From China to New York City to Canada, government responses to the COVID-19 pandemic create domino effects for many businesses. In locations under mandatory lockdown, production shutdowns impact sourcing for supplies, materials, equipment and merchandise. Elsewhere, social distancing constrains activity, leading to lost customers regardless of industry. Areas have closed restaurants, recreational and entertainment venues, leading to unemployment and impacting businesses that are selling consumer goods online.
Governments make their decisions based on recommendations from virologists and public health agencies such as the Public Health Agency of Canada and World Health Organization. The public health experts use models to forecast potential scenarios, including the effects of measures such as social distancing, and account for factors such as a vaccine not being available for as long as a year.
Making quick changes must become the new normal for business owners. Use these strategies to adapt.
1. Cut back expenses
The biggest thing is to cut costs immediately. Trim down anything unnecessary, anything you don’t have a contract for. The world is on pause right now and there’s nobody with a reliable prediction about the next several months.
2. Find alternative sourcing
If you have suppliers exclusively in China, look for other sources. Businesses should use this moment to diversify by finding alternatives in different geographic regions, since it's likely that sourcing will be affected worldwide.
3. Adjust processes
Can you adjust production, operations or services to supply a product or service that has become scarce? This could solve both a supply and a demand challenge. For example, a Toronto company quickly made small changes to production during the 2003 SARS outbreak to produce hand sanitizer instead of lotion.
Figure out if you can tweak your process and produce something that fits into what the market wants while using the sources you have.
4. Seek financial relief
Find out if you can get financial help as new programs are available.
5. Put the downtime to use
During unprecedented times, it’s difficult for small-business owners to act beyond survival. One can take advantage of the extra time to sit down and think
Business owners don’t often have downtime, which is necessary for creative thinking and strategic planning. This is a good time to de-focus—instead of looking through the microscope (how to meet revenues), look into the telescope (what does 2023 or 2025 look like?). Think about what it's going to take to fulfill that plan — perhaps a new skill set — and use the downtime to learn it.
This article was adapted from an earlier version https://amex.co/2Va3xQk
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.