The Covid-19 pandemic has hit Britain’s 5 million small businesses hard.
8.9 million workers are currently furloughed and the vast demand for Bounce Back Loans is creating a huge backlog in some areas. It’s even forcing small business owners to apply for Universal Credit at £94.25 a week.
The good news is that the lockdown is beginning to ease, with non-essential shops now opening. But how can you keep your small business afloat in these uncertain times? The answer could be to learn from the hospitality industry to diversify your offer. And that digital transformation you’ve been putting off? The time is now.
Pivot your business
Businesses who are weathering the lockdown best are those that have spotted the opportunities to change their strategy and pivot successfully. Take the team behind Homage2Fromage, an all you can eat cheese night. They repackaged the tasting experience for home consumption and now send out cheese boxes to their fans.
Restaurants have been among the hardest hit by the lockdown. But a pivot towards takeaway menus and providing meals for essential frontline workers has seen many stay afloat through the worst of the crisis. Define your pivot strategy by identifying a part of your business that continues to make a profit or leveraging an existing website asset to move your business to a more ecommerced based model.
Offer delivery options and voucher schemes
The food delivery service is now worth over £8.5bn in the UK with European delivery firm Just Eat gobbling up GrubHub in a deal worth $7.3bn. It was a desirable option before lockdown and has grown exponentially since then. With takeaways unlikely to be going away anytime soon as UK pubs restaurants remain closed until at least July, now is the time to offer your own delivery service.
If that’s not an option for your business, a buy now redeem later voucher scheme will benefit both you and your customers.
Move your business online
The chances are that you or some of your team have been working remotely throughout the pandemic and that Covid-19 has been the wake-up call you need to start moving your business online.
Digitally focused online businesses have been far better placed to weather the storm, offering a range of services to replace those of shuttered businesses. Almost any business can move online with the right technology and platforms, so use your learning from successes and failures in working remotely.
If you’re thinking of going self employed as the pandemic continues to bite, ensure that your business has a strong digital component and can be moved wholly online in the event of another lockdown.
Get connected and get social
If you don’t have a way to monetise your online services, there are still ways you can add value for your customers.
Staying active on social media has allowed shuttered businesses to start a conversation with their customers, to update them on what’s happening and keep them engaged with your business. Share free resources including online tutorials and run quizzes. Give something back to your customer base and encourage them to follow, like and comment.
Those customers can then use schemes such as Instagram’s ‘Supporting Small Business’ stickers to show their support.
Evil Genius Brewery in the US started a virtual tip jar for laid-off workers and was able to give them $500 each. Demonstrating corporate social responsibility and making creative and effective use of the internet through lockdown and beyond is a smart strategy for small businesses to adopt.
Think innovatively in a changed environment
Throughout history, pandemics have been followed by a wave of innovation. For example, the SARS outbreak of 2002 was the catalyst for a leap forward in ecommerce.
Working from home is likely to become part of the ‘new normal’ and has already prompted a wave of innovative business thinking. Ideas such as contactless delivery and smart ways of cutting through the marketing noise have characterised the small businesses and startups that have survived and thrived in lockdown.
Use your downtime effectively
If you are furloughed, there’s no reason you can’t use your time productively.
Small businesses tend to fail in a crisis because of liquidity and cash flow issues. While the government schemes have moved a long way to supporting SMEs, now is the time to think about improving and repurposing your business in ways that make you more resilient in the event of another lockdown.
Make your team feel valued and productive by involving them in moving the process forward. Review, assess and care for your team whether you’re taking your business further online or pivoting to a brand new normal and your business will be well placed to stay afloat through lockdown and beyond.
Nick Brown is a partner at Brighton based accountants Plummer Parsons.