The global COVID-19 pandemic has far reaching repercussions for society, the health care system and the economy. Small and medium sized enterprises are going to be placed under tremendous pressure as people practice social distancing. Supply chains will be challenged too.
With the knock-on effects of COVID-19 impacting consumer behavior, small businesses must be innovative and find ways to stay competitive and ensure their survival.
“Certainly, these are extremely trying times, particularly because we are in unchartered territory. However, it is important not to panic. It is also crucial that you continue marketing and communicating with both your internal and external stakeholders. People still have needs and will continue to buy products and services. The way in which they access these products and services just might change.
“Those who market and sell better than their competition and make it more convenient for customers to get their hands on their goods, are the ones that will better weather this storm. You might want to change your marketing messaging, relook your supply chain, and make some changes to the way in which you operate on a day to day basis,” says Paul Henshall, CEO of ActionCOACH ANZ.
Communication is the first area that needs your attention in any “panic” situation. Given the situation is likely painted as “dire” in the eyes of the news media, communicating your standpoint and any business changes to your team becomes critical. Without communication the FUD (fear, uncertainty, and doubt) factor kicks in. This can cause panic to escalate. No news from leadership is news itself and it is not seen as good news either.
Henshall advises company owners to be open, honest and transparent with the facts, and to focus on communicating fact-based and most relevant information.
“At the same time, be empathetic, engaging and educational.”
Henshall tells business owners to take a step back and look objectively at their entire business to find the greatest point of weakness – the biggest threat to business continuity. For some it could be sales, for others it is creating the widget (product or service), for some it could be technology, for others it could be inventory, and for others it could be getting a team to do the work.
“With this pandemic or other supply chain issues, you might need to change the way you distribute, sell or deliver. Look carefully at where the missing links are. Consider if you need to deliver the product or service in a different model. Ask if your customer buy the product the same way? Don’t wait for the customer to find alternative sources.
“You may have to source products from different suppliers to your prior sources because in some situations, the primary source for product or inventory might not be able to provide the quantity or timely delivery. This may be an opportunity to make a change that was already needed.”
Encouragingly, Henshall says that small companies can quickly adapt to changes in the economy thanks to their size which makes them more agile, and because most of their business comes from their local customers who largely prefer to “buy local”.
Adding value is one of the best and easiest ways of ensuring that customers do not stray. Consider carefully what customers need and think strategically about how this can be delivered to them more seamlessly and at a fair price. Focus on the little things such as optimising communication, levels of customer service and by making it easy for people to source and pay for products.
Henshall adds that small businesses may be able to leverage debt at a lower cost. “Refinancing debt at a lower cost could be of benefit. The decrease in cash flow that comes from slow payments (higher accounts receivable) might mean a greater use of borrowed capital. Also, a disaster or pandemic or other type of ‘emergency’ as defined by local or national governments sometimes means the freeing up of cash to keep economies stable. Look for finance opportunities to smooth the way.
He concludes: “Small businesses contribute significantly to the economy and it is important to the health and sustainability of local communities that they survive. As individuals and fellow business owners, we should continue to support local businesses.
“If you are feeling overwhelmed, consider commissioning a business coach to assist simple yet effective tools to achieve and strategies for managing this turbulent time. Importantly, make sure you are healthy physically, mentally, and financially. This is critical as you are the driver of your bus.”