The COVID-19 pandemic has left its mark, significantly affecting the way we live our lives and do business. News of Virgin Australia going into voluntary administration, sporting clubs facing bankruptcy, retailers shutting their doors, and many more revealing stories have shown the way businesses are running need to change.
Here are some valuable lessons small businesses need to consider to be a major player now and in the future.
1. Having cash reserves is a must
Being prepared and having emergency funds has always been a best practice, and this is the time to have one. Cash reserves help when a business is faced with unexpected costs. These valuable dollars could be used to cover fixed costs like rent, staff wages, and supplier accounts during this crisis caused by COVID-19, without having to secure debt. This could be a short-term solution but a long-term commitment. The minimum recommended cash reserve is three months’ worth of business expenses. For small businesses with high staff entitlements, such as annual leave and long service leave, six months’ worth of expenses would be more ideal. Having a reserve gives you enough “breathing space” to maintain your business in a holding pattern and gives you the chance to come up with strategies on how to respond to the crisis and be more proactive, rather than reactive.
2. Be ready to pivot
It’s become very clear over the last couple of months that the “let’s wait and see what happens approach” is not the best crisis response plan. Having the ability to pivot your business in times of crisis and emergency says a lot about a small business’s agility. The shortage of hand sanitisers and antibacterial products as a result of the panic-buying happening throughout Australia led to other businesses pivoting their core business into making these products and giving their businesses a stronger chance of survival than those that didn’t or have not been able to. Fitness centres are now providing their members with online classes so they can stay fit (and sane) while also nurturing the business relationship they have with members. If your business involves textile or clothing, it might be a good idea to use extra cloth and other materials to make face masks that you can sell or donate to frontliners and essential workers. After all, your customers will remember how you responded during the crisis and will be more likely to give you their trust if you have done something remarkable and sincere during these difficult times.
3. Adapting to conditions is key
The pandemic has also challenged small businesses into adjusting processes and systems to adapt to the times quickly to avoid suffering great losses. Restaurants and cafes that have been on food delivery apps as part of their service offering before COVID-19 would be fairing a lot better than those that are using these apps for the first time. There are those unavoidable teething issues when engaging something new, coupled with experiencing lost income. However, it’s still better to be able to adapt and learn the ropes rather than not at all. Look into online/digital solutions that you can incorporate with your operations and provide your customers with convenience even after the crisis and under normal circumstances.
4. Technology is your friend
Speaking of online solutions, the internet and virtual meeting apps like Zoom, as well as the rise of remote teams, have seen their biggest leap this year as a result of the COVID-19 disruptions. Small businesses with teams that have always had actual flexible working conditions are operating business as usual. Businesses with no experience working remotely are behind the curve. The costs to set it up can be a massive expense on the business. It has also been challenging for leaders and owners as they navigate managing their teams remotely. The challenge of meeting KPIs without micromanaging team members is a real thing many businesses are experiencing. In retail, businesses have depended on their online stores. It’s worth incorporating the power of technology and the internet to your business to stay afloat and keep up with the changing times. Look into online project and team management programs and communication and collaboration tools to maintain your team’s cohesiveness and productivity, then introduce new ways on how your customers can get in touch or acquire your goods and services through the internet.
5. Believe in the power of social media
With everyone being asked to be on home quarantine and only go out for essential supplies, businesses need a way to stay in contact with their customers – social media is the answer. People want to connect with other people and social media interactions have been at a high at the moment. If your business website was not set up to sell online, Facebook and Instagram have saved a lot of businesses. They serve as effective messaging channels to stay in contact with your clients without having to be at the mercy of your phones and respond when you are best able to give your full attention to your customers. With everyone now on social media to keep in touch with the outside world and to look out for news and announcements, it has also become a powerful channel for marketing and advertising. But due to the uncertainty and anxiety that people are experiencing during these times, it’s best to tailor your marketing content’s messaging to the situation and not appear as spammy or hard selling.
Ultimately, the COVID-19 crisis has shown businesses why it’s important to be prepared and have contingency plans in place for dealing with unexpected situations. No one would have predicted that a major disruption like this would prevail (or when it would happen), but best we could do is to consider and plan how to remain agile and proactive to changing times. Once we have flattened the curve, we are going to experience a “new normal” and the adjustments you had as a response to the crisis will continue to be effective, expecting that people will be more precautious now in going out and about.