Coronavirus has revolutionised how we do business
June 4, 2021
The pandemic pivot game – to stick or twist with your new business model
Coronavirus has not just changed the way we live our lives, it has revolutionised how we do business. Some of this commercial adaptation is permanent, while other revisions may only be temporary. Some will only work in the short term, others may have much longer term benefits.
For some businesses, new markets have opened up and some peripheral activities have become mainstream. For others, core activities are either no longer possible or have become unprofitable.
The permutations are endless, uncertainties are legion and the risk of making the wrong calls considerable, with potentially serious financial consequences. Even the clearest of crystal balls can offer only a hazy answer to the multitude of questions business owners and managers are asking themselves as we start to emerge from the crisis. What to do? Which way to jump?
1. Cool headed analysis
The place to start is with a root and branch examination of the past fifteen months: what has happened to the business, when did it happen, why did it happen and what effect has it already had on finances and what will it have on commercial prospects? There is nothing like a timeline and consequences analysis to clear away the fog of the crisis and get events into perspective. There are innumerable questions, which need to be asked. Few offer easy answers.
2. Successes and failures
It does not matter whether the decisions you took during the crisis were strategic or forced on you by circumstances. They were taken, but did they work or not? Managers should make time to stand back to review their pandemic stewardship as objectively as possible.
3. What did competitors do?
Take a look around the market, learn from others. What worked for them and what bombed? Can you imitate their winning strategies? What did your competitors copy from your management of the crisis? If they were policies you now do not rate, maybe you should review them again?
4. Pricing
The economy is expanding from a low base still 8.7% below pre-pandemic levels by the end of March 2021 according to the Office for National Statistics, while consumers are supposedly desperate to get out and spend but has your market really stopped being price sensitive? Can you hike prices to claw back losses during the crisis, or to compensate for soaring input costs? Or will you have to cut prices to follow your competitors or to attract new customers and clients.
5. Product ranges and service lines
Are your products and services still relevant to the changed market and do you still have sufficient working capital to support the full range of your pre-pandemic activities? If not, how do you decide what to dump and what to keep? Should current profitability be the decider, or future potential?
6. Labour shortages
Unemployment may have fallen back to 4.8% in April 2021, but advertised vacancies soared to over 1 million that month. Industry representatives right across the economy are complaining that they cannot hire, which is no great surprise if estimates are right that 1.3m people of working age have left the UK since late 2019. What does this mean for your business? Can you still service your market like you want to, or will you have to scale back expansion plans or even look to cut activity levels?
7. Supply chain issues
The pandemic has caused havoc in many supply chains both within the UK and around the world, forcing firms to adapt to avoid disruption. As things return to something like normal, should you and can you revert to your original arrangements, or do the new procurement deals work better for you?
8. Remote working
In some industries and some activities within them, remote working was not an option. In most, however, some or all staff have now spent over a year finding the best way to operate within the WFH revolution. For employers, there is the prospect of significant fixed cost savings in the medium and longer term if they continue with remote working, even using a hybrid model of splitting working weeks between home and a dedicated work environment. But what will that do for staff morale, mental health and retention?
9. Funding
The various government Coronavirus support loan schemes have lent over £70bn to more 1.53m companies, or around 38% of all UK businesses. This has been a lifeline for many, but could they turn out be a millstone that will limit the ability to raise further facilities to fund future growth and will the repayments cripple business investment? Both possibilities leave business owners with a conundrum: how much precious cash flow to devote to repaying the loans.
Where to start?
Far too many questions, for sure, many of them involving inter-linked issues as the economy moves unsteadily into the post-pandemic phase. With all that is going on, it is highly unlikely that most managers can find the time to consider and solve these often-philosophical problems on their own. Calling in expert independent advice is surely the right way forward, but it must be done sooner rather than later. None of this will get any easier as time passes, while opportunities may be missed if you delay.
If your business is facing these issues, we are here to help you to find the best way forward. We are comfortable with these sorts of questions and we love assisting people to answer them. Across the Group, we have Partners who are here to help you to find the best way forward. We find that the earlier a business speaks to us, the more options are available to address the challenges being faced. Our ethos is to work with people to find solutions, not to judge them. Please speak one of our Partners at your nearest office.