Generate Leads with a Winning Sales Letter

Are you looking to entice a new lead or land a big client?

Today’s marketers know direct mail is an especially persuasive medium. According to 2018 direct mail response statistics, direct mail offered a 9% response rate to house lists and a 4.9% response to prospect lists. And one of the most potent tools of the trade is the good old-fashioned sales letter.

Want to grab attention with a persuasive, relevant, engaging letter? Here are a few tips:

Start with a powerful hook

If you want readers to make it past the first sentence, your first paragraph must arouse curiosity, evoke emotion, or resonate with a problem or pain point of a specific individual.

People can’t finish what they don’t start, so the opening sentences must be rock solid.

Make your sales letter look like a regular letter

The most relatable letters are those that feel personal.

For a more casual effect, use script font or type-writer styles like New Courier or Prestige Elite.

Write with a conversational tone

Use personal pronouns and write for one: I, the letter writer, am talking directly to you, the reader.

Avoid the pompous business-memo style or fluffy ad-speak. Be friendly, natural, and specific.

Use skim layers for easy reading

Underline phrases and indent paragraphs for emphasis, or use asterisks, bullets, dashes, or arrows to make reading more efficient.

People are turned off by long blocks of text, so keep your page design lively and your language succinct.

Use benefit loaded subheadings

Improve reader response by including precise user benefits that match your target audience.

Hikers have little interest in buying boots. What they want is dry, blister-free feet. Remember, people don’t buy products, they buy better versions of themselves.

Make it about them

Focus on readers and their needs rather than your product and its features.

For example, instead of highlighting “our high-caliber bookkeeping software,” try something like this: “Account for EVERY CENT with smart, secure book-keeping.”

Add colors or borders

The most important information in your letter should leap off the page.

Can you highlight a paragraph in yellow? Add blue “handwriting” font in the margin? Put a box around copy that absolutely cannot be missed?

Use a specific call to action

Explain what you’re selling, what it can do, and how they can get in on it.

Add discount offers, expiration dates, or “magic” marketing words like irresistible, no-obligation, flash sale, hassle-free, guaranteed results, buy one get one, free trial, or last chance offer.

Tell and Sell with This Winning Combination

There is an old saying in direct mail: the letter sells, and the brochure tells.

In any direct-mail package, combining a letter and brochure can be an especially powerful combination.

Ready to get started? Save time and trouble by partnering with our experienced team! When you’re ready to move ahead, we’ll help you create stunning pieces that make your message shine. From initial formatting to direct mail packaging and delivery, we’ll do the heavy lifting and streamline the entire process.

Visit us online or give us a call today to talk options!

Increase Your Odds for Success by Finding a Business Mentor

Bill Gates first met his mentor at a dinner organized by his mom.

When his mother suggested the connection, Gates thought he would have nothing in common with him, because this contact was just a “guy who picks stocks.” It turned out that they had more in common than he realized, and over the years, Gates came to view him as a key mentor and advisor.

That man? Billionaire investor Warren Buffett.

Today, Gates has created software that runs in most of the computers on the planet. He is a billionaire philanthropist who has given away more than $28 billion while working to eradicate polio. And Gates says that one of the most important things Buffet taught him is that success is not found through net worth but by “having people you care about loving you back.”

4 Keys for Developing a Powerful Professional Mentorship

Do you have a professional mentor?

If you don’t, this is a great time to get matched with one. The Service Corps of Retired Executives (SCORE) is a non-profit organization with members who provide free consultation services and advice to entrepreneurs. SCORE oversees the nation’s largest network of volunteer, expert business mentors. This organization helps thousands of entrepreneurs start and grow businesses, to give back to communities, and to allow people to pass on their knowledge to the next generation of leaders.

Whether you connect with an organization like SCORE or pursue a mentorship opportunity of your own, here are four things you might look for in a mentor.

1. Compatibility

Your mentor is someone who you will be working closely with, so it’s important that you have a sense of compatibility with this person, so the relationship doesn’t feel awkward or forced.

If you sense cues that could indicate long term tension, it’s ok to voice your concerns or end the relationship. Assigning the initial stage of the relationship as a short-term trial period might make a potential termination seem more natural.

