Settled overnight, the COVID-19 crisis led to the total or partial interruption of the activities of many industries. From a certain point of view, this crisis can be compared to that of 2008, which scrutinized the businesses of small entrepreneurs in an equally ruthless way. Many of them then abandoned their activity, no longer having sufficient financial resources to meet their needs. Unfortunately, even today, more than 50% of entrepreneurs finance their business with their own money.
The truth is painful: the stories and experiences of entrepreneurs around the world show that, in the context of the return, no company will be able to balance expenses so that they become proportional to the decrease in income.
Slowly, small businesses have overcome the initial shock of the crisis and are now looking for options to get them back on track: from finding solutions to protect the safety and health of employees to accessing financing solutions.
In this sense, what are small businesses actually doing with a view to returning to the waterline?
Most of the business leaders we spoke with have prepared for a gradual return to work. In industries where teleworking is a viable option, a large portion of employees will continue to work from home. When the return to work is inevitable, safety and protection measures will be rigorous: disinfectant mats, dispensers of alcohol-based solutions, wearing of protective equipment such as masks and gloves (if applicable, and visors), appropriate ground marking with distance delimiters, etc. At the same time, reducing the physical presence of staff to the lowest possible level will be the best method of protection.
Many businesses have learned firsthand the painful lesson that relying on a single supplier or selling only one type of product or service is not viable for the future of the business. This is why more than 60% of business leaders with whom we discussed reopening have considered this recovery measure. For any type of business, it is important that the range of services and products offered is as varied as possible.
Given the changes transforming the consumer market before our eyes, price will likely be king in the marketing mix, at least for the immediate future. Most service industry entrepreneurs choose to offer special plans or offer free attachments to existing subscriptions. Under these conditions, they say, they retain their customers and align themselves with the competitive demands of the market. Furthermore, an important element of pricing is flexibility, openness to accepting installment payments or an extended payment term.
It is clear that now is not the time to make significant investments. However, planning closely, but with an overview of long-term goals, is a healthy attitude for any business. Most entrepreneurs say that this crisis has made them much more flexible, less strict in terms of pursuing the business plan, so that goals can be achieved faster and more efficiently. However, caution is required for the coming period.
During this period, the main problem for companies was the lack of liquidity, due to various causes: drop in sales, delays in paying invoices, etc. Measures to increase liquidity provision include the restructuring of some outstanding loans, reducing the cost of insurance for small businesses, renegotiation of payment terms with suppliers, access to financing alternatives such as factoring or discounting, as well as the sale of the company's fixed assets (such as land, machinery, etc.).
Ultimately, it is not possible at this time to predict what shape the economic recovery will take. The world has never faced such a situation, so scenarios for returning to normal sometimes have wildly different projections. Whether your business has been totally or partially interrupted, it is important to overcome this period of stagnation.
So, keep working. You will prove that you are valuable to customers, suppliers and employees, and you will give the company the opportunity to return to the fold.