you doing?" advised Cuban. "The power of human connection is more important now than ever."
On the other end of the crisis, you will be remembered for your kindness and compassion during this stressful time. That will pay off. If that account faces a decision between you and another vendor in the future, they're more likely to pick you.
5. Become an expert in small-business loans.
You can seek advice from a lawyer, but you also need to do the homework yourself. Don't expect your bank to hold your hand in navigating the loans process.
"Recognize that the bankers are just as confused as you are," Cuban said. Although that's a scary thought, when everything is moving so quickly it's difficult for everyone to keep up. Be the person that does keep up. As more stimulus funding hopefully becomes available for small businesses, study up on the rules and nuances.
Cuban reminded the webinar audience that small business owners already have resilience. You wouldn't have gotten this far if you didn't. Now it's time to apply that same resilience and stick-to-itiveness to this Covid-19 crisis.