Because of the sudden spread of Covid-19 coronavirus in the beginning of 2020, our life has changed to such an extent that we can not ignore anymore.
Of course there is many talk everywhere about the situation or about the virus itself. Here and now, I only mean to help you regarding your business: what is it that you, as an entrepreneur or business owner, can do to limit your losses or even become stronger after this situation.
Because there is a situation, we can not deny it:
- Schools closures
- Travel limitations
- Changes in people’s shopping habits
- Shops, clubs, restaurants etc. closed
- Human contacts restricted, more and more countries and states in lockdown
What Should You do?
There are two very predictable reactions that you should avoid at any price. Of course if you would like your business to prosper on the long run.
- Do nothing. This is the kind of blind attitude that many people would probably take to look at even the end of the world. You might think this situation is all exaggerated and you might even be right about it. But whatever you think, the attitude of people, i.e. your customers, have changed overnight, and as a responsible leader or entrepreneur you have to act in response to this. At least to review and analyze your situation.
- Be afraid. Fear is a bad counselor. Anyone who is afraid expects danger from everywhere and therefore cannot make rational decisions in a given situation.
Coronavirus And The 3 Types of Businesses
Naturally, all businesses are unique. And this uniqueness is the most important factor for you and it serves as a starting point as for how to handle the economic effects of this coronavirus. The most important thing is to look at the numbers and data of your own business, analyze them, and let your action be driven by that, instead of reacting to general news.
But since one can not advise everyone in an article, that is why it is very important to define the position of your own business based on the following 3 groups. The good (or bad) news is that you can definitely see which group your business falls into, even after a couple of days of this crisis.
- Those who will be almost completely zeroed out. Here I am talking about the businesses whose income has plummeted suddenly or even went down to zero. Tourism related businesses fall almost certainly in this category, as do restaurants and shops that don’t have an online service and operate in an area that is closed down.
- Those who will win big. No sarcasm here, and no negativity, but there will definitely be winners of this situation. Think of news portals, health equipment manufacturers or dealers, for example. However, this may also include companies that are well-established online in an area where personal shopping has been almost completely eliminated due to store closures.
- Everybody else. Most businesses will probably fall into this category, so I would mainly address them in this article.
If this coronavirus situation brings you extra income, my advice is to save up. And you and your team should work your butt off rather than irresponsibly expanding your business in staff or other areas. For any business, as surprising as it might sound, sudden growth can be more devastating than a downturn.
But if the opposite holds true for you, and all you can see, even based on objective data, is that this is the end of the world or at least your business, then I would suggest you slow down as much as you can, at least for a while, and follow my tips below. Of course, what you should do depends very much on the actual situation that you are in and on your savings. But in an economic sense I wouldn’t think an emergency situation will last more than a couple of months.
How Will The Market Change?
I can’t stress enough that money always comes from real people. Even in this situation, it will still be those individuals who make the decision whether they buy from you or spend their money on other products / services.
Three things can certainly be said about this:
- People are afraid. Unfortunately in this whole situation people, like your customers, are driven by fear. And this is also true for their economic decisions; where and what they spend their money on.
- In general, there will be less money in the economy. Countries are being shut down – it would be kidding ourselves to believe that this will not affect the buying potential in the short and medium run. And unfortunately, fear plays a major role here too: when someone loses their job or are afraid of losing their job, they spend their money differently then when, at least in their mind, everything is fine.
- Because this virus-induced situation has been heavily linked to people-to-people social interaction, online orders are expected to soar. This will be true in the short run, but probably also in the long run. Once this viral hysteria will have subsided, many will remain with this form of purchase.
What Can You Do?
- Don’t let fear drive your decisions. Before making any business decision, look at the data, the numbers.
- If there is no situation, there is no need to react. All in all, after looking at the facts and data, it may not be necessary to change your business behavior. Don’t feel that just because there is something that seems to be all over the place and everyone talks about, you have to do something too. You may or may not.
- Generate income from anywhere, right away! This should be your very first step – even throwing everything aside. In a changed situation, we need to change the way we operate. But money is also needed. There is no time for marketing philosophies or long-term testings now. If you lose revenue, then look at what you can sell, something that you can make money from. Try more options! You need income. Believe me, cash flow is the best medicine for all economic troubles.
Cash flow is the best medicine for all economic troubles.
- While you try to sell things that you have never sold before as mentioned above, be prepared to increase these new sources of income, rely on them, in part or completely, in the future!
- Talk about the coronavirus! This may sound like an ugly thing to do, but your customers are thinking about it right now, and that’s almost the only thing they care about at the moment. Talking about it may help you break the communication barrier.
- As much as it is possible, offer online services. If you read my articles, it is very likely that you already make money online. If it is so, look for new opportunities to increase your income. In this present situation, to be honest, the more you are in traditional face-to-face sales, the more exposed you are to difficulties.
- There are two things you absolutely must not do in this or in any crisis situation: do not reduce advertising and development spending (the latter means learning or self education for many small businesses). There is no crisis where you could benefit from reducing the money spent on these two things. With advertising, you’re likely to be able to reach people even more effectively, precisely because more businesses are downsizing currently and thus you’ll have less ad competition. By development and learning, you can prepare for a situation when the economy will normalize and the weaker will fall out.
- Save up! We don’t know what’s coming. It is a personal opinion, but this situation has so far been more about hysteria rather than rational decisions. That is, whatever you earn today, should be part of your saving plans for a potentially more difficult situation.
- If you ask me, I wouldn’t suggest sending people away from your company. Though there can be certain situations when this may seem to be a logical solution, in my opinion, in the present situation this is not the case very often. One of the strengths of your business is your co-workers; a good team of employees will take you through any situation. If your people see that they can trust you and that fear does not dominate the workplace, believe me, they will thank you! (Of course, that doesn’t mean you can’t get rid of someone you can’t count on.)
- Analyze the situation every week! Seeing that how much the environment has changed in the last week or even just one day, and how much is still hanging in the air, what seems like the best decision today could be a business suicide in two weeks time – or vice versa.
AND I’M BEGGING YOU, stop reading news sites and watching or listening to the news! They won’t tell you anything that will help you make more money.
Important note! You are solely responsible for your income and for the operation of your business or company. This article is not intended to be exhaustive nor should any discussion or opinions stated here be construed as business advice.