The after effects of the Covid19 outbreak is not just going to be staggering, it will launch the global economy into another serious recession.
Statistics shows that this recession may be worse than the 2008 version.
And experts believe it may take the world about 3 years to get out of the Covid19 induced recession.
Why Should you be worried about a Post Covid19 Economy?
As a small business owner, you might feel there’s no cause for alarm as the Corona Virus pandemic would not get to affect your business negatively.
But here’s the reality…
The global economy is inter connected. So as a small business, you are not insulated from the effects of a crushing economy.
Not only will the pandemic induced loss of jobs in New York affect the cash flow in New York, it will also affect your business in Lagos, either directly or indirectly.
And if you’re a business relying on international clients, then it could get worse.
Now, inspite of the prevailing circumstances and projections, there’s a way you can mitigate the effect of the impending recession in your business.
So how can this done?
7 Steps to Reduce the Effect of Post Covid19 Economy on your Small Business
Like i mentioned earlier, one of the outstanding effect of the Covid19 outbreak will be a global recession that will cost the world in trillions, in terms of economic losses.
Below are the seven step process you can use to reduce the effect of the post Covid19 economy on your business.
Introduce a Flexible Pricing Mechanism.
With the onset of recession, a lot of people will have less money to spend on some services or products even when these services may be very essential to them.
As a shrewd entrepreneur, you want to introduce flexibility that will make your services available and even more attractive to prospective clients.
Doing this will demand cutting down on your prices at some point.
Below is a clear example of how you can set a flexible mechanism for your business pricing.
Let’s take for instance you run a Web Design Business.
As part of your package, you offer a compulsory website maintenance service at an extra cost.
This extra services has obviously increased the retail price for your business
In the post Covid19 economy, instead of maintaining this system the way it has always been, you will want to create a flexible system that will cut off the website maintenance from the entire package or making it optional.
Such changes will then reduce the over all cost of your business package while making it even more attractive to the client.
For other niches, you can also consider cutting off or unbundling some services altogether.
Taking this initiative might initially take a toll on your income but in the end, it will slim down your processes, ensure a more effective service delivery while giving your clients the needed motivation to buy.
In the end, you will also be able to offer a more competitive price that will keep your business running while the economy rebounds.
Provide More Value
One of your peculiar advantage as a small business owner is your ability to learn, adapt and incorporate new business skills within a short interval.
Unlike a large business that will need more time and resources to train and retrain its staff, you can get to learn new skills with your team within a very short interval.
Learning new skills puts you in a position to offer better or even more value added services to your clients at a very little or no extra cost.
Here’s a clear example…
Let’s assume you’re a professional Photographer.
70 percent of your job needs a Graphics design artist to get it done.
You’re well known for your craft with a large customer base but you don’t have Graphics Design skills and for this reason, you outsource these jobs to Graphics Designers at an additional cost.
With the onset of the post Covid19 economy, you may not be able to afford outsourcing as this might reduce your profit margin while increasing the cost for your client.
To get this out of the way, you’ll want to learn Graphics design so you can provide additional value to your client at no extra cost.
Learning the skill helps you reduce the cost of the services for the client because instead of outsourcing the graphics design part of your job, you’ll now create the design yourself.
Doing this helps you reduce the cost for your client while keeping your business running.
Over the years, specializing has helped businesses evolve brands that are easily recognized for specific services or products.
With a post Covid19 economy on us, specializing will have to be redefined. Especially for very small businesses.
This is even more important because, a lot of potential clients across the world will have less and less expandable income to spend on some services.
This will affect businesses of all categories. Including the very insignificant ones.
With such projections, as a small business, your first priority in this period is to survive and then thrive.
For this reason, instead of targeting your usual micro niche, you want to widen your market in order to broaden your chances of survival within this period.
To get this done, you’ll want to expand your business to sell complimentary or closely related products and services to further boost your income.
The outbreak of Covid19 has not only shaped humanity, it has helped us re-prioritize.
Right now, we have been able to re-assess the things that really matters to us and our survival, along side our goals.
As a business owner, you want to also relate the knowledge gained from the Covid19 outbreak to your own business.
You want to analyze the time and other resources spent on your business, their effect and how far they have added to your business growth so you can re-prioritize effectively.
Furthermore, you want to answer certain vital questions that will shape your decisions, as you work on finding solutions that will help you cut cost and maximize gains.
So, to get this done effectively; you want to start by asking yourself some self introspective questions like;
What does it really cost me to get one product or services delivered completely to a client?
Could this be done for less? If yes, how could that be possible?
Answering this questions will help you understand the exact resources you spend to run your business.
With this understanding, you’ll be able to decide on resources that are very critical to the successful running of your business and the ones that are not.
This should further guide you on what to cut off to save cost.
Over the years, savings have provided individuals and businesses a threshold of funds as a fall back on rainy days.
Recently, things have changed. The outbreak of Coronavirus has not only depleted savings, it is making it almost impossible for businesses to survive, and even harder to save.
Notwithstanding these economic realities, there’s still need to save up funds for the rainy day, at least until the uncertainty that comes with the post Coronavirus economy abates.
To get started with this, you don’t want to wait for a big check as it might never come.
You want to start with saving from funds generated from other expenses you’ve minimized.
In a situation where you have cut down expenses on transportation to your business locations, instead of spending the income, you reinvest it in another productive effort or save it completely.
These tiny savings could come in very handy in times of need.
With the out break of the Coronavirus, a lot of businesses have been forced to automate their systems
From creating automated systems like chat bots to the use of inventory management systems etc, the post Covid19 economy is driving sweepy changes in the way businesses operate
Today, many businesses are operating from home, just as most business meetings are being held across the internet via mobile applications.
Many years ago, no one could have accurately predicted this.
Although it is arguable that automating business operations cannot entirely replace direct human to human interactions…
With the onset of technological advancement like 5G etc we can only keep our fingers crossed.
Notwithstanding, as an entrepreneur, automating your business after the post Coronavirus economy can save you lots of productive hours.
It can also make you some bucks by the side if you venture into passive income businesses.
Recently, strategic collaborations have marked the speedy evolution of smaller and mid level brands.
Research confirms that businesses that were more collaborative had higher expectations for growth, compared to businesses with lower levels of collaborations.
With the onset of the Post Covid19 economy, collaborations between businesses is going to serve as a new tool to mitigate the effect of economic crunch on small businesses.
At the height of it, businesses may have to collapse their assets and merge resources together to build stronger opportunities.
Other businesses with complimentary products and services will want to cross promote their products to get them across to a larger audience.
Still other smaller businesses will set up steep collaborative efforts and others will barter their products or services, in exchange for important ones.
How to Collaborate as part of your Post Covid19 Strategy.
As businesses prepare to bounce back from the Covid19 pandemic, one of the outstanding strategies that will work for small businesses in the developing world will be strategic collaborations.
This will come in very handy as a last resort as government of most developing countries will not have the resources to inject funds that can sustain small businesses.
The following are strategies to Collaborate with other businesses.
Barter your Services
If you’re a Graphics Designer for instance, you may want to team up with a social media influencer for instance, create important flyers or designs for him while he introduces you to his business in return.
This can be also be repeated in other industries.
And at At the end of the day, Such collaborations when done strategically will help businesses thrive without unnecessary expenses.
Cross promotion involves promoting other people’s services in return for them to promote yours.
This has been working from time immemorial and could be even more effective as the post Covid19 cash crunch bites businesses.
Instead of waiting to advertise directly when you don’t have the funds, you can cross promote your business to other people’s audience.
The post Covid19 era presents a good opportunity for influencers and businesses to co-create better products, training etc.
Teaming up with other entrepreneurs to co-create can be very useful to you in at least three ways.
This includes speeding up production process, enriching the ideas shared and expanding your reach.
Instead of creating your own projects, trainings, ebooks etc all by yourself, this is a good time to team up with others and create products or services that can be shared to a combined audience thus creating better results.
In a nutshell, these are some key strategies that can help you position your business for the post Coronavirus economy.
As a smart entrepreneur, you’ll want to get positioned as the world emerges from the Covid19 induced recession and I am completely with you on this journey.
Now, over to you!
What’s the first thing you want to do to get your business prepared for the post Covid19 economy?