2. Contrast

A mentor helps you stretch yourself, so it’s good if your mentor seems a bit outside of your comfort zone.

Don’t pick a carbon copy of yourself or look for a best buddy in a mentor. Diversity helps you get a better perspective on things, and it may be good if your mentor is from a different industry, age group, or geographical area.

3. Expertise

Mentorship isn’t about following someone with the most experience or the biggest title; it’s about finding someone with the knowledge to help you on your journey.

Look for a mentor who has unique expertise or one who has worked through similar challenges as you face rather than focusing on someone with a long career or a resume that matches yours.

4. Trust

Because you will share intimate business details with your mentor, trust is of utmost importance.

And this trust should go both ways. When trust is mutual, both parties can confide in each other in specific, vulnerable ways. Build trust by learning each other’s communication styles, setting expectations up front, and asking deeper questions as you grow. Once a solid level of trust is established, you’ll be able to glean the best insights from this relationship.

Bouncing Back After COVID-19

This unique time of economic recovery is probably unlike any crisis your business has faced.

But entrepreneurs are nothing if not resilient, and you can get through this. The key is to take quick action and to lean on the wisdom of others. Why not pursue a mentoring relationship today?

Customer Service Stories to Make Your Heart Smile

“Well done is better than well said.” (Benjamin Franklin)

After months of social distancing, today, people are craving a personal touch more than ever. Companies that go the extra mile remind us of an important truth: people are valuable. Businesses that genuinely care about their customers will express it, and clients will reciprocate with a loyalty that lasts.

Looking for inspiration? Here are three heart-warming stories.

Lego Understands Children

Losing a toy can be devastating to a child.

Lego recognized this and personalized their response in an unforgettable way. When Luka Apps lost his favorite Lego figure (Ninjago’s “Jay ZX”) while shopping, he wrote an apology letter to Lego, begged for a replacement, and said his father had warned him about taking Legos outside.

Lego didn’t just replace Jay; they surprised Luka with something special. A customer service rep named Richard responded quickly, telling Luka he had talked to (Ninjago Spinjitzu Master) Sensei Wu:

“He told me to tell you, ‘Luka, your father seems like a very wise man. You must always protect your Ninjago minifigures like the dragons protect the Weapons of Spinjitzu.’ Sensei Wu also told me it was okay if I sent you a new Jay and told me it would be okay if I included something extra for you because anyone that saves their Christmas money to buy the Ultrasonic Raider must be a really big Ninjago fan.

“So, I hope you enjoy your Jay minifigure with all his weapons. You will actually have the only Jay minifigure that combines 3 different Jays into one! I am also going to send you a bad guy for him to fight! Just remember, what Sensei Wu said: keep your minifigures protected like the Weapons of Spinjitzu! And of course, always listen to your dad.”

Richard’s response was so creative it went viral. Lego surprised Luke and won the hearts of families worldwide.

B. Dalton: Placing Customers Above Competition

Is your company truly focused on customer satisfaction?

B. Dalton (a bookseller later acquired by Barnes and Noble) was famous for its relentless customer care. One Christmas, a mother was shopping for a book her son requested. An employee scanned the computer and found the desired book was in stock but still packed.

After unsuccessfully searching the storeroom, the employee returned with an apology. Disappointed by her inability to help, the worker then called a competing retailer, reserved the book for the customer, and printed directions to the other store. Reader DD Moffitt was stunned by this consideration. While B. Dalton missed the sale that day, it gained DD’s loyalty for life.

Trader Joe’s: Turning a Problem into a Party

One evening, a mother and son were grabbing groceries at Trader Joe’s.

The boy (as boys are known to do) was bouncing off the walls. He ran loose from his mother, escaped to another aisle, and almost ran over an employee. The embarrassed mother moved quickly to apologize, but the employee said they were all used to it, and that shopping with children was kind of like “a dance party on the floor.”

With that, he started dodging and grooving and called several fellow employees to jam along.

They asked the shy child to join in the freezer section party, and soon the whole store was laughing. By making light of a tough situation, Trader Joe’s made this an unforgettable day.

