Plan for several scenarios
The timeline for social distancing and the length of the impact that will have on our economy is unpredictable. The negative impact could last for several months (3 to 6 months) or it could last for many months (6 to 12+ months). Think about what you would do today to enable your business to withstand a crisis that could last as long as either one of those timeframes.
Regardless of what happens with the virus and our level of social distancing, a recovery in confidence and spending will take time, so expect a prolonged period of at least slightly reduced demand compared to pre-crisis levels.
Look to China for a case study in how long a recovery might take
In China, where the virus has been contained, a return to fairly normal operation has occurred. As cited by HBR:
“Unsurprisingly, sectors and product groups recover at different speeds, thus requiring distinct approaches. Stock prices fell across all sectors in the first two weeks that China’s epidemic accelerated, but leading sectors, such as software and services, and healthcare equipment and services, recovered within a few days and have since increased by an average of 12%. The bulk of sectors recovered more slowly but reached prior levels within a few weeks. And the hardest-hit sectors — such as transportation, retail and energy, representing 28% of market capitalization for China’s largest stocks — are still down by at least 5% and showing only minimal signs of recovery.”
Pivoting from an offline to an online business
Some businesses can pivot from an offline to an online operation, operating virtually, selling products through e-commerce websites, or transitioning into a new line of business that is in particularly high demand right now (see “sectors positively impacted” below).
Operating virtually will be a change for many entrepreneurs and their customers. However, operating virtually is becoming the norm during the crisis and therefore customers are more likely to work with you virtually. This includes meetings through phone calls or video conferences (using services like Zoom).
Why has my business been impacted so much, and am I alone?
Most sectors have been negatively impacted by the crisis. This includes companies that provide services or sell products to both consumers and businesses.
Consumers have retracted spending while they wait to see if their incomes will be reduced by their employers due to layoffs and salary reductions. Consumers are also seeing their savings decline due extremely negative performance in the stock market. It will take time for consumers to regain their confidence. It is expected that spending for consumer goods will rebound in China in the second half of 2020 because they got the spread of the virus under control fairly quickly in the first quarter of 2020. The United States has been slow to respond to the spread of the virus, and as such, the recovery of consumer spending may not happen until 2021.
Many businesses are seeing their revenues decline due to a disruption in their normal business operation. As such, businesses that rely on other businesses to give them income, such as consultants, have seen a delay in new project starts and a slowdown in sales. Some have seen their existing contracts get cancelled as businesses take more aggressive cost cutting measures.
Innovative ideas to pivot income stream
Looking at what companies have done in other countries that have had the virus for longer is helpful for finding ideas on how to pivot your business to be more resilient during the crisis.
Redeploying in-store beauty advisors to become online influencers and use social media apps to interface with customers virtually and drive online sales. Source: HBR
Use social media as a channel to communicate with customers: You can create a Custom Audience of your customers by uploading you customer list into Facebook. Every time you make a post, boost it to your customer base to ensure they see the post. This should cost very little each time you post (about $2 for every 100 customers you have). This keeps you top of mind with them. Source: HBR
Provide employees and friends with social media content (images and text with links to your website) that they can post on your behalf so your message can get spread effectively to their friends. Source: HBR
Shifting operations to provide a good that’s in low supply. Tito’s Vodka is retooling its operating to product hand sanitizer. Source: KXAN
Incorporate messages around “we’re thinking of you” into your marketing and customer communication. Source: Bain
Advertise products typically sold in stores online on social media on a Shopify website. Start advertising on Amazon if your products are already sold through Amazon.
Create digital touchpoints to showcase your products, through live broadcasts, short videos, and even Augmented Reality or Virtual Reality to stimulate demand and consumer purchase intention. Source: PWCCN
Post regularly on social media to benefit from the rise in social media usage during the crisis. Source: eMarketer
Convert in-person conferences into digital conferences where content is live streamed. Source: eMarketer
Education companies and healthcare providers turn to online education and Teladoc apps to share their knowledge and provide their services. Source: FastCompany and eMarketer
Cancel offline marketing activities and reinvest those dollars into digital marketing. Source: Divante
Provide free local delivery options to customers interested in buying your products. Source: Divante
Provide free online video consultation services to help customers make purchasing decisions. Source: Divante
Sales associates live streaming daily on social media through their personal accounts to promote their company’s products. Source: Vogue Business
Invite existing customers to a group chat where they can browse new products and get directed to easy ways to buy them. Source: Vogue Business
What to do if you can’t pivot your business
Some businesses are unable to operate at all when there are shelter-in-place and heavy social distancing orders. We’ve seen that customers who provide trade services to consumers have had a hard time operating because many people don’t want people they don’t know entering their homes.
You started your current business because you had passion for your idea. The drastic change in the economy will pass. In the meantime, the easiest way to supplement your income may be to get a part-time job that helps you pay the bills. This gives the economy some time to recover and get back closer to normal operation, at which time your business may flourish.
Some potential part-time jobs to consider during the crisis to supplement your income can be found here:
Delivery driver for grocery store, restaurant, or logistics company (e.g. Amazon)
Apply to work at a grocery store
Apply to work at a big box retailer (e.g. Walmart)
Find freelancing work by joining freelancing websites like Upwork or Guru.com