During this unprecedented crisis of our lifetime, when every possible industry is taking a hit never experienced before, how we think of ways to survive the storm, will be the key determining factor of how to thrive in the new post-corona economy. From a survey conducted in April 2020, the US Chamber of Commerce published the following key findings:
- One in four (24%) small businesses have shut down temporarily in response to COVID-19.
- Among those who haven’t temporarily shut down yet, 40% report it is likely they will do so within the next two weeks. This means a total of 54% of all small businesses report they are closed or could close within the coming weeks.
- More temporary shutdowns likely in coming weeks. Among those who haven’t temporarily shut down yet, 40% report it is likely they will do so within the next two weeks. This means a total of 54% of all small businesses report they are closed or could close within the coming weeks.
- Clock ticking on permanent shutdowns. Forty-three percent believe they have less than six months (including one in ten that say they have less than one month) until a permanent shutdown is unavoidable.
- Months before return to normalcy. Almost half (46%) of small businesses believe it will take the U.S. economy six months to a year to return to normal.
Here are a few tips on how to survive and ultimately thrive beating the odds:
Service Sector
Service industry, especially the high physical contact personal grooming businesses are the hardest hit in the pandemic. Most shut down temporarily, with many planning to close permanently, with news ones postponing plans to enter the market. Hair, nail salons are not luxury for the privileged few but considered as essentials, as proven in previous recessions. The market can go without a haircut for a couple of months of lockdown but not longer. However, the winners of previous recessions are now considered the biggest risk factors in this pandemic and thus face dire consequences of survival. Although the official lockdown is lifted, and some of these businesses are slowing opening their doors again, it will be a while till the consumer confidence is fully restored.
As for any service-oriented business, customer satisfaction, and word of mouth should be your biggest survival technique. Implementing innovative and flawless measures for preventing contamination and protecting the clients would be key to moving forward.
Create A Customer Obsessed Culture
In the new economy, keeping your customers happy will not be enough to survive and thrive. You need to be customer obsessed, internalizing and catering to their needs as never before. Your number one priority should be to keep your existing customer happy and loyal to your business. keep innovating ways to make them not abandon you, even if it means our bottom-line drops. In a recession of this nature, retention is the primary mode of success.
Shift Focus From Profit To Break-Even
In this kind of economy, even if you are breaking even, you are a winner. When the whole economy is bleeding, ability to keep your doors open for business, making enough to cover your operating expenses, are enough for a winning model. This is not the time to think selfishly about the net income. Keeping the gross revenue flatline and operating expenses as low as possible is the trick to come out shining out of this adversary.
Keeping your Employees Afloat
When your business is suffering badly enough to cut down all unnecessary expenses, your first priority should be to protect your key employees in all possible ways. Essential employees are not your expenses but critical success factors. If at all feasible, take pay cuts yourself before letting others go. If all else fails, think of alternatives like unpaid leaves or pay cuts before you let a single high performer leave your business. By doing so, you are not only saving your business, but contributing in saving the whole economy in the big scheme of things.
Put Growth in the Back Burner for now
When customer retention is the key, growing in the time of crisis may not be the best strategy. Your investment for growth can be injected back into the existing business to keep your nose above water without impacting the business mission and the livelihood of the employees. “Watch and wait” should save you from further downturns should the economy not bounce back in the near future.
Maintain Great Relationships with Valued Vendors
Since supply chain is a two-way street, the survivors and winners are the ones who will value their vendors understanding the horrific economic impact forced on every single business. If you have been happy with and loyal to your vendors, now is not the time to squeeze them for discounts, cuts, or impairing relationships with trivialities. Just like your own business, they run their own painstakingly built business and earned your trust over the years with hard work, loyalty, and genuine concerns. You are already aware of your most value added vendors and keeping them on your side will be one of your greatest tactics to come out as a winner.
In this unprecedented calamity, not a single business is spared. Have faith in yourselves, and in your fellow crusaders.
Mohammad Moinuddin, President, SmartBizPay
Stay safe, healthy, and prosperous.
How can we help?
Contact us at 877.663.5033 or support@smartbizpay.com.
We at SmartBizPay, are fighting the pandemic and economic crisis together with you.