The Business
Landscape has Changed
If you were to wake up years in the future like Woody Allen
in the 1973 comedy “Sleeper,” you’d be surprised by what has changed in your
life. Normality and almost everything that you have known to be true.
That in a broad brushstroke summarizes expectations of what business,
interpersonal relations, recreation, education, sports and other activities
will look like after the coronavirus pandemic dissipates.
Yesterday, on Good
Morning America, New York’s Gov. Andrew
Cuomo opined when asked about schooling in September that he doesn’t know
if schools will be open or not. Furthermore, he said, if someone offers a reply
in any direction, don’t believe it. That means that no one, regardless of how
educated or experienced they are, really knows what to expect in the near or
distant future. SWAG is the name of
the game.
So what should we do? What should business owners and
entrepreneurs do to survive – not to mention thrive – until better times?
Basically, read
as much as you can, listen to as
many experts as you can, consult
with as many smart people that you can, follow
the rules and regulations, and then plan
your steps to recovery meticulously, skillfully and effectively.
The road to recovery, relaunch or reopening of your business
is a minefield with all sorts of obstacles not the least of which is the
continuing prevalence of the disease itself. This fact alone has transformed
people’s mentalities and made their manners unpredictable.
While coronavirus is being contained on one side of the
country, it is spreading or spiking in other parts. It may be under control in
one neighborhood of your marketplace while spreading on the other side of town.
As of this writing, the US death toll from the coronavirus
illness is approaching 120,000, amid
reports that nine states are recording either single-day record numbers of
cases or their highest seven-day new case averages, indicating they are not
managing to contain the spread. Some experts foresee between 130,000 and
140,000 deaths by the Fourth of July. Alabama, Arizona, Florida, Nevada, North
Carolina, Oklahoma, Oregon, South Carolina and Texas are seeing infections
climb, according to a Washington Post analysis. The COVID-19 pandemic has killed
some 445,000 globally already.
Dr. Anthony Fauci,
head of the National Institute for Allergies and Infectious Diseases, said the
current talk of a second wave of infections is irrelevant because the country
is still dealing with the first wave. “We are seeing infections to a greater
degree than they had previously seen in certain states, including states in the
southwest and in the south,” Fauci said. “I don’t like to talk about a second
wave right now, because we haven’t gotten out of our first wave.”
Nostradamus Arises
But Nostradamus predictions by reputable experts of a deadlier
second wave in the fall are visible throughout the Internet, poisoning
consumers’ behavior. Peering farther into the future, some analysts say there
is at least a one-in-three chance that at least one of four major tail risks
will occur within the next decade with major power outages as electrical power
grids are disrupted: a major influenza pandemic killing more than 2 million
people; a globally catastrophic volcanic eruption; a major solar flare; or a
global war. Adjust the time frame to two decades, then there is a 56% chance of
one of these disasters occurring, the analysts say, based on various studies
and risk assessments.
After weeks at home, a stagnant economy, rising
unemployment, padlocked businesses, schools and places of entertainment, and
fear, the country is reawakening. Sadly, Americans aren’t cooperating with
experts’ advice and frantically escaping their corrals, contributing to spikes
and record numbers of hospitalizations as thousands more Americans get infected
every day.
“We’re going to have to face the harsh reality in some
states that we may need to shut down again,” Dr. Jonathan Reiner, a professor at George Washington University
School of Medicine, was quoted as saying.
“Because of quarantine fatigue, because of the economic
effects of quarantine, another round of shutdowns might have even larger
effects on businesses that may be on the edge of not being able to stay
solvent," warned Dr. Christopher
Murray, director of the Institute for Health Metrics and Evaluation at the
University of Washington.
Experts offer three suggestions on curbing the spread of
coronavirus: social distancing, masks and washing hands. Based on limited
compliance with the first two it could then be safe to say that handwashing is
also being belittled.
Gallup reported that about 67% of women said they had worn a
mask outside their homes, compared with 56% of men, which was based on a random
sample of 2,451 adults in the United States and had a margin of error of 3
percentage points. President Trump
notoriously falls into the category of abstainers. Without delving into
partisan affiliations, the survey found that people who live in a county that
has recorded at least one coronavirus-related death are more likely to wear
masks than people who live in counties that have recorded no deaths from the
virus, according to the Gallup poll. Those who decline to wear masks say donning
them is a sign of weakness or an infringement on their freedom of choice.
In New York City, some 80% of residents while nearly 79% of
Los Angeles residents said they always wear masks in public, according to a
nationally representative survey published by the Centers for Disease Control
and Prevention. However, outside of the two cities, 60% of Americans responded
that they always wear masks in public.
Americans’ anarchistic and anti-science thinking will not benefit
their communities, businesses and the world in the long run.
Feelings of Good
Times Evaporate
Ironically, leading up to the pandemic catastrophe, small
businesses had been optimistic about their prospects in 2020. Sales projections
looked good. Then the bottom fell away. According to Princeton Economics, this spring surveyed small business owners
were already severely impacted by COVID-19-related disruptions: 60% had already
laid off at least one worker. Business owners’ expectations about the future
were negative and deteriorated over time, with 37% of respondents in the first
week reporting that they did not expect to recover within two years. That
number grew to 46% by April 19. The proportion reporting that they didn’t
expect to ever recover decreased by 0.4 percentage points per day,
with only half of respondents believing their business would never recover
within two years by the final week of the survey.
A recent study for the Stanford Institute for Economic Policy Research showed the number
of active business owners in the United States had plunged by 3.3 million or
22% from February to April when the coronavirus shut down the economy, the
steepest decline on record.
There is no question we are entering a deep and sharp
recession, unfamiliar to economists as the virus is unfamiliar to the medical
profession. Forecasters keep revising their predictions downward, with
some now seeing an up to 40% drop in second quarter GDP.
Projected damage varies by industry. Overall, 38% of
the small firms think they would still be open after a six-month crisis, but
that drops to 27% for tourism and lodging firms, and only a 15% survival rate
for restaurants. And, as the authors note, entrepreneurs are
notoriously optimistic, so “true survival rates may be even lower.”
From a macroeconomic standpoint, the swiftness of closings
is the biggest problem. Normally, around a third of small firms with
employees fail in their first two years, and only about 50% survive for
five years. But the pandemic crisis is compressing these closures into a
very short time, which in turn drives down overall economic demand, in a
negative spiral.
The economic toll from the first round of shutdowns has been
staggering. More than 44 million
people in the United States have filed for initial unemployment benefits
since mid-March. The prognosis for a quick and painless recovery is not great.
Many large and small businesses have already closed their doors while others
face this unfortunate demise in the future. Everyone is loving their nerves.
According to the Small Business Administration (SBA), a
small business is any firm with 1–499 employees. Under this
definition, small businesses make up 47.3% of all private-sector employees
but a whopping 61% of new jobs. So even a minor disruption in small businesses
could affect a large portion of employees and the economy, especially during
attempts at recovery. Seven and a half million small businesses will shut
permanently if business disruption caused by COVID-19 continues unabated,
according to a new survey from Main Street America.
That sounds the death knell for a vital segment of America
that is dependent on regular economic prosperity.
Reopening Steps in
New Jersey
Unable to keep small business owners closed, governors are
allowing them to open gradually their doors and begin servicing customers. For
example, New Jersey’s Gov. Phil Murphy
order provided clarification on how other businesses in the state may function,
stating that:
• Restaurants and indoor recreational and entertainment
businesses are permitted to allow individuals to tour their facilities for event-planning
purposes, but such individuals must wear face coverings at all times and the
facility may not provide food or drink tastings or samplings;
• Students, who may be accompanied by parents or guardians,
may enter school premises to retrieve personal belongings from lockers,
classrooms, or other areas;
• Open houses to view real estate are permitted, provided
they comply with the restrictions on indoor gatherings, including the
requirement that attendees wear face coverings;
• Bicycle shops, boat dealerships, car and used car
dealerships, farming equipment stores, federal firearms licensees, livestock
feed stores, mobile phone retail and repair shops, motorcycle dealerships, and
nurseries and garden centers can operate according to the requirements placed
on essential retail businesses;
• All car washes can operate according to the requirements
placed on essential retail businesses;
• Yard and garage sales are permitted subject to the
requirements on indoor gatherings, but municipalities shall have the discretion
to impose additional restrictions on these sales;
• Special events, including fireworks displays, at public
and private beaches, boardwalks, lakes, and lakeshores are permitted, subject
to the restrictions on outdoor gatherings; and
• Shared space tutoring service facilities remain closed to
students and clients.
These are more or less comparable across the country.
You may be chomping at the bit to open your business after
weeks of being closed down, but it’s important to do so carefully. Budget for
the new expenses you might face, assess your staffing needs, and continue
adapting to these turbulent times so your business can survive the pandemic,
and perhaps even thrive during it.
Erratic Consumer
Behavior
Consumers’ behavior will impact your business because you
will have to decide how to deal with those who aren’t ready to comply with the
safety rules and regulations. Will you sell to them? Will you allow them into
your place of business without face coverings?
