With a big crises like the corona virus and a possible economic recession its not easy to see light at the end of the tunnel. The problems and responsibilities are so big it paralyzes our thinking. However during a crisis you need energy and strength to make strategies and plans to cruise your company and team through the crises.
So how do you manage ? How do you and your team stay positive ?
Can you add your business relations in the survival plan ? Together you are stronger, can you and your guides, your ground handlers, communities, work together to make money ?
Analyse & Define your Options
You first need to have some kind of idea what you are dealing with. At the moment (half May 2020) it's still incredible difficult to do that. To help you understanding the situation, creating a scenario planning is helpful. In the scenario of how travel could bounce back in Asia you can get some ideas and learn to watch what kind of indicators you can use to identify early which scenario to apply for your business.
Based on these general scenarios when, domestic and international travel might come back you can carve your own 3 scenarios that fits your own travel company.
When will business come back, what kind of business will come back
For every scenario, decide what is best
- Temporary stop the company and re strategize
- Switch energy to other activities that can make money
- Try to make money anyways (for example through digital experiences and selling vouchers)
- A combination of the above
One thing is sure: you can't go on as usual. Therefor its wise to step on the break, re calibrate and do only the essential while you are creating you new strategic planning.
Be wary to be too optimistic and burn all your cash to soon. I like this article with the CEO of United Airlines, hope is not a strategy, be realistic and make sure you have cash also in the case of a worst case scenario.
Whatever you do: focus on the most effective things, with a certain return in a near future and cut down all none essential costs.
Now is the time to save money and focus on maximum returns while being emphatic to your business partners.
Strategic Planning : Know your cash flow and its limits
The first thing you need to do is to create a cash flow model that helps you to understand what and who needs to be paid when, which of your fixed costs are essential, negotiable in price and or could be delayed and what not ?
The goal of your cash flow statement is that you have an exact insight how long you can survive with the available cash, and when you need extra money and how much.
A cash flow also helps to prioritize when to pay what.
Because the uncertainty at the moment, cash reserves or the access of cash is really important, only spend if you know it will have a return or is an absolute necessity.
Cut down on costs
Stop all operational costs, not needed to get through today and upcoming week, maybe weeks.
Plan customers that want a refund of their bookings, how much can your company afford on salaries and upto when. Involve your team in difficult decisions, earning less, work less, who needs money the most, who needs help ? if there is no money at all how can we ensure a supply of daily essentials to people who need it the most ?
Prevent returning cash for cancelled bookings. - This is a tricky one, and should give money back if people demand it, but you should try to convince them to postpone, what are your arguments, how can you deal with the fear of your customers that you might go bankrupt ? Or if not you, the airlines of the flight ? Getting into conflict with people that have trusted you before is not wise, try to retain them.
If you have planned out how long you can go on with the money you have, your prioritized your payments and you roughly know what might happen when and what the consequences are, you have started to stabilize the crisis.
Once you stabilized your situation there is energy to rebuild your business.
If you don't know how to make a cash flow forecast this video is a good start.
Focus on your top products
If you go on focus around those products with high margins, can you refine your niche ? Which products with high margins will do well in the going back to normal phase and beyond.
Focus your product offerings around your strengths.
WAYS OF MAKING MONEY FOR TOUR OPERATORS
Whatever happens, there are always opportunities to be creative and do business.
When looking for (new) opportunities look and discuss your purpose, vision and mission again with your team, did these disruptive times changed your vision ? Or do you stick with what you believed in an find other ways to realize your dream.
Underneath some options to generate cash flow to get your brainstorming kick started.
Selling your tours for when the crisis is over
This helps to get some cash flow now if you ask for an advance, but of course you have to deliver later. So its a tricky one, that won't help much if the situation Are you using the money to keep your suppliers alive by pre booking them ? How do you make sure they don't fall and make your problem bigger.
Tours that are first to recover will be for the domestic market, tailor made and private or for very small groups.
You can also already starting thinking longer in advance for example summer 2021.
Have you thought about insecurities around pricing ? Will new measure from the government towards social distancing and health impact your margins ?
If your selling your experiences for a later time, you have to reduce the risk of doing business with you. Your audience will be scared that you go bankrupt, what kind of insurances can you provide them ?
Selling new products to your audience
Some ideas to help you think about developing new products to your current audience
- Shipping Goods
- Digital Experiences
- Guide Books
- Digital Services
- Use strengths & expertise for different audience
- Brainstorm
- Use your car park for delivery services
A tool to help you make your plan is to define a swot and identify your strengths and opportunities how can you use your strengths to make money, what are your fears and threats can you come up with 3 ways to conquer each threat ? This helps you to keep the energy flowing, and contributes to the feeling that you are in control which is important o keep you and your team going.
Define goals for the path you choose : If you decide to sell local goods to your client database define a SMART goal. And start to break it down into milestones. When creating goals and milestones it's good to realize that we often underestimate what we can do in a year, but overestimate what we can do in a day.
To stay engaged and keep people going it helps to break down the next 3 things to do in super simple tasks. Let your team first define those task themselves and then coach them.
If every day you do 3 tasks, that is 15 a week, 45 a month, more than 500 a year - if these tasks are all aligned you make big progress.
(Temporary) Close
It takes guts to (temporarily) close down your travel business, but it could be the best thing to do after you have analysed your cash flow. You could also temporarily close because you changed your vision and a post pandemic scenario needs a new approach and new branding. Like DamRep did.
Your Team
Keeping your team motivated with new goals and roles even temporary outside of your own organisation if needed. It's essential to keep your team engaged and energized if you want to keep them together.
You are not alone in this crisis, can you create partnerships ?
Relations with your oversea b2b business partners
- What can you do to help them survive
- Ways to make money together
Relations with your suppliers
- What can you do to help them survive
- Ways to make money together
Become strategically sound
Put focus on creating content
Make your social media in order
Streamline your process
What can you do with the expertise and knowledge in your company
Set Coronavirus information site
Strategic Focus - During Coronacris -
- Map out all possibilities to make money
- Map out all possibilities to cut costs
Stop working on anything that doesn’t contribute to immediate survival - of your family, your staff's family and the company.
Further reading: https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis
