Our world will never be the same again. The Great Lockdown has upended the way we live, work, and eat. Face masks and social distancing are the new normal. Unemployment has soared, and vast numbers of people are working from home.
The Great Lockdown is the name the International Monetary Fund (IMF) gave to the current economic crisis caused by the COVID-19 pandemic.
According to research carried out by data analytics firm Dun & Bradstreet, the crisis has affected 90% of American businesses.
But the situation seems to be changing.
Take a look at this map:
If you’d like to learn more about the dates when States reopen, visit our Reopening Guide.
The blue and green colored areas indicate states that have lifted many restrictions. The data is valid as of May 11.
So, as the country reopens, what should small businesses expect?
In this post, we’ll address how things could change in the post-COVID-19 world. We’ll also discuss the steps you can take to anticipate these changes and turn them to your advantage.
Secure your finances
Every small business will be affected by the Great Lockdown, but not in the same way. Some will feel the impact of COVID-19 more than others.
Which Small Businesses Are Most Impacted By The Great Lockdown?
The Great Lockdown will keep people away from stores and malls. Many entrepreneurs will face the challenge of declining sales. Sellers of non-essential goods and luxuries will be hit the hardest. But the fixed expenses that small business owners need to pay will not go away. You’ll still have to shell out for things like rent and insurance.
How will you ensure that you have enough cash to run your business?
Here are some steps that you could take:
- Consider taking out a business loan. Believe it or not, a business loan is a great tool to helps strengthen your cash flow and to invest in technology and other resources that can help you get out of this crisis. There are many options, from the SBA and the Government’s loans to business loans offered by other financial institutions.
- Save your cash. Reduce or eliminate all unnecessary expenditures. How can you tell whether an expense is required or not? Continue making the payments that help to boost your sales. And don’t neglect the expenses that help to ensure the long-term survival of your company.
- Lay off workers only when there’s no other option. See if furloughing employees makes better sense. You could think about paying them a minimal amount until the situation improves. This could boost morale and get you off to a flying start when demand increases.
WFH could be the new normal
The Great Lockdown has forced employers to allow their people to work from home. When the COVID-19 crisis is over, will workers return to their offices?
Some will, but many won’t.
Small business owners have realized that WFH (Work From Home) offers many advantages. Employees don’t lose time in making long commutes. Companies don’t need to deploy precious resources on renting and maintaining expensive office space. And there are a host of business tools that can help your team to work remotely.
But working from home comes with its own set of problems. A report from the World Economic Forum tells us what these are:
How can you help your employees remain productive when working from home?
Jason Fried, the co-founder of Basecamp, a company that provides a real-time communication tool for remote teams, has some advice to offer:
- Trust your employees. Don’t try and monitor their activities minute by minute. Instead, keep an eye on their productivity and quality of work.
- Encourage your workers to find a dedicated workspace—“even a walk-in closet will do.”
- It’s vital to separate life at home from work. So, it’s advisable to establish a routine that helps to separate one from the other.
In normal times, small business owners need to be cost-conscious to remain competitive. But the Great Lockdown has taught us that many expenses that were thought to be “essential” aren’t really so.
For example, if remote working becomes a permanent feature, do you need all that office space?
A survey of 500 small businesses carried out in late March by the SMB Group revealed that reducing expenses is a top priority with entrepreneurs.
Which expenses will be slashed?
According to the survey’s respondents, “cuts would be made in what’s called non-employee spending.” This includes office supplies, big-ticket capital equipment, and office overheads.
Prepare to move your business online
If you haven’t already taken steps to focus on online sales, do it now. There’s a massive shift in the way consumers are going to make purchases. The Great Lockdown has forced people to move to curbside pickups and home deliveries.
If further proof were needed about the rise in online transactions, consider the number of people that Amazon has hired in recent months. On March 16, the e-commerce giant announced it would increase the number of its workers by 100,000. On April 13, it said that it would add 75,000 more.
The picture is the same all over the world. A survey conducted in April found that 13% of consumers in Europe were considering online purchases for the first time. In Italy, e-commerce sales spiked 81% in March.
Contactless payments will increase
Many consumers would think that making payments by cash or credit card isn’t safe, as there might be viruses on banknotes, and the point-of-sale terminals used for card payments may pose a health risk. So, contactless payments are the most viable alternative.
The Federal Reserve has started a practice of quarantining physical dollars that are received from Asian countries. Why? A 2014 study by New York University found that dollar bills can have about 3,000 different types of bacteria on them.
Nowadays, there’s an irreversible shift to digital payments across the world. Bain & Company, a management consultancy, points out that the COVID-19 crisis has accelerated this trend.
COVID-19 is Spurring Faster Adoption Of Digital Payments
When the COVID-19 crisis is over, you can be sure that it won’t be back to business as usual, but that’s not necessarily a bad thing.
Entrepreneurs who anticipate and prepare for the changes that lie ahead will thrive and prosper in the new environment.
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