It’s All About People

Business is about relationships, and customer service stories are wonderful because they illustrate kindness in action and spark new ideas.

Enjoy these illustrations and allow them to inspire you to take your own service to a higher level.

3 Strategies for Pursuing New Business Opportunities

In the weeks surrounding the onset of COVID-19, businesses worldwide have pivoted quickly.

Many have juggled shifting expectations by establishing remote work arrangements, securing supply chains, reducing employee workload, cutting costs, or applying for government support.

Now it’s time to move forward with a proactive business plan and to consider new opportunities. What will this look like for your business? Here are three strategies.

Strategy 1: Same Products, Different Channel

If the majority of your business takes place on-site, now a promotion focus through a different channel may be helpful.

In what ways can you offer the same (or similar) products and services through an online channel? Can you digitize any of your physical products? Can you offer webinars, online consultation, or build a technology-mediated delivery solution? From curbside pick-up to livestream shopping events, ramped up digital options are a low-hanging fruit every business should explore.

One florist facing delivery bans sold “virtual” bouquets for $70-$400 dollars. The recipient got a photo of their bouquet over email with the promise of a live delivery once businesses re-opened. When Chinese cosmetics company Lin Qingxuan was forced to close 40% of its stores, the company redeployed its beauty advisers as online influencers, and digital tools like WeChat engaged customers virtually. One large-scale livestream shopping event featuring 100 beauty advisers, helping Lin Quingxuan’s February sales climb 120% over 2019 sales.

Strategy 2: Same Infrastructure, Different Products

During a crisis, leaders must recognize opportunities and make the most of them. 

The COVID-19 season is a crucial time to consider new opportunities. While the need for some products and services has fallen, demand for others is high and even growing. Can your business deploy existing infrastructure to produce different products or offer new services?

In the spring of 2020, companies such as LVMH (perfumes) and Skyroro (rockets) switched to producing hand sanitizer within a few days. Manufacturers like GM, Ford, and My Pillow modified idle production lines to manufacture medical devices and face masks.

If people today see increased value in e-learning, improved individual health, or meaningful networking, how can your business identify and fill these needs? Disruptors often come from the bottom of the market to upend traditional retailers, or they create new markets and appeal to customers who have previously gone without a product.

Strategy 3: Same Products, Different Infrastructure

Perhaps your challenge is an increased demand for a particular product or service.

In this season, some companies may need to quickly augment physical systems, communication networks, or staffing to increase production or delivery capacity. And building new infrastructure often requires collaboration with external partners.

Employee sharing is one example of companies shifting infrastructure to meet needs. In Germany, McDonald’s staff have been permitted to work at Aldi stores while on-site dining is shuttered, and groceries are swamped. On the physical side, an adapted retail model may mean offer smaller stores (or “nodes” within large spaces) rather than crowd-based facilities.

Monitoring needs and forecasting future behavior are critical to adapting your infrastructure and remaining nimble.

Creativity Fuels Innovation

During a crisis, many things are out of your control.

But that’s ok because you can still shape your response! Focus solely on what you can control. Look for creative ways to adapt, and you will come out stronger in the years to come.  

 

Marketing Messages that Connect During a Crisis

We are in a totally different world right now.

Many of us are working from home and the future seems hazy. Perhaps you’re struggling to make decisions about staffing or future projects. But like a forest fire restarts growth, crisis moments can bring a new birth for your business. And that starts with how you communicate with customers.

Others-Focused Communication

In our unending-news-cycle world, much of what we hear seems like noise.

But now, more than ever, it is crucial for you to connect with people in meaningful ways. Want to send business messages that are well received? Use an OTHERS-centered paradigm.

O = ONE

Write for one person.

When you craft a message, imagine yourself speaking to one specific client. Pick out a single buyer and pretend you’re writing only for them. This helps you ditch the sanitized corporate-speak and makes your reader the focus of your message (rather than you!).

People connect to messages that are specific, personal, and conversational.

T = TRANSPARENCY

Embrace transparency to become relatable.

People may admire you for your strengths, but they connect with you through your weaknesses. Vulnerability ushers in humility and makes you instantly relatable to your audience. Transparency means letting people know how your business is doing or what has changed for you during this taxing season. You don’t have to air all your dirty laundry, just take an open, communicative posture. Now is not the time to go silent!

H= HELPFUL

Speak to their needs, not your own.

What messages are most helpful to your customers at this time? While you could send a five-star handwashing tutorial, perhaps what is needed is advice to parents on talking to their kids, or how your company is adding flexibility to meet customer needs.

Don’t be afraid to push others to success. If your clients seem fearful or tentative, perhaps your encouragement will be the fuel they need to get back in the game or to push a stalled project to completion.

E = EMPATHETIC

Make their problem your problem.

Maya Angelou once said, “people will forget what you said, people forget what you did, but people will never forget how you made them feel.”  

How does your messaging make people feel? Does it sound hard or templated? Or does it communicate true concern and a willingness to help? Your tone should sound something like this: “If it’s your problem, it’s my problem too, and we’ll work together to find a solution.”

R = RELEVANT

Timing matters.

The relevance of your messaging applies not only to its topic but its timing. Sending pre-scheduled content with no regard to how it will land during hardships is a sure way to demonstrate you’ve lost touch with your base. Reach out to customers and find out how they’re doing, then adapt your messages accordingly.

S = SINCERE

If you say or do something, mean it!

This may seem like a no-brainer, but you’d be surprised how often people talk just to hear their own voices. Using content just to fill space will strike people as stale and insincere. Instead, go out of your way to be helpful and kind without seeking a reward for doing so.

What Social Distance Can’t Overpower

Since you may not see customers directly for weeks to come, today is the time to make your website and print materials as “social distancing” friendly as possible.

By focusing on others with a relatable, helpful approach, you’ll connect with people one by one in ways that are sincere and inspiring. And nothing is more effective than that.

How to Determine Optimal Pricing for Your Products or Services

In September of 2019, Apple unveiled the iPhone 11, featuring a dual-lens rear camera, automated night mode, and built-in support for vision, hearing, and mobility.

One of the biggest surprises of the iPhone 11 was not its technical features, but its price. The iPhone 11 started at $699, down from the iPhone XR’s previous price of $749, and signaling one of the biggest year-on-year reductions in iPhone history. Apple also implemented $150 cuts on products like the iPhone 8 and the Apple Watch. Tech specialists were quick to comment:

“The biggest news from the Apple launch was the price cut for iPhone 11,” Chris Caso, an analyst at Raymond James and Associates, wrote in a note to investors. “We view this as an admission that Apple stretched too far with the price points at last year’s launch.”

Apple executives were not afraid to adjust pricing to current customers, especially knowing it may encourage upgrades or woo digital streaming subscribers. Lowering prices also increased the likelihood of up-selling related products: people who buy iPhones are far more likely to purchase iPads or AirPods.

Pricing that is “Just Right”

What is the best strategy for pricing the products or services you sell?

At first glance, this question seems pretty straightforward. But in reality, pricing is an art. Pricing well can enhance sales and create a prospering business, while the wrong approach can alienate customers and give competitors the edge.

There are a variety of pricing strategies in business, with some psychological influences in the approach you take. Here are four models to consider.

1. Cost-Based Pricing

The most straightforward pricing strategy is “cost-plus” pricing.

This involves calculating the total costs it takes to make your product, then adding a markup to determine the final price. This method is simple, fast, and lets you quickly add a profit margin to any product.

2. Market-Oriented Pricing

Market-oriented pricing starts from a cost-based perspective but adjusts pricing up or down with an eye on the competition and the customer.

For example, after comparing your products to similar items on the market, you can consciously price your products higher and brand your products as “best-quality” or “better performing.” Conversely, companies that price products low can lure more customers or sell large volumes that easily compensate for slim profit margins.

3. Discounts and Markdowns

Discount pricing is a strategy where items are initially marked high but then sold at a seemingly reduced cost to the consumer. 

This can be especially effective during seasonal demand, inventory liquidation, or when marketing to value-oriented purchasers.

4. Flex Pricing

Flex pricing (or dynamic pricing) allows businesses to manipulate sales based on current market demands.

Flex pricing is at its best on big retail days like Black Friday or Cyber Monday, but can also be linked to timebound marketing strategies. Similar to what many sports teams and airlines do with ticket prices, you can manipulate prices up or down in a timebound fashion.

Coupons are another way to discretely provide dynamic pricing to a subset of prospects or customers. This allows you to attract new users or build momentum during seasonal promotions while remaining profitable.

Dynamic pricing can be challenging but worthwhile. In 2013, Walmart used flex pricing to change the prices of its products almost 50,000 times a month, and with this pricing model, its global sales grew by 30 percent!

Adjust as You Go

You have a great deal of flexibility in how you set prices.

And the good news is this: there is no surefire method to pricing things “just right.” Consider the current pandemic situation, your target customers, eyeball the competition, and hone your marketing to match the pricing strategy you pursue. Experiment, adjust, and see what works for your business.

Five Strategies to Use Your “Quaran-TIME” Effectively

Mike Turner founded the Front Street Brokers real estate firm in 2005, with a desire to offer distinctive client experiences, to equip agents for the maximum efficiency and profitability, and to devote significant firm resources to a local, philanthropic focus.

After three years, Turner’s firm experienced a significant slowdown during the 2008 financial crisis. This was a time of immense strain, especially when scheduled closings dried up before his eyes:

“In that time period, we had 10 real estate transactions scheduled to close, and nine of them fell through for unforeseeable reasons,” Turner said. “All of a sudden, $100,000 worth of business income that we were dependent upon [was] gone.” 

Turner faced difficult choices in this season, and many of us are facing similar decisions in today’s COVID-19 crisis. Today, Turner says that while change is inevitable, he knows we still have a choice. Will we allow unforeseen challenges to drag us downstream, or will we improvise to find a way across the river?

Five Strategies to Use Your “Quaran-TIME” Effectively

Anyone can become a victim when change comes fast and forcefully.

Sudden change is scary, and though we may not be able to swim upstream, we can still strategize and seek active growth. What are some ways your business can grow during this difficult period?

Use Social Media to Connect with Customers

Try a more animated touch through social media. If subscribers are opening your emails, they are expressing genuine interest. Take these customer relationships to the next level by including embedded videos or links to caring content you’ve posted on Facebook, Twitter, or YouTube.

Answer Questions or Position Yourself as a Helper

As you reach out to subscribers, ask if they have any questions or respond to challenges you know they have. Take an interest in the content they post as well – comment on it, share it with your followers, or start real conversations. Connecting to clients now will form a personal bond that lasts longer than the COVID-19 crisis.

Stretch Your Team’s Skills

When activity wanes, morale often follows. Invigorate employees by offering on-going education tools, professional mentoring within your team, or problem-solving workshops that mobilize groups to tackle some of your most ambitious goals. If your company lacks online meeting capabilities, this is a great chance to preview options like Zoom or Google Hangouts.

Do Some Spring Cleaning

While the pace is reduced, give focused attention to your internal atmosphere. Whether you need to spruce up workspaces or sort through old files, redeem the time by getting organized. This may also be a great time to refresh decor, business cards, or your website, or to involve your team in designing new content for newsletters and videos.

Express Gratitude

In hard times, a warm word goes a long way, and this can shift your own perspective from negativity to hope. Take time to say thanks to customers with handwritten notes, personal videos, or future discount options. Whether you plan a summer reunion party or make appreciation phone calls, prioritizing gratitude will make you a better entrepreneur in the long run.

Change Course, but Don’t Quit!

They say that genius is just persistence in disguise.

In tough times it’s ok to be discouraged, but it’s not ok to quit. Be proactive in this season, and keep taking the steps you can to inch ahead. New paths are, by definition, uncleared. But persistence and positivity are your most valuable assets as you journey toward hope.

Is Direct Mail Safe During COVID-19?

In fast-moving and uncertain situations, communication can be a challenge.

While you may have been temporarily stalled by the dramatic changes of the last month, now is the right time to be proactive in your customer connections. Crisis communication specialists tell us that, in hard times, communicating early and often is crucial.

The decisions you make now are essential for your business to survive today and to thrive later on.

Why Direct Mail is Still a Trustworthy Source

Reports of postal workers testing positive for the novel coronavirus may have raised some concerns that the pathogen could live on letters and packages, potentially exposing people to infection just from opening their mail or packages. But the U.S. Postal Service has assured us that the mail is still safe:

“There is currently no evidence that COVID-19 can spread through the mail,” the postal service said recently, alluding to the disease caused by the virus and citing the U.S. Centers for Disease Control and Prevention and the World Health Organization. 

Most businesses are still mailing at this time, but if you have questions about direct mail marketing, you are not alone. It’s important to be ready with answers for your customers, preferably from reliable sources like the Center for Disease Control:

“Although the virus can survive for a short period on some surfaces, it is unlikely to be spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures,” says the CDC. “Currently there is no evidence to support transmission of COVID-19 associated with [mail and packages] and there have not been any cases of COVID-19 in the United States associated with imported goods.”

Because the virus is not spread through the skin, but through the respiratory tracks, any contact with mail or packages is not an immediate danger. Regular hand-washing and proper hygiene are the most important factors for mitigating any risk with envelopes, packages, or really with any contaminated surfaces.

What Kind of Mail Should I Send?

Since people are currently hungry for connection, there is no better time to lean into your marketing efforts.

But be sensitive in doing this, and offer messages of hope and relief. Dartmouth professor Paul Argenti offers these tips for communicating during a crisis:

Focus on What is Important to the Customer

For example, Target sent out a note from the CEO to customers, describing enhanced cleaning procedures and additional staffing for order pickup and drive-up services.

Provide Relief When Possible

JetBlue became the first airline to waive change and cancel fees for coronavirus-related concerns. The move went a long way towards reassuring current customers as well as bringing new ones on board. Insurance companies, in contrast, do not consider the coronavirus a valid reason for canceling a flight.

Focus on Empathy Instead of Pushing Sales

Be creative, but keep empathy in mind. Companies should reshape advertising and promotion strategies to be more in line with the current mood of the day.

Watch for Those Silver Linings

While we’re all in unfamiliar territory right now, everyone wants to support each other.

Businesses care about customers, and all of us care about economic recovery. Keep reaching out to your clients and remember that this is only temporary. While this situation won’t last, many positive outcomes will!

The lessons we learn today can make us more flexible, strategic, and more community-minded.

Leading with Empathy During Uncertain Times

COVID-19 is officially a pandemic, and millions of Americans are working at home.

Even if you aren’t sick, you feel the impact of this pandemic. As the coronavirus has spread across the globe, the CDC has made drastic recommendations on social distancing, self-quarantines, and statewide “stay at home” mandates.

Through this unprecedented season, what are some of the best ways to navigate your professional challenges?

“I Feel Your Pain”

Empathy is one of the best starting points.

Defined as “the ability to understand and share the feelings of another,” empathy allows you to comprehend what another person is experiencing or to put yourself in their position.

Empathy is the ability to perceive a situation from another person’s frame of reference, and possibly to experience the emotions that go with that. Empathy is different from just “being kind” because empathy is a powerful tool that allows you to truly understand points of view that are vastly different than yours. A person leading with empathy is more aware of overworked employees, overtaxed customers, or solutions that another person may overlook.

The benefits of empathy are huge. A recent nursing study showed that nurse managers who were perceived as empathetic could boost vitality and thriving environments in their teams. Empathetic leaders can communicate better with employees and customers, build bridges of trust, and can facilitate optimal employee performance and compliance. And this brings exponential gain: organizations with engaged employees have higher productivity, profitability, customer satisfaction, and loyalty.

Empathy in leadership can manifest in many ways with regard to the coronavirus response. Here are just three:

1. Be Calm

During any crisis, people need their leaders to remain calm and to empathize with their thoughts or feelings.

While you may not share the emotions of your customers or employees, it’s ok to acknowledge feelings of anxiety or stress. When possible, share resources that promote facts, not fear (like information from the World Health Organization or the Center for Disease Control), in order to help people intellectually interpret the outbreak.

