The biggest mistake I made during Covid

I’ve had some time to reflect on how we handled Covid and lockdowns from a business point of view and now we’re heading into similarly tough times, I just wanted to share my thoughts on it so you could potentially benefit.

The reason I really want to talk about it now because I think we’re in a very similar stage now with the cost of living crisis and potentially going into another recession and I think the things I learned last time around with the lock downs are going to be quite relevant this time around too. When COVID hit, obviously everyone was caught by surprise. There was also a lot of panic overnight. We had loads and loads of clients that we were supporting and talking them through some pretty tough times and quite often on very limited and unspecific information from the government in terms of the support that was actually out there for small businesses.

But one of the things that I did as a knee-jerk reaction at the start of COVID was I said, “Okay, well, it looks like we’re going to slide into recession, even a depression. So, the best way to fight that is by just throwing a load of money at marketing and just growing the business.” So those COVID years, actually what happened was I drastically increased our marketing budget. I think before COVID, we were maybe spending 10 grand a year in marketing and then during COVID, we probably ended up spending about 50. And it was just this knee-jerk reaction because I was scared. I thought a lot of our business would collapse and we just threw all this money into our marketing strategies and to grow our business.

The Biggest Mistake I Made

During COVID, we actually grew our business, our sales by about 25%. But in reality, it was probably one of the lowest profits we’ve ever made since we started the business. That was a mixture of also growing the team. The growing the team bit worked out. Even though it was a big outlay back then, we still got those team members and they’re still really driving our business forward. That bit worked out. But it was all the money we spent on marketing and this route we went down where we just wanted to grow and get more clients. And what I quickly realized was that was a big mistake. I mean, we met some really good clients that we still work with and I’m glad we met those clients, but just the idea of getting bigger just to combat recession, it’s not the right one.

What we should have done was focus on maintaining profitability and growing our profitability. The key thing about growing that profitability is we shouldn’t have just been focusing on our profits. What we should have been focusing on was adding as much value as possible to our existing clients and the businesses that we were ideally suited to help. One of the things we found was when you add growing by 25 clients on top of all the pressures of supporting existing ones during COVID, we were completely exhausted. It was probably the hardest we’ve ever had to work and not just physically in terms of doing the work, but emotionally as well. So, what we quickly realized was we just didn’t want this gigantic practice.

Pre-COVID, we had about 180 clients, so 180, and then our plan initially was to grow it to about 320. And COVID just taught us we don’t want to grow it to 320 clients, not because we don’t like working with businesses, but it’s just when you’ve got that many clients, it is a lot harder to add value and really build those relationships. We decided to go the other way and we said, “Okay, well, let’s shrink the business, but we’re going to shrink it in a way where we still make a lot more money because we’re adding a lot more value.” That’s when the Apex program was born. We made a decision as a business that we didn’t just want to play this quantity game, where we helped loads and loads and loads of people in a smaller way. We wanted to help a few in a much more impactful and meaningful way. That’s the biggest lesson we learned.

The Solution

So now, going into the next recession, there’s a lot of you out there who are probably under pricing pressure from your own customers and they might be just trying to get a bit of a discount to mitigate some of the other price increases they’ve had somewhere else. And if you give them that discount, bear in mind, your costs are going up anyway, you are just going to end up making no money, but you’re still going to work very hard. And just going into the recession now, whenever you go into the recession, you work harder than you ever have.

So, you don’t want to make less money than you have before and work harder. That’s not how it’s going to be. So anyone thinking about how they’re going to survive the next recession, I just want you to really learn from this mistake we made about just trying to get more clients and not really focusing on your pricing. Don’t worry about growing your client base. Just worry about growing the value you can add. So many business owners are really underestimating the quality of their own experiences and their own education when it comes to business and that’s something that a lot of your clients could really benefit from going to a recession.

So, what you’ve really got to do is just package it up in a way, like a signature solution, and then you can go back to your existing clients. And even though they’re under financial pressure, they’ll see the value in it and they will pay more for it and you’re going to really help them in a way that utilizes your own skill set, strengthens your relationships, and enhances yours and their profits.

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Why not check out our FREE guide:

6 Secrets to Growing Your Business During a Recession

By reading this guide you will discover:

  • How important systems and a team are in growth 
  • Why knee jerk reactions can cause lasting damage
  • How people will change the way they buy

Why not check out our FREE guide:

6 Secrets to Growing your Business During a Recession

By reading this guide you will discover:

  • How important systems and a team are in growth 
  • Why knee jerk reactions can cause lasting damage
  • How people will change the way they buy

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