The COVID-19 Pandemic has sunk hundreds of companies and brought havoc to the bottom line of many businesses around the world. Contracting economies in different continents have changed the business landscape.
Is there a way to stay afloat in a sea of pandemic? How can companies, big or small, stay in shape despite the enormous challenges.
First, the initial step is to believe that for every crisis, there’s an opportunity. A person who has already made up his or her mind that all is lost, well, has already lost.
But the entrepreneur’s mentality is quite different. They always see the way forward even in the face of enormous odds.
For example, a restaurateur who had hired the services of a professional laser engraver to add sophistication and style to his storefront immediately lost diners at the start of the quarantine. Quickly, this smart restaurant owner saw the people’s need for food deliveries. He then converted his uppity restaurant into a food delivery production unit to service people who are stuck at home and in need of good food. If the customers cannot come to the restaurant, the restaurant will come to the customers.
Like the restaurateur, other businesses can still find ways to stay operational and profitable even under these extraordinary times. Here are some ideas on how to keep the business alive during these challenging times:
1. Rationalize Business Spending
First and foremost, existing businesses need to rationalize their spending. This means that the initial task is to look at the cash flow of the firm. How much money flows out of the business in terms of cost of goods, payroll, inventory, rent, accounts payable, outsourced services (for example, an accountant who is paid a retainer’s fee), among others.
Where and how can the business save money? Should the company reduce its orders for a certain part or ingredient as a means to trim down the inventory? If the inventory management is not properly done, the company can either have an excessive number of products on stock which makes cash “sleep” in the stockroom; or they order too little which limits the production and sales of the product.
For a look at the cash inflow, consider the second idea below.
2. Analyze Existing and Potential Markets
Cash inflow generally comes from the sale of a product or service. It can also come from financing such as a business loan or revenue from an investment that the business made.
The good place to begin is always where it matters most: the customers.
The customers make up one’s market. For example, a sneaker company would likely target the youth and young adult segment that has the money and interest to buy rubber shoes, walking shoes, and other footwear that is associated with leisure, sports, and outdoor activities. It is good to analyze how the customers can still reach the store, both the brick-and-mortar location and the digital shop. If the sneaker company invested in an electronic commerce-enabled website, it would be able to reach out to their current and potential customers and generate sales. In short, for their particular product, the market they have is one that is digitally savvy and, therefore, their marketing and sales funnels need to be attuned to that characteristic.
During the height of the lockdown, many salons and barbershops had to close down. Quick-thinking entrepreneurs saw the gap and endeavored to fill it by selling hair clippers and other hair care products online. Some barbers experimented with starting their own vlogs or hair cutting tutorial, not just to keep in touch with loyal customers but as a means to build a community online. Long-term, these barbers are hoping to monetize their social media accounts. Near-term, they want to use the tutorial as a platform to sell hair care products. From earning income directly and traditionally by offering hair cutting services, they transitioned well into retailers of hair care products.
3. Leverage Technology
Tapping into new markets is often a move that requires the use of good technology. Like the restaurateur who transitioned to food delivery services, partnering with delivery services like DoorDash, GrubHub, and Uber Eats enabled his business to leverage on mobile apps. Instead of spending more on traditional advertisements and other marketing campaigns, he opted to become part of the food network of these food delivery companies that already had a built-in customer base. As a result, the restaurateur was able to tap into new markets, specifically those people who had never dined-in at his restaurant but were active users of food delivery apps.
Even smaller companies can invest in customer relationship management (CRM) software to keep their customers engaged either by phone, chat, or email. There are many providers that offer software-as-a-service (SAAS) options that cater to companies with varied operational scales and organizational sizes.
Adapting to change often requires the adoption of new technologies that enable a business to compete in an increasingly fast world that is full of digitally dependent customers.
4. Empathize with Customers
Most important of all, in traditional and new digital channels, businesses need to convey their interest in the welfare of their customers. In a period of global health emergency, many companies really take the extra mile to offer discounts, freebies, and other charitable support activities to help customers and the community at large. This is also good for the company image and its thrusts related to corporate social responsibility.
There many other ideas or courses of action that businesses can take to remain strong even in a recession. All boiled down to one sentence: a business can survive and even thrive in this economy by remaining flexible, solution-focused, and responsive to customer needs and expectations.