With the advent of this latest super flu bug impacting markets across the world, small business owners should be thinking how to analyze their business weaknesses so they don't fall victim to changes in their market that are unavoidable. China and Italy are in a virtual shutdown, with flights prohibited from Europe into the United States. Most states in the U.S. have declared states of emergency. Panic is driving stock markets to plummet, hoarding at the supermarkets and cancellations of many major sporting, concert and fundraiser events.
Mass panic is starting to set in. Whether you’re taking part in that panic or trying to keep a clear head, the fact remains that things are going to get dicey for a while. Are you prepared?
If not, you need to push these priorities to the front of the line. It’s wise to hire a business coach right now to establish a strong plan that can take the CV threat in stride.
A Far-Reaching Problem
Don’t be fooled into thinking just because your product is not made in China or your clients buy your services online that you are immune to COVID-19’s global effects. Take, for instance, the limo service I know that has lost 50 percent of its revenue because most of its sales are focused on airport rides. The devastating cuts in travel by their biggest business clients has crippled cash flow the last two months as more and more people are fearful of flying.
This client of mine is riding it out for now, but a few more months of this could prove disastrous. What's the problem here? Mainly focusing on single sources of income or business models with products or services that don't take advantage of diverse client activity or behavior.
Ask yourself these questions:
- Where do my clients come from? Who are my biggest clients or referrers' of clients?
- How do they find my products/services? What mediums and channels are used to find my business?
- What single points of failure exist within my market? What kinds of market changes am I at risk for currently?
- What things can I change about my product/service that would make it more robust to market change? What could make my products or services more flexible to a change in markets?
Knowing where and how you originate sales is important because they can disappear if you don't diversify and maintain. Having a Marketing Data Strategy will help you understand clients, avoid wasted marketing efforts and help you think deeper about you business' impact to the market and how it can be better.
Small Businesses are on the Front Line
If the coronavirus causes workers to take sick days, officials to order quarantines, and customers to stay away, it will be tough on all American companies, but for small businesses in particular, it could be catastrophic, paving the way for long-term effects on daily life and work in local communities, says the NY Times.
Keep in mind many small businesses, such as local restaurants and retailers, operate leanly as it is, balancing on tight profit margins with just enough employees on staff to get stuff done. They may struggle to provide sick pay and at the same time are encountering slow business due to widespread illness or an overabundance of public caution.
Small businesses are on the front line of this new health crisis, suffering under the impact on consumer demand, which in turn affects the economy. While there are some government resources under way to counterbalance the effect on small business, there could be gaps and uncertainty involved as new policies are navigated.
Whereby large companies and corporations typically have more resources and can balance this gap out, COVID-19 can be potentially devastating to small business. The key is to plan, not panic!
While China – ground zero for CV -- has it much worse than us, with small businesses on the verge of collapse, the U.S. and China do have one thing in common: Both countries are heavily dependent on small business for everyday goods and services; in China, 80 percent of business is small business; in the U.S., that number is even higher at 95 percent, says USA Today.
Even if you haven’t felt direct effects of the coronavirus on your small business, you have to start planning for a downturn as a result of this super bug and any future ones that may come along. Of course, it’s best if you already had a plan in place, but first things first!
A recent poll shows 52 percent of small businesses revealing they are already taking measures to prepare for an economic slowdown, by:
- Increasing pricing
- Changing suppliers
- Decreasing operational costs
- Protecting cash flow
As we talked about earlier, focusing on single sources of income or business models with products or services that don't embrace diverse client activity or behavior can prove disastrous at any time – not just in the face of a pandemic. Stockpiling clients and diverse revenue streams for business growth is critical, because you never know when you’re going to need them.
Can you honestly say what you would do if you lost 25 percent of your clientele, or your top three clients suddenly didn’t need you any longer? Do you have healthcare clients, or web design clients, or university clients, or professional sports clients that are pulling the plug on your products and services because they’re on lockdown?
Saying you’ll cross that bridge when you come to it is foolhardy. Planning for the inevitable starts now. And hey, if it all ends up being overkill and the coronavirus dies out just as fast as it started, at least you’ll have a plan in place to weather the next storm.
I’m not here to be all doom and gloom, but things can change for your business in an instant. Take a good long look at your products and services, ask yourself the tough questions, and actually do something about it. There’s nothing you can do to stop a pandemic. But you can make changes to safeguard your business against one.
Don’t know where to start? Call us for a free 30-minute consultation with one of our business coaches to get you on the right track.