As the majority of businesses struggle with the economic chaos of COVID-19, others are thriving despite the challenging climate.
Agile start-ups are meeting new demands and some industries are seeing revenue streams from unexpected angles. There are always businesses that do well in a bad economy, and if you’re lucky enough to be one of them, your challenge is to embrace the opportunities while keeping a cautious eye on the future.
By cementing your foundations, you can maintain your advantage as the market evolves. And evolve it will.
One of the fundamental pillars of continued success is your business plan. If you have a plan already in place, you need to revisit it and adapt your model as things change. Start by re-examining the core areas, such as cash flow forecast and cost management.
Usually, a 12-week cash flow forecast is the most accurate approach. However, in times of flux, you want to look beyond any immediate boom period and anticipate what lies ahead until at least the end of the year. It’s not easy, but do some “what-if” scenarios around how the behaviour of your customers and suppliers may change.
If social distancing and health concerns settle down, will they interact differently with your brand? What cash management measures can you implement now to build reserves? Consider essential versus non-essential spending and pare back unnecessary expenditure.
The same goes for operations. Make sure you’re working with the most streamlined structure possible, and check if there are more cost-effective licensing or sponsorship options available — it is a good time to renegotiate in these areas. Focus on finding (and retaining) superior talent and explore the possibility of outsourcing certain functions.
Crisis planning is a priority
The global scale of the coronavirus pandemic is unique ... but there are numerous types of crises that can put your organisation at risk. Some of these include natural disasters, technology failures, financial instability, and employee negligence.
In PwC’s 2019 ‘Global Crisis Survey’, 41 per cent of companies that emerged stronger after a crisis had allocated budget to crisis management beforehand — and 39 per cent saw their revenue grow as a result. A basic SWOT analysis is a good place to start — just don’t be tempted to concentrate on the positives.
Staying strong means understanding the threats and designing comprehensive mitigation strategies to overcome them. When things are their best, you need to plan for the worst. Spend time understanding the different risks and devise responses to safeguard your business continuity.
Build strong relationships
Just because customers are relying on you for their current needs doesn’t mean you can take their loyalty for granted. You want to remain number one if the market opens up or your product/service is no longer a must-have.
Make excellent customer service a priority, and show your gratitude through flexible payment terms, loyalty schemes, added value, and discounts where appropriate. How you treat your suppliers and staff is equally important.
Suppliers will be facing their own challenges; discuss how you can support each other and build mutually beneficial connections moving forward. Investing in your staff is one of the best decisions you can make.
Identify training needs, listen to their feedback, and make sure to consider their well-being during a time when they are being asked to work in unprecedented ways.
You need an effective communications strategy to stay front of mind. There are multiple marketing channels available and you don’t necessarily need a big budget. In fact, now is a great time to double down on your marketing efforts while other companies are disappearing from view and consumers are craving content.
This is especially true with digital, as people consume more online media than ever and platforms are reducing their rates to entice advertisers.
Scott Cairns is Managing Director, Creation Business Consultants.