To protect your customers and employees you may have to consider
taking everyone’s temperature. However, will temperature checks make workplaces
safe? According to experts, no, not completely. They can help reduce the risk
of COVID-19 infections but shouldn’t be the only safety measure employers take.
Business owners, managers and employers should be aware that
screening for fevers alone won’t eliminate risk. This becomes a new task for
the human resources staff. People with the virus can be contagious without a
fever, so it’s still important for employers to increase space between workers,
disinfect surfaces and encourage hand washing. Employers have been seen installing
Purell or other hand-washing stations in their places of business. A person’s
temperature can be taken with a no-touch infrared thermometer pointed at the
forehead, and workers can use the devices to take their own temperatures, using
hand sanitizer before and after.
Restaurants are typical examples of small businesses and because they deal with food preparation and hungry patrons they’re under tighter scrutiny than other enterprises. They are also suffering more than others.
New research from the National
Restaurant Association indicates that the restaurant industry has lost $120
billion in sales during the last three months due to the impact of coronavirus
in the United States.
State mandated stay-at-home policies and forced closures of
restaurants resulted in losses of $30 billion in March, $50 billion in April,
and another $40 billion in May.
The association’s latest operator survey drew more than
3,800 responses, illustrating the extensive damage to restaurant businesses
since the outbreak began. It found that the restaurant industry, which
experienced the most significant sales and job losses of any industry in the
country in the first quarter of 2020, expects to lose $240 billion by the
year-end.
Social Distancing
Leads to New Restaurant Budget
The social distancing requirement will certainly affect
restaurants’ already impacted bottom lines. Foodservice operators need a
pre-determined amount of sales per table to be profitable and the six-foot
prerequisite will certainly erode their profits.
While waiting to open for al fresco or inside dining, many
restaurants have been offering takeout service, which has its own set of new
supplies, equipment and cost demands.
Like many retailers and other professions, foodservice also
has had to invest in personal protective equipment such as overalls, masks and
gloves, which is an extra costly line item. As a result, some American and
Canadian restaurants have been seen adding a noticeable COVID-19 surcharge to
their receipts totaling 5% of the bill. Will consumers accept that freely?
When given a choice between shopping and dining, consumers
have chosen the former. That’s the finding from the latest survey from S&P Global Market Intelligence,
which polled 1,250 people between April 30 and May 18. When restrictions let
up, 44% of consumers said they planned to head back to stores. But only 31%
said they’d dine out. After three months, the dine-out result rose to 40%.
Not that it should deteriorate to a battle between the two business
segments, but restaurants can improve their odds by demonstrating the integrity
of their menu selections at the time of the pandemic, offer patrons a pleasant
and inviting ambiance, and assure them of a safe and healthy environment.
When you’re opening the doors to your business – food or
non-food, you should pay attention to these issues: Safety and sanitizing
procedures, your staffing needs, and being flexible with your business model.
The latter two points suggest that you should consider
temporary staffing adjustments or reductions and not being married to your
original business plan if you want to survive.
According to Luke
Saunders, founder-CEO of the Farmer’s Fridge vending company, the future of
the food business will be different. Among the differentiating points to
consider are: food safety will be the new organic question, patrons will trim
food-away-from-home budgets, closing the kitchen to the public eye, no more
self-serve, 50% fewer tables, lines will not be a sign of success but rather poor
management, limited menus and technology dominance.
The CDC recommends that restaurant layouts should be
modified to allow for at least six-foot social distancing by marking tables
that are not in use. Physical guides, such as tape on floors or sidewalks and
signage, should also be used. Crowds should be discouraged through the use of
phone apps, text technology, or signs to alert patrons when their table is
ready. Buzzers and other shared objects should not be used, and self-serve food
and drink options such as buffets, salad bars and drink stations should be
avoided.
New Supermarket
Traffic Patterns
In supermarkets, consumers that had begun to drift to the
fresh produce sections have been seen wandering into the center aisles to buy
packaged and dry goods. But COVID-19 quarantines and lockdowns have reversed
the fresh trend, with shoppers clearing out shelf-stable products in recent
months.
Nielsen data sent to Food Dive showed exponential growth in
these categories over the last nine weeks. Beans saw 82.1% growth, canned and
pouch tuna jumped 75.6% and rice sales increased 84.5%, according to Nielsen
figures.
“During the pandemic, consumers have begun to find comfort
and a sense of safety in making sure they have enough food on hand,”
Melanie Zanoza Bartelme, global food analyst at Mintel, told
Food Dive. “Shelf-stable goods like beans and tuna offer a long shelf life and
will 'be there' when consumers need them.”
