By Mark Quadros
Research shows that the COVID-19 pandemic has affected 76.2 percent of U.S. businesses. COVID-19 impacted most of these businesses negatively, disrupting everything from their supply chains to their in-store sales.
So, if you’re one of these business owners, how can you adjust your operation to thrive during lockdowns, stay open for customers and keep staff engaged?
Here are five COVID-19-involved business strategies to help small businesses survive the pandemic:
Redefine your business growth opportunities
The COVID-19 crisis and subsequent lockdown measures have disrupted many significant industries, including the hospitality industry, retail industry and entertainment industry. Naturally, companies in these fields have changed how they deliver their products and services to customers to continue growing.
But redefining your opportunities isn’t just limited to companies directly affected by lockdowns.
If you want to keep growing during the pandemic, you will need to seek out new ways to improve your profitability, including:
Entering new markets
Taking out a bridge loan and investing in new projects
Adjusting your marketing and sales approaches
Targeting new customers
Redesigning old processes with new online business tools
Forming new partnerships (especially with local suppliers)
Finding new ways to improve your offerings for customers
To identify the best opportunity for your brand, you must research potential options, identify the best ones and formalize them with a new business plan. According to this guide to business plans, your business plan should include detailed product and service plans, a market analysis, a management plan and a financial plan for each growth strategy.
Adapt your current business models
Experts predict that coronavirus will continue to spread around the world for the foreseeable future.
Naturally, if your brand wants to survive this new normal, you’ll need to crisis-proof your business so you can continue to operate in the current economic climate. To crisis-proof your business, you should:
Measure the damage to your company regularly so you can adapt to potential problems before they arise
Back up your data and embrace digital solutions to help staff work from home
Prioritize the health and safety of your employees with workplace safety measures like social distancing, hand sanitizer and masks
Reduce your cash flow to only essential expenses
Adjust how you deliver products and services to customers to ensure their safety when shopping
Re-organize your work processes to prioritize key functions (e.g., by redefining customer support)
Establish contingency plans for further lockdowns and pandemic restrictions
If you are self-employed or a small business owner, you could also take out a personal loan to keep your business’s cash flow steady as you adjust your business models.
Rethink your financial structure
A 2020 study on 5,800 small businesses from the U.S. found that the average brand with over $10,000 in expenses only had access to two weeks of cash at the start of the pandemic. Unsurprisingly, many of these companies had to adapt their spending habits to survive.
And the rest of us should learn from them.
To keep your brand alive during the pandemic, you will need to establish an emergency fund to cover any unexpected events (like lockdowns). You can build an emergency fund by saving the money you would have spent on unnecessary expenses.
To identify unnecessary expenses, sort your expenses into two key categories:
Value-adding expenses that are crucial to running the business (i.e., expenses like supplier costs, inventory acquisition costs, online advertising, staff wages and technology costs)
Extra expenses that are not crucial to running the business (i e., additional office space, extra professional training and food/drinks)
Once you have sorted your expenses, identify expenses you can eliminate to reduce your operating budget and make cuts according to your priorities.
Retrain your workforce
While it may seem wise to fire non-essential staff and redirect their salaries into your emergency fund, this decision may hurt your business financially long term. Currently, it costs $4,425 to hire the average employee and weeks to train and acclimate them. To avoid incurring this cost later, retrain your workforce and adjust their duties to match your new business model.
You should also consider ways to improve your employee’s productivity (the quantity of their work) and efficiency (the quality of their work). Improving productivity and efficiency will increase your business’s output, increasing your revenue and decreasing your expenses.
To improve efficiency, you can use a productivity formula and calculate your current figures:
Productivity = Total Output / Total Input
Efficiency = (Standard Hours Spent On Task / Actual Amount of Time Spent on Task) x 100
Then, brainstorm business-specific ways to improve productivity and efficiency.
Build meaningful relationships
Finally, you should prioritize maintaining good relationships with your customers. As research shows that the top 10 percent of customers spend three times more per transaction than the bottom 10 percent, maintaining a relationship with loyal customers will increase your revenue.
To maintain a connection with customers, you could:
Set up social media accounts and encourage customers to send you User-Generated Content (UGC)
Establish a customer loyalty program to keep customers happy
Improve your email marketing
Send digital ‘thank-you’ cards to customers
Offer special discounts to loyal customers
Improve your digital customer service practices
Convey your COVID-19 safety measures to customers with a poster
New normal, business
Periods of economic are very stressful for companies, but they frequently result in long-term growth and new industry-wide trends. For example, people often credit the fast rise of eCommerce to the 2003 SARS outbreak in China or the rise in click-and-collect to the early months of COVID-19.
If you follow the tips in this guide, your company can emerge from COVID-19 stronger and more profitable than ever before.
Source: Score
