To work from home. Self-quarantine. Sports events canceled. Social distancing can help alleviate the coronavirus crisis, but it also threatens to destroy small businesses.
The decline in pedestrian traffic and the reluctance to go out leave shops and restaurants empty.
In Seattle, which was already badly affected by the outbreak, a recent survey found that 60% of small businesses there are considering wage cuts and downsizing, while 35% said they might have to close. More than 80% expect the situation to worsen.
While federal, state, and local governments need to take financial aid and other policies, there are also some small ways that, if they have the resources, individuals can help their preferred small businesses stay afloat during the crisis.
It is an experience that has shown very personally how far-reaching the social impact of epidemics can be. Without confirmation of coronavirus infection, several hundred families suddenly had to take precautions to look after their children. That means meetings and business trips were canceled, projects were delayed, and revenue was lost. Our school ended up being closed for only two days, but that spanned weeks across a country – Japan closed its schools until April – and the social impact became systemic.
Protect your employees.
The COVID-19 crisis was an emotional challenge for many people and has changed everyday life in an unprecedented way. Business, as usual, is not an option for companies. You can start by creating and executing an employee support plan that may be one of the most conservative policies and that triggers policy changes. Some companies actively compare their efforts with others to determine the right policies and levels of support for their employees. Some of the more interesting models we’ve seen include providing a clear, simple language for local managers dealing with COVID-19 (in line with WHO, CDC, and other health agency guidelines) and providing autonomy for them to feel empowered to deal with any rapidly developing situation. This autonomy is combined with the establishment of bidirectional communication that provides employees with a safe space to express when they feel unsafe for any reason and monitoring compliance with updated policies.
Ensure that liquidity is sufficient to weather the storm.
Companies must define scenarios that are tailored to the corporate context. For critical variables that affect sales and costs, you can define input numbers through analysis and expert input. Companies should model their financial data (cash flow, income statement, balance sheet) in every scenario and identify triggers that could significantly affect liquidity. For each of these triggers, companies should define measures to stabilize the organization in each scenario (optimization of liabilities and receivables; cost reduction; divestments and mergers and acquisitions).
Stay close to your customers
Organizations that better control disruptions are often successful because they invest in their core customer segments and anticipate their behavior. In China, for example, consumer demand has decreased but has not disappeared. People have shifted dramatically towards online shopping for all types of goods, including the delivery of food and products. Businesses should invest in online as part of their omnichannel sales efforts. This also includes ensuring the quality of the goods sold online. Customers’ changing preferences are unlikely to revert to pre-breakout norms.
Shop locally – online and offline
Molly Moon operates several ice cream parlors in Seattle that have been severely hit by the coronavirus. Moon, who employs 120 people, said she was now considering “extremely reduced hours … it breaks my heart”.
For healthy customers who run errands, she cheerfully encourages them to “stock up on pints for the hard times”. For those who stay at home, Moon invites them to buy gift cards and store goods on their company website.
When it comes to on-site shopping, the health policies of the Centers for Disease Prevention and Control “literally disrupt normal business,” said Abigail Ellman, director of the Cooper Square Committee, a nonprofit organization dedicated to preventing displacement of residents and
small businesses on the Lower East Side of Manhattan.
At the moment, Ellman says, companies are concerned about how to do rent and payroll. Customers alone cannot cure this burden, but she said, “You need to shop there. Support your local pharmacies, restaurants, and businesses.”