This touches upon another consumer issue. I’ve seen shoppers
obnoxiously defy supermarket traffic patterns clearly displayed on the floor
that are intended to limit encounters in narrow aisles.
With the hint of reopening in the air, retail sales in May
showed a 17.7% increase, the Department of Commerce announced, numbers that
stood in sharp relief to the two previous months – there was a 14.7 percent
drop in April and an 8.3 percent decline in March. However, The New York Times reported,
“the underlying data presents a more complicated picture and shows just how
arduous an economic recovery from the coronavirus pandemic will be.
“The May numbers followed two months of record declines, and
overall sales were still down 8% from February. Some categories, like clothing,
were down as much as 63% from a year earlier. And many of the stores and
restaurants that welcomed back customers last month did so with fewer
employees, reflecting a permanently altered retail landscape and an ominous
sign for the labor market.”
The story notes that “May’s retail sales figures became the
latest data point fueling the debate in Washington and on Wall Street about
whether a broad reopening of businesses will cause the economy to snap back
quickly or if additional stimulus measures are needed.”
While competition among all businesses will be stiffer as
the country opens up, those firms that demonstrate strict and visible adherence
to official Centers for Disease Control
regulations will edge out their competitors. Successful businesses will have to
be quicker in launching new products and new marketing campaigns. They should
take advantage of seasonal events that are celebrated, often worldwide, every
year to promote their businesses such as Valentine's Day, Christmas, Black
Friday, Easter, 4th of July, Thanksgiving, Chinese New Year, Halloween, Mother's
Day and Father’s Day. Seasonal stories also include the four seasons:
spring, summer, autumn/fall, and winter.
Pitching seasonal stories is a great way of getting regular
media exposure and as the event happens at the same time every year, business
owners can prepare for them in advance and use the same or similar angle year
after year. Journalists accept story ideas that are current which
makes seasonal stories very attractive to them and the good news is
linking your business to a seasonal event and coming up with
a seasonal story can be easy.
Digital Economy to be
Key
We are heading into an intensified digital marketplace after
coronavirus with consumers favoring online purchases rather than in person. Business
owners can also benefit from this trend. Nearly 1/3 of small business owners
have admitted that without digital tools they would have had to close all or
part of their business during the COVID crisis. American small businesses are
relying more on digital tools during the COVID crisis, with 76% saying that
they’re relying more on digital tools to run their business. One-third of small
businesses say that they will rely more on digital tools moving forward from
the COVID crisis. A lot of business owners have learned from COVID-19 the
importance of adapting. As you reopen, think about the evolving needs of
customers & aim to accommodate. 40% of small businesses say they’ve relied
on digital tools to find new customers during the #COVID19 crisis; 36% say they
have used digital tools to pivot to online sales.
If you’re stuck coming up with a course of action, consider
a Bloomberg discovery. In December 2017 Bloomberg made headlines when
it published a report that suggested inclusive teams made better
decisions up to 87% of the time. The report also noted that having more
inclusive decision-making led to swifter decisions. As a contemporary solution,
inclusiveness takes into account race, gender, age, and physically challenged
people.
Recent newspaper articles have observed that the governments
that have apparently dealt well with the COVID-19 pandemic, such as New
Zealand, Germany and Taiwan, are those that have women in key positions. A
wider analysis will be needed in due course to decide if the mere presence of
women makes a difference, but a 2019
World Economic Forum report noted that having women in decision-making
positions across different state-level governments in Canada made a measurable
difference to health.
In order to attract and keep employees, you may have to
consider new perks for them. Two hot ones nowadays are working from home to a
greater or lesser degree or working four days a week.
Show your current and potential customers that you are
sensitive to contemporary issues such as sustainability which usually helps
businesses grow and expand.
All of this is important as the world’s governments claim to
want to build back better or rebuild a better world after the immediate health
and socio-economic impacts of the COVID-19 crisis have passed.
Going forward, seek sound advice from a host of free
business consultative services such as the Small Business Administration (https://www.sba.gov/), America’s Small Business
Development Centers (https://americassbdc.org/)
and its state affiliations such as the New Jersey Small Business Development
Centers (https://njsbdc.com/), SCORE (https://www.score.org/) and others.
I don’t know if what’s ahead of us is a brave, new world, but
it certainly isn’t for the faint of heart. You had the skills, education,
training, determination and attitude to launch your endeavor so relying on these
characteristics today should carry you to better days.
AS A BONUS, here
is a link to the 50 best blogs that every B2B marketer should follow:
