Do you know how to help your clients through times of economic crisis?
Every business experiences its share of ups and downs. Sometimes an economic crisis can hit a specific industry, and other times it affects nearly everyone. Either way, chances are, your clients will experience some type of crisis at some point. During those times, it’s essential that they have a wise and experienced CPA to guide them as they pivot to adapt to changing economic circumstances. Are you prepared to help your clients deal with labor shortages and returning customers?
At Gusto, we want to empower you to help your clients through challenging economic crises. That’s why we bring you our online show On the Margins: LIVE with hosts Caleb Newquist and Will Lopez. In this episode, we talk with Josh Lance, visionary leader of the Lance CPA Group and the head of accounting at Ignition. Josh shared incredible advice and insight from his own experience helping clients in the restaurant and brewery industries.
It’s important to note that while Josh speaks specifically about helping his food and beverage clients through the changes brought on by the COVID-19 pandemic and its aftermath, his advice holds true for any kind of economic crisis.
Choosing the right industry vertical
Before launching into their discussion of how accountants can help their clients mitigate the consequences of an economic crisis, Caleb and Will first took a moment to talk to Josh about his firm, Lance CPA Group. When Josh first started out designing his firm, he made a conscious choice to focus on what he truly loves:
“I knew I wanted to niche into something. … I was a homebrewer, a home winemaker. I had friends who were starting breweries and was just really interested in that industry. And so when I was designing my firm, designing the clients I wanted to target, I went after those breweries as a good industry to work with.”– Josh Lance
What are you passionate about? Is there an industry or community you have a passion for serving? Maybe you love serving women-owned businesses or businesses owned by people of color? Perhaps you have a passion for serving in the non-profit sector? Whatever your passion is, you can design your firm to serve a related industry or clientele.
Remember to consider how you are going to attract clients in your chosen vertical—the industry you’ve chosen to focus on. Research what channels they use to network, and increase your presence. For example, if you wish to attract young entrepreneurs, social media platforms like Twitter and Instagram could be key places for you to market your firm.
If you don’t have a specific industry niche in mind, consider the kinds of clients you would like to work with. Do you like working with people who are ambitious, quirky, or altruistic? Josh, for example, loves working with creatives:
“Our second industry right behind [breweries] is digital agencies, so marketers, ad agencies, things like that. They’re different industries, but they’re also the same in that they’re both run by creatives. … There’s a lot of art form behind creating beers, … so very creative people … are usually running breweries.”– Josh Lance
By choosing people and industries you love to work with, you bring your own passion and energy to the table, and that can be invaluable in times of financial hardship.
How to pivot in business during hard times
When the economy takes a downturn, it can be difficult for your clients to adapt. During the COVID-19 pandemic, Josh saw many of his clients lose business as restaurants and breweries had to close to help stop the spread of the disease. However, they learned to pivot:
“[My clients moved] everything to packaged goods, so canning all their beers or put[ting them in] the bottles or whatever way they could get it packaged. A lot of them were doing online sales. So that’s something that they’ve not normally done because that’s not something that was in their thought process.”– Josh Lance
During an economic crisis, it may be necessary for your clients to rethink the very core of their business model. While breweries are built around the experience of welcoming customers to the restaurant to enjoy craft beers together, when they could no longer open their doors, many breweries learned how to package their products and get beer delivered in a different way.
Many other businesses in the food and beverage industry made similar changes to adapt during the economic downturn caused by the pandemic. Restaurants everywhere adapted to using platforms like Doordash and Uber Eats to have their food delivered, keeping business alive.
Consider your clients—how might they need to pivot during times of economic hardship? Even if the pivot only needs to be temporary, creative solutions like the ones Josh’s clients used may be necessary to keep the businesses alive. Do your clients need to move into the e-commerce space? Should they adapt to using new technology? Think creatively, and be open to unlikely solutions.
What to do after an economic crisis
Here’s a bit of good news: Every economic crisis eventually comes to an end. One way or another, the economy will swing back up, and when that happens, you and your clients can and should celebrate!
However, after surviving a financial crisis and making certain pivots to their businesses to do it, your clients will need help adjusting to normalcy again. Josh shared a few great pieces of advice concerning how to do that. For one, he strongly emphasized the importance of not forgetting the lessons learned during the crisis:
“Do they still use some of the same channels they’ve created? A lot of [breweries] moved to doing packaged goods and canning beer, and that was great to get it out during the pandemic. Well, if you’re going to continue to do [that], how do you [continue to] get that … out through distributors or retailers or things like that? So [it’s about] not neglecting some of the things they’ve learned during the pandemic but now just figuring out how they can pivot it and do that now on a consistent basis.”– Josh Lance
Once you and your client have done the hard work of learning how to pivot during a financially trying time, it’s important to remember those lessons when circumstances return to normal again. If your clients, like Josh’s, have shifted their businesses into a different space, such as retail, consider how you can maintain that growth while also returning to your normal mode of operation. This can be an enormous opportunity for growth, and it’s important to help your clients take advantage of it.
Further, when the economy improves and you and your clients are no longer in survival mode, it’s important to begin forecasting the future:
“I think a lot of it is just, ‘Hey, where do we see this next year going?’ … How do you make sure that everyone can still have that good experience, but your employees feel like they’re still being taken care of and the right protocols are in place as well? So a lot of that’s just working through: How do you reopen and reopen well and make sure it works for everyone involved?”– Josh Lance
When your clients prepare to begin growing and operating as normal after a time of crisis, it’s important to help them look to the future. Plan for growth, and remember to consider how you will continue to implement the changes you’ve already made. By holding onto your learning and planning for the future, you can help your clients grow and scale more than ever before.
Helping your clients handle a labor shortage
After a time of economic crisis when businesses and employees experience dramatic shifts, your clients can find themselves facing a labor shortage. Many of Josh’s clients were extremely short of staff when they reopened after the COVID-19 pandemic. How can your clients handle a labor shortage like this?
“You have to do new things about, ‘Hey, well, what are the things we’re going [to implement] to incentivize people to come work at our business compared to others?’ Whether it’s benefits, whether it’s higher pay, whether it’s bonuses, [or] whether it’s doing different things to create that demand.”– Josh Lance
If your clients are currently experiencing a labor shortage, consider what they can do to attract quality talent. Do they need to offer health benefits to be competitive against other businesses in their industry? If they work in the food and beverage industry, could they consider doing away with the tipping system and instead offer higher pay to give employees a more stable income? Again, consider creative solutions, and be open-minded.
Learn more about advising your clients through an economic crisis
Choosing an industry niche can be an effective way to design your accounting firm. By choosing to work with clients and businesses you love, you can bring your passion to the table. However, your clients will face times of economic crisis. When that happens, you can help your clients pivot and find new ways to sustain their businesses. Even after the economic crisis is over, it’s important to hold onto the lessons you learned from your pivot and continue to adjust and adapt. Further, if your clients face labor shortages after an economic crisis, consider creative solutions to incentivize quality employees to work with them.
If you’d like to check out the full episode of On the Margins: LIVE with Caleb, Will, and Josh, you can do so here.
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