The Challenge of Growing a Business During COVID Lockdowns
Posted 8 Sep '21
Posted 8 Sep '21
It is no secret that the global pandemic of COVID-19 has had a significant impact on the consumer and business industries across the world. Most tragically, the pandemic has hindered the growth and even closed the doors of many small businesses. Those small businesses that were thriving pre-COVID, may now be fearing that continuous lockdowns have the capability to permanently shut their doors.
Small businesses, especially within the retail, tourism, events and hospitality industries, have experienced the most loss as they are unable to trade. While lockdowns are scary for businesses, it is essential for business owners to use this time to brainstorm ways they can diversify their products and services to better reach their clientele.
There is an understandable fear amongst small businesses of spending money when COVID-19 is threatening continuous lockdowns. When already strapped for cash, it’s intimidating to think about spending more on marketing and products as a method to reach a broader audience.
One of the first steps you can take, as a small business, to minimise those fears is to take a hard look at your business’ finances. Do you know your numbers well enough to know how much you need to break even? Programs such Jobkeeper cannot be relied upon to be consistent and present with each lockdown, so now is the time to begin the necessary brainwork and legwork to build a sustainable business!
Diversifying your business’ product and service offerings is a great first step to ensure sustainability in your small business. When the world changes, we must also change. It is common knowledge that we should adjust with market trends, so why would we sit idly during a global pandemic instead of making the necessary adjustments?
For example, continuing to sell retail items in a brick-and-mortar store may not be the best plan of action during a global pandemic. Taking your business online and brainstorming new products to sell that are more needed during the pandemic may be an option! Once you build an online establishment, you may even decide that a physical in-person shop is no longer needed.
The world is quickly changing, and the way consumers shop is also actively transitioning to a world online-based retail experience. Forbes said it perfectly when they wrote, “E-commerce has had a major impact on this year, not just for retail, but on how consumers shop and how brands connect with them.” It is likely that, even after the world adjusts to COVID-19, online shopping will be the preferred choice over visiting a physical store. Anyone else ordering their groceries online?
It obviously gets harder for the hospitality industry, with the purpose of these establishments being a physical experience. But we’ve seen some ideas of diversifying, such as bar owners selling their own branded wine, and restaurants starting delivery services as a way of bringing in some much-needed additional income during lockdowns.
Purchasing new products to reach a different market and even moving your store online can be considered financial risks. However, sitting down to calculate how much your business needs to make to break even and also how much you can afford to diversify your store can help you see that these moves can be smart financial decisions!
Knowing your small business’ numbers can be complex. This includes determining how much you are making in sales, how much profit you need to meet your obligations, how much your invested marketing dollars are bringing in, and more! Once you have a good grasp on your business’ numbers, you can move forward with diversifying your products and services.
Look at other businesses within your market that have already implemented the plans you want to move forward with. What type of marketing are they doing to reach a broader audience? What are they doing that is working? What are they doing that may not be working? Consider every angle, and factor in that knowledge when implementing your small business COVID plan.
Here at Empire Accountants, we have efficient and effective solutions available to support our small business clients!
For more information about how you can diversify your small business, we invite you to Book a Consultation for an Hour of Power session so we can chat and advise you on the important next steps.
Do you already have plans to diversify your small business, but you are not sure how to interpret your numbers? Book a Planning and Strategy Session with one of our trusted advisors. We will help you develop a budget and identify your important numbers to help you strategise a way to best use your fund to support your ideas!
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