Whether you own a restaurant, retail, manufacturing or in the services domain, each definitely has its own challenges. However, all have similar things in common including protocols that must be implemented to control the spread of the COVID-19 virus, as well as cash flow, customer acquisition and marketing issues to deal with to name a few. COVID-19 is a systemic shock for every company around the world. The pandemic has changed not only economies but consumer behaviors and what customers value and demand moving forward. How should a savvy entrepreneur regain his or her best skills and eloquently move forward? There are five recommendations which will be addressed below.
The “new” normal or “next” normal
McKinsey & Co., a renowned business consultancy firm, declares that due to the business disruption caused by Covid-19, regardless of industry and sector, it envisions 7 elements which will be crucial in the shaping of the new normal. This includes:
- Distance (social/physical) is back (technology continues to shrink physical distance, but in other ways, it could be set for a return);
- Resilience & efficiency (combined – to come out of the crisis better than the competition, as well as the key to survival and long-term prosperity);
- The rise of the contact-free economy (especially in regards to making payments – but in three areas in particular—digital commerce/e-commerce, telemedicine/virtual health, and automation);
- More government intervention in the economy (step up to serve, or save, the private sector from economic disaster);
- More scrutiny for business (with public money offered, there will be real effects on the relations between government and business, and between business and society);
- Changing industry structures, consumer behavior, market positions, and sector attractiveness (should question whether existing market positions will be ongoing without much effort to reposition and respond to changes confronting various sectors as a whole);
- Finding the silver linings (an opportunity for some positive outcomes and lessons derived from the coronavirus crisis).
Don’t panic, reassess and execute
Preparation, agility and resilience are three key ingredients to weathering any business storm with “Threats” in your SWOT analysis. Although Covid-19 has caused more havoc than anyone would not possibly anticipate, for optimists and the determined, it has offered a silver lining in regards to being much better prepared for almost any other peril which comes along in the future.
Cash flow: Since we know that cash is a crucial aspect of any business, a focus should be on price, volume of products or/and services sold, cost of goods sold (COGS) or cost of services rendered, operational expenses, accounts receivable timing, inventory control and turnover, as well as accounts payable terms and payment timing.
New and refined business model and strategy: Get creative and brainstorm different ways you can readapt your business and still deliver your service and/or products, including methods to boost revenues not considered pre Covid-19. For example, dining restaurants and lounge cafes are operating home-delivery and pick-up, as well as downsizing their seating capacity. Other types of businesses are considering mainly online and considering weekly or monthly subscription-style deals and other incentives helps to stay ahead of the competition.
Execution: Once the viable strategy is in place, implementing it requires several variables including: a) Everyone is onboard and constant communication is key; b) Include a timeline to accomplish the tasks; c) Select which ones will create the greatest impact to the goals of the organization; d) Frequently monitor and evaluate ─ verify progress against plan and make any necessary adjustments if necessary.
Finally, don’t leave any strategic planning elements without clear “action steps.”
Growth and innovation: The successful development and implementation of new ideas and refinements is crucial to a business so as to improve its processes, increase its efficiency, introduce/launch new and improved products and/or services to market, in addition to, improving its profitability. Encouraging and brainstorming new ideas, with all staff involved for maximum feedback, is a savvy consideration. Some ideas to consider are: adapting the business to meet changing customer needs, changes that solicit changes due to a “new” normal, and new, refined or discontinued products and/or service offerings.
Use of technology: More than ever before, exploiting technology at your disposal brings an added advantage in running an efficient business, plus navigate the challenges from the contagion and aid their recovery. Businesses should make a mid to long-term plan on technology and digital strategy. For example, process automation can increase efficiency. There are likely to be more opportunities for companies, among others, in sectors such as remote offices, online education, online medical care and online entertainment. However, adopting new digital or mobile payment methods, earning revenue from online sales and using social media for business purposes should be top of mind.
At the end…
John F. Kennedy once stated that “when written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity.” The assumption is sufficiently genuine: that a calamity presents a choice. This is especially evident today. In business, regardless of industry, alternative yet practical ways to operate exist.
What is for certain, is that the upturn caused by Covid-19 will be a terrific opportunity for growth ─ but only for those who embrace it and make the required and meaningful changes. No one can predict risks such as a pandemic, but it would be foolish to think they, and other types of risks, will not occur and affect them in any way.