The first half of 2021 began with the promise of a reinvigorated post-pandemic economy, as many businesses reopened and people started returning to work. Unfortunately, the uptick of COVID-19 Delta variant cases has caused many of those businesses and their customers to grow increasingly wary of an economic and social comeback. Today, there is widespread concern that the near future will look more like 2020 and a society awash with social distancing, masks, remote work, and a challenging business landscape.
As a result, small businesses must prepare for potential economic turmoil in the coming months and into 2022. The good news is that this time we are armed with the lessons learned from the last COVID go-around. With that in mind, here are six tips that small business owners should immediately consider to survive the next wave of COVID-19.
Evaluate Your Business Costs: Small business costs are skyrocketing with unreliable supply chains, increased shipping costs, climate change impacts, recruiting challenges, salary demands, technology investments, and other expenses, leaving many wondering how to survive. It’s time to consider how your current pricing strategy compares with the overall cost of doing business. Do these numbers align, leaving your company profitable, or do you need to make changes?
Adjusting your pricing doesn’t have to mean increasing prices. If your customers are feeling the pinch during this wave of COVID, bringing down costs may inspire additional customer loyalty and retention, leaving you better able to meet long-term business demands.
Assess Current Business Model and Practices: Start by considering your business model and practices—are they appropriate for the current state of the market, or do you need to pivot and make changes? Some potential adjustments to consider are:
- Online Business Models: If your business does not yet have an e-commerce or digital option, now is the time to incorporate one. This option is growing increasingly important for many industries, including medical, legal, retail, and restaurants, to name a few. The need for a digital presence will increase as consumers rely on delivery services and other ways to avoid face-to-face interactions.
- Health Regulations: Continuously evaluate CDC mandates at the national, state, and local levels to ensure that you are compliant and that you are communicating changes to your policies through multiple channels.
- In-Person Guidelines: If you are in the business of seeing customers in-person, including businesses in the home-services, medical, entertainment, and education spaces, consider the option of vaccine and mask mandates for customers and employees. These decisions are sometimes wrought with challenging feedback and are not right for all businesses; however, waiting to make them can deliver significantly greater negative outcomes.
Understand Customer Needs: Customer needs have understandably changed throughout COVID-19. Stay in touch with your customers by reading reviews, emails, or even conducting surveys to take regular pulse checks of what they need moving forward. These insights can help determine which adjustments will keep your business moving forward.
Can you offer new products or services or deliver existing services in new ways? For example, can your retail store use e-commerce on mobile or social media to grow sales? Or can your restaurant implement delivery and outdoor options immediately to ensure that customers feel safe and comfortable while dining?
Streamline and Recalibrate Operations: Are your operations running as lean and efficiently as possible, or are there areas that you can streamline? Closely evaluate your chain of command: will you need to cut team members or grow your staff? For example, if you foresee a decrease in in-person patrons at your store or restaurant, consider reskilling your current staff to answer phones, emails, manage your social media channels, and work on the delivery process.
This is also an excellent time to evaluate what technologies your team is currently using. For example, is your e-commerce platform streamlined, mobile-enabled and user-friendly on the user side and the backend? If not, be sure to consider other options that may be more efficient and cost-effective.
Small retailers, in particular, saw a big bump in online sales during this past holiday season—an average 104% increase over last year. And from all indications, e-commerce will remain a top trend for a variety of small businesses moving forward.
Assess Vendor/Consultant Relationships: Take a holistic look at your business relationships, and ask the following questions:
- Which vendors and consultants are you paying? And are they all necessary? Can those contracts be renegotiated?
- Does your budget match the trajectory of your business?
- Did you feel that each of your vendors provided enough support during the first wave of COVID-19? And will they continue to do so?
This will vary across different kinds of businesses. For example, if you are heavily reliant on a supply chain, consider negotiating contracts with your delivery partners to see if you can secure better rates. This extends to your marketing and sales budgets, as well. Do you expect your business to be positively impacted by a second wave of Covid, as were the private education, take-out dining, liquor, and gaming companies the first time around?
Consider increasing or decreasing your marketing budget, depending on if you believe there are market conditions that will enable you to capitalize in the coming months. You should also evaluate your current marketing strategy to determine if it accurately reflects the services you currently offer to your customers. If your business offers a differentiator that is especially helpful given the current times, start increasing your marketing to highlight it and ensure you’re capturing the mindshare of your audience.
Review Your Cash Flow and Consider Additional Funding Options: Consider the impact of the upcoming Delta variant on your cash flow. Do you have enough cash on hand? Be sure to stay on top of your accounting to ensure you can stay afloat, even in the worst-case scenario.
When it comes to funding, consider what type is right for your business. For example, will you need a new line of credit or a Small Business Administration (SBA) loan? Take your time with this decision to determine what kind of financing you will need to move forward and stay open for business during turbulent times.
Small businesses are the economic lifeblood and growth engines of American communities. By making a concerted effort to revitalize your business strategy and evolve based on your customer needs, your small business can survive both the near- and long-term effects of the Delta Variant and any other significant challenges the future may bring.
Vikas Dua is the Chief Operating Officer at Ocrolus.