2. Be Flexible

With many people working from home (with kids in tow!), some employees may struggle.

Leaders should be considerate of missed deadlines, unforeseen health emergencies, and emotions bubbling near the surface. Remember, things are not “business as usual,” and special times require special considerations. Above all, flexible managers are consistently leading AND responding. Simply directing employees to available support resources can make a huge difference.

3. Be Available

Not everyone is empathetic by nature, so this is a great time to check your own heart.

Examine yourself daily and ask: Am I really listening? Am I taking in others’ points of view? Ask for feedback from people you trust or solicit comments through neutral channels. Or set up work-from-home chats where people can share tips, information, advice, or inspiration as everyone adjusts to a new normal.

Natural routines can also go a long way toward building confidence – consider morning huddles, or regular conference call “office hours” to offer an open door for people in their most vulnerable moments.

Be Positive and Proactive

Still not sure how to show grace?

Perhaps the best strategy is to change your perspective. Instead of prioritizing outcomes or objectives, use this time to focus on your own leadership. Ideally, you should be a coach, a therapist, a sounding board, and a support system to your employees. Allow people to chat candidly and comically, and make room for a few failures.

Create margin during this roller coaster, and everyone will benefit!

Ideas for Paying Employees When Finances are Tight

The coronavirus has rattled the world, and while the health consequences are dire, the economic fallout could be worse.

In just one week, from March 7 to March 14, initial unemployment claims jumped by a third, rising from 211,000 to 281,000. And while we don’t know whether workers have been laid off or furloughed, we do know that lost jobs are bad for families, employers, and the nation.

Job losses translate into increased federal spending and a slower response to unemployment claims, and those businesses that have to hire or train new employees down the road will undoubtedly take a financial hit later. Even if it’s difficult, your business can benefit by keeping employees on payroll and by modifying your business plan.

What might this look like? Here are some options to consider:

Lower Overhead Expenses

The most effective response to financial pain is to freeze spending wherever possible.

This may mean holding off on new investments, eliminating projects where costs exceed value, or re-proposing previously rejected cost-savings ideas. Want a more comprehensive guide to cutting costs? Check out this article from the Harvard Business Review.

Consider Alternative Financing

While borrowing may not have previously been in your plans, the Small Business Association is working directly with state governors to provide targeted, low-interest loans to companies that have been severely impacted by COVID-19.

The SBA’s Economic Injury Disaster Loan program may provide the vital support you need during this temporary loss of revenue. Other options to consider are family borrowing, hard money loans, or seeking a float loan from a customer or an external “angel investor.”

Liquify Assets or Discount Existing Receivables

How can you attain missing funds to pay employees in a crunch?

“Beg, borrow, or sell whatever you need in order to come up with the funds,” says Rod Jorgensen, the director of counseling at the Nevada Small Business Development Center. Whether you sell vehicles, buildings, or equipment, put every option on the table for consideration.

Donald Todrin, founder of the Northhampton, MA-based Second Wind Consultants, says taking as much as a 50 percent hit on your outstanding receivables may also be a wise strategy:

“If I’ve got $25,000 out on the street that I’m owed, I’d slash it down to $10,000 on a promise [that vendors] wire me the money today,” Todrin said. “Pay me half [of what you owe me] and I’ll wipe [the debt] out. And you raise cash instantly and overnight. Now you pay a price for that because that’s your overhead money, but you cover your payroll. You got to play for another day.”

Be Resourceful and Keep Employees in the Loop

If you know you are unlikely to make payroll, it’s essential to be honest upfront.

Proactive communication is crucial during a crisis. If finances are tight, tell people up front, starting with the natural hierarchy of company leaders and involving them in the process. Allowing leaders to inform their teams can soften the blow and make it easier to gather feedback.

And be creative. Teams that want to retain employees in extremely tight situations may consider shrinking paychecks across the board or ask the highest paid, top-level staff members to (electively) forgo paychecks for a short time so lower-level employees can still be paid. This spreads out income and grows confidence and unity in your staff.

People First

Though you may not be closing shop, many businesses will experience shortfalls in this season. Creative, sacrificial entrepreneurs will work hard to protect their most valuable asset: people.