The coronavirus shutdown has left millions of small businesses in the lurch, scrambling to adjust their business strategy execution plan to the changing times. In this atmosphere of uncertainty, the path forward may be unclear and possible solutions unpromising.
Don’t give in to the temptation to throw your hands up in the air or throw a wrench into the business! Now is the time for small business owners and managers to step forward, roll up their sleeves, and lead their teams through the fray.
Think of the city of Milan, one of the hardest hit during the pandemic and the epicenter of Italy’s outbreak. As the city opens up again, officials have announced major plans to make a cleaner, greener city center by adding 22 miles of cycling and walking space. This is an opportunity to make important and long-lasting changes.
This crisis has posed unprecedented challenges. But challenges, well-managed, may provide an opportunity for businesses to take stock, change what isn’t working, and emerge stronger than before.
- Definition: Business Strategy
- Making a Business Strategy
- Business Strategy Examples for Success
- Reorient for Success
- Top Business Strategy Elements: Communication
- Apply for Federal, State, and Private Assistance
- Plan For the Post-Crisis Future
- Is Your Small Business Struggling to Survive?
It seems pretty self-explanatory, right? Well, to put it simply, business strategy is the name used for a series of actions and strategic moves that help a business align themselves to meet their goals and objectives. The business strategy definition lays out how a company will attract its customers, the ways they will strengthen their performance, and more. One of the most key components of a business strategy is a detailed outline of business must be conducted in order to reach their end goal.
As the situation continues to unfold, businesses must stay informed of developments. The impact of the crisis will not be felt all at once and leaders must do their best to prepare for coming waves. If you’re still wondering why business strategy is so important, keep reading.
When developing a business strategy plan template, it is important to consider not only how to survive the crisis in the immediate-term, but reorient their business strategy to new modes of consumption. With this in mind, businesses will position themselves to do well when the market improves.
Here, we’ll explore how a small business struggling to survive can make adjustments to their current strategies to succeed down the line.
The first step in organizing a successful business strategy is to take account of the business’s current position and future needs.
Assess Your Business Situation
Small business owners need to understand where they are in order to understand where they need to go. Take a look at the numbers. What are your fixed expenses in the coming months? What are your normal sales and how severely can you expect them to fall? Sit down with your bookkeeper or accountant to create a cash-flow budget with fixed and variable costs.
Once you have a clear idea of how much you have and how much you need, think through the options. How can your business pivot? How can your business be more efficient? What loans or grants are you eligible to apply for? Imagine the best-case scenario and the worst. How do you want your business to be positioned? Then it’s time to make some tough decisions. It’s not always easy stepping up your business strategy game.
Immediate Financial Triage
To survive this crisis, businesses must stay lean, agile, and flexible. Triage payments, sorting from the absolutely necessary to those which can be delayed a little longer.
Many leaders may look to the payroll to cut costs, but they should proceed with caution. Human capital is vital to a company’s success. If they cut their knowledgeable and skilled workers, it may be more difficult to recover.
Organize Delayed Payments
Some banks, credit card companies or other lenders may be offering payment relief during the crisis. Check with your bank and other creditors to see if you can delay payment without penalty. It’s best to communicate even if it’s uncomfortable. With so many people in the same boat, they will hardly be surprised.
You make also wish to see if utility companies have programs in place to prevent gas or electricity from being shut off during this time.
Reconsider Your Space
If you are leasing business space, ask your landlord if they will give you a temporary reduction in rent or allow you to defer payments.
Consider subletting if your lease agreement allows for it. Perhaps you acquired extra space in anticipation of expansion, but have now found that you no longer need that space. Maybe you have found that your employees can work efficiently at home for a while longer. If you have office space to spare, subletting space can reduce overhead and generate extra income.
Small businesses owing up to $1 million in taxes now have until July 15th to pay their taxes. However, business owners should be aware that they must still file for extensions. Be sure to do so and take advantage of the extra time.
It is difficult to say what effect the coronavirus pandemic will have in the long run. As customers in quarantine have grown accustomed to using online platforms, is your storefront still relevant? Is your business model still oriented toward the needs of consumers?
Develop Multiple Revenue Streams
It’s time to get creative. Businesses need to consider ways of supplementing their income. What extra services can your business provide? If you have a catering business, is it viable to switch to family-portioned meal deliveries? If you are a landscaper, can you add sprinkler installation and maintenance to your services? It is time to see how you can stretch the resources that you have.
Top Business Strategy Planning Process & Development Tip: Start Selling Online
It’s 2020 which means that your business should have a website. A website will broaden your customer base. It is also a good business strategy and development model to get savvy with social media sites like Facebook, Instagram, and Twitter. Having a strong online presence will get more traffic to your online store and also to your physical storefront.
Pick Up or Delivery Services
The Indicator reports that one bookseller managed to nearly triple his business during the height of quarantine in Northern Italy. In March, Mattia Garavaglia’s bookstore was closed by the quarantine regulations. In response, he began delivering books by bicycle. He spread the word with an innovative social media campaign where he posted pictures of his bicycle and specially curated collections of books. In the end, he was able to make $20,000 in sales in a month when he typically made $7,000.
Even as the quarantine restrictions lift and storefronts reopen, pick up and delivery services will expand your clientele and help you to connect with new customers. And, if your business is rolling out new pick up or delivery services, make sure to shout it from the rooftops.
Research and Development
If things are slow, use this time to do some serious thinking about how the business can address any shortcomings. Invest time in improving products or services and increasing efficiency. Do you need to improve your business’s social media presence? Is it time to organize a company-wide training? Use this time wisely, and you can come out of the storm stronger than ever.
During these uncertain times, it is key that businesses communicate openly with lenders and vendors, with customers and clients, with staff and board members. The situation is always changing and everyone wants to be kept in the loop.
Have your Business Strategy Unit Focus on Human Capital
The effects of the pandemic will be felt at every level of business. This is to say that employees are probably as stressed about the business’s success as you are. If there have been layoffs or furloughs, employees will be worried about their job security. In a small business struggling to survive, managers must show leadership and get clear on what is human capital management and how they can leverage it.
Make employees feel safe in the workplace by organizing a clear phased return to work strategy, which prioritizes employee health and well-being. See that your employees have what they need to work from home. Keep them up-to-date with the company’s position and include them when making key decisions. This will keep up morale and help your team to reach their business goals.
Emphasize Customer Service
Remember the customers are experiencing many of the same problems that you are. The importance of good service in these difficult times cannot be overstressed. A little bit of empathy will go a long way.
To keep your current customers loyal and win over new ones, make sure that your staff is not spread too thin to meet customer needs. Encourage staff to be extra gentle; these days everyone is a little on edge. Invest in training employees and giving them the tools to provide top-level service.
Adjust Your Advertising Campaign
Depending on what your business is going through, it may make sense for you to reduce your marketing spending, increase it, or change focus.
If regulations are keeping your doors closes or supply chain shortages are leaving your shelves understocked, it is probably best to save your marketing money for sunnier days. However, if your business is open but your customers haven’t gotten the memo, it may be the perfect time to invest in marketing. Studies show that businesses that can maintain their advertising in slow-downs have a competitive advantage over rivals who are unable or unwilling to keep up.
Even if there’s no wiggle room in the budget, email is a cost-efficient business strategy to keep in touch with clients. If you haven’t already, now is a great time to build up an email list. Let people know you’re still kicking— and make sure to mention any new services and when your storefront will be opening again.
A business strategy template for success tip: Now is not the time for the “treat yourself” culture of the market boom. When people are tightening their belts, it is better to focus on what makes your product essential. This is the best way to increase your market share in tough times.
Business Strategy Basics: Team Up With Fellow Business Owners and Managers
Business owners should connect with others to try to solve problems together. After all, two heads are better than one. Businesses working together can share resources, arrange swaps and trade of tools or goods, and help each other through the storm. They can also organize to petition their local governments and get relief for their business and their workers.
Maybe you’ve scrimped and saved, and used every ounce of your ingenuity to stay afloat. Sometimes, it just doesn’t cut it. Don’t worry! You are probably eligible for government support from the federal or state government or the private sector.
The federal government currently offers several funding options for businesses hit by COVID-19.
The Small Business Administration, or SBA, is offering $350 billion in forgivable loans to small businesses. These Paycheck Protection Program Loans, also known as PPP loans, can be used to cover costs and pay employees. Businesses with 500 or fewer employees may apply.
The CARES Act also includes forgiveness of loan payments for existing SBA loans. Once implemented, borrowers will not have to pay the next six months of loan payments. No action is needed to receive this benefit, and the money never has to be repaid.
The eligibility requirements for Economic Injury Disaster Loans (EIDL) have been updated to allow small business owners to receive loan advances of up to $10,000 within 3 days of their application. This advance does not have to be repaid.
State and City Relief
Relief loans are also available from the state and city level. For example, the New York Forward Loan Fund (NYFLF) will help businesses of less than 20 employees reopen. Similarly, the California Capital Access Program (CalCAP) can help businesses of up to 500 employees recoup up to 100% of costs. Small business owners should check with their state and local governments for more information.
Struggling business owners may also choose to investigate industry-specific grants and private loans. For example, there are organizations offering help to struggling bars and restaurants.
Remember, the small businesses which will survive this storm will do so because they are lean and agile and able to pivot their business strategy development plan. They are organized not only to survive the tough times but to flourish when the market recovers.
Be Strategic About Cutting Costs
While business owners may be tempted to cut out all possible costs, they need to remember that the most competitive strategy is to angle for long term growth. Make sure you are cutting only what you can afford to lose. For example, layoffs, furloughs, and terminations intended to be temporary may end up being permanent when employees find other work. Failing to pay your vendors may also come back to haunt you in the future.
However, if the money saved with layoffs and delayed payments will determine whether or not your business will survive, it is worth the risk.
Be Kind to Yourself
A crisis such as this is unprecedented. Try not to dwell on what could have been done differently, and instead start from where you are. Remember that you are human. Forgive yourself for not knowing all the answers and stay cognizant of all that you are learning. This is an opportunity not just for the business to grow and strengthen, but for you to grow and strengthen as a leader.
The coronavirus pandemic has created a crisis on a global scale. The true extent of its effects will not be obvious for a long time. Those who can take advantage of this opportunity to adjust their business strategy types and ways of working will be well-equipped to survive future lulls and dips.
Cities like Milan, Paris, New York, and Berlin have used this difficult time as an opportunity to evaluate their priorities and refocus their values. It is time for a small business struggling to survive to consider how to achieve the outcomes they desire. It’s critical for companies to put emphasis on how to learn business strategy and be able to pivot is their plan during a crisis.
Written by Valerie Slaughter, Edited by Tanya Lesiuk