No doubt about it, we are living in interesting times. I’ll bet that in 20 years or so, people will be telling their grandchildren stories about 2020. Life and business after COVID.
As I write this, in late March of 2021, it’s beginning to look like life is stabilizing. Yes, there’s still masks and vaccinations and a lot of people unemployed. Thankfully infection and death rates are dropping as more people are vaccinated. Countries are getting back to work. Maybe soon we can travel internationally again without too many restrictions.
In the meantime, we need to get back to work. Some businesses found that all or part of their business has been on hold during the pandemic. So, the million-dollar question:
How Do We Restart?
First, check on your customer base. Can you reconnect with previous customers? Or do you need to find new ones? Can you connect with them the same way you did in 2019? Or do you need to use new methods, such as email or a newsletter?
Secondly, assess what your customer needs today. Are your previous products still in demand? Do they need tweaking, or do you need to develop new products? If you need new products, you must do your market research.
- How are your customer’s needs different?
- What are your competitors doing?
- How is the market different from 2019?
- Is there anything extraordinary that you need now (new resources, equipment, software) to be competitive?
Thirdly, based on what you’ve learned do you have everything you need to be operational now? Or do you have some rebuilding work ahead of you? If you are rebuilding, what areas of your business can be operational now? There may not be any. In that case, investigate funding sources so you can get up and running as quickly as possible.
Answering these questions will help you become productive faster. 2020 was such a large change for the world that any company operating like its 2019 is at a huge disadvantage.
Flexibility is Everything
Flexibility, if we learned nothing else from last year, I hope you learned that. Business after COVID is going to be different. Flexible companies survive uncertain times. We’ve known the market moves quickly for a long time, but 2020 gave us new insights into how fast things can change.
- Government lockdowns imposed with no warnings.
- Lockdowns extended with no clear end dates.
- Frequently changing rules as to onsite customers or eating in permissions.
- How to balance departmental coverage and work from home restrictions.
- Needing to equip remote employees with proper equipment.
- Disruptions resulting from sick employees or management.
The conventional view is that smaller companies are more flexible, but larger ones can handle big changes more effectively. I think what we’ve learned this past year is that it’s the company that matters. Company culture has a bigger impact on a firm’s ability to withstand and benefit from changes than size.
Those companies that were able to think beyond their regular processes and to focus on how to serve their customers in this new environment were the ones who were most successful. I am going to exclude tech companies (including Netflix and Amazon) in this group. That is because given the situation, how could companies such as Zoom and PayPal not prosper? Let’s look at a few that were not part of the online-tech-entertainment triad.
A Few Who Took Advantage of 2020
The Home Depot, based in Atlanta GA, had a jump in sales last year, according to Financial Times (ft.com, June 19, 2020.) While part of their increase is due to their fortune categorization as an “essential service”, which allowed the stores to remain open. That does not account for all of the increased profits however. Homeowners not allowed to go into work, in many cases, spent part of their lockdown time doing DIY projects around the house. Home Depot took advantage of this trend. Competitor Lowe’s saw similar increases.
Nestle, based in Switzerland, saw a boost in profits largely due to consumers stocking up on staples. Between pet care products, coffee, and frozen food; first quarter profits were up. And because consumers could not go out to eat, and had limited choices for food delivery; in home meals became popular again.
Another corporation that took advantage of the cultural changes was Lululemon, based in Vancouver, Canada. With so many people working from home, traditional business clothing retailers did not see the same number of customers as in 2019. With its casual and comfortable athletic/leisure wear, Lululemon clothing was made for the remote worker. They saw a 70% jump in online sales in the first quarter of 2020.
Office cleaning companies also saw an increase in business in 2020. With the concerns over disinfection, businesses such as Corporate Cleaning out of Columbus Ohio, have seen huge increases in new customers. A particularly bright side to this surge is that such companies have needed to hire new workers, giving opportunities to some who were laid off due to COVID-19.
There’s been a lot of absorb over the past year. And while no one can predict the future, I think there are some important take aways from last year.
- It is important to put some profits aside. Our parents and grandparents reminded us to “save something for a rainy day.” This applies to businesses as well. Work with your accountant to build an emergency fund.
- Consider ways to pivot your business. While I’m not one to jump onboard with trendy terms, “pivot” is a good description. Look into ways you can expand or adjust your business should markets change. Perhaps it’s selling online, delivery, or expanding your service offerings. Research a few options that make sense for your business. You don’t have to act on them right away, just another arrow for your quiver.
- Determine ways to lower your overhead now. Does everyone need to work from a central office? Have you reviewed your recurring costs such as internet access and accounting services to make sure you are getting the most for your money? It’s recommended to review such services at least every other year anyway, so don’t put it off.
- And while you’re reviewing business services, check your insurance policies. Do you have appropriate coverage? Check that you have business interruption insurance and an umbrella policy. Insurance can often seem like a nice to have, but it’s one of those expenses that you rarely appreciate until you really need it.
COVID isn’t the last big business change you’ll see. Take advantage of your experience this past year to make sure you are prepared for the next emergency. And don’t forget to wash your hands.
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