Time for small businesses to plan for coronavirus recovery
When things are changing as rapidly as they are in the wake of the COVID-19 pandemic, considering the “long run” — and a coronavirus recovery plan — can seem very difficult to do for small business owners. However, by looking at some common operational considerations and thinking through their impact, businesses can appropriately evaluate and make decisions that can be genuinely beneficial down the road.
Inventory and supplies
Supply chain disruptions across various industries have impacted businesses that both work with raw materials (like manufacturing and food service) and utilize their end-products (such as corporate office supplies or product at hair salons). This necessitates consideration of every level of working with the suppliers business owners depend on, from pricing that could be passed to the consumer, the ability to stock up in anticipation of a shortage or even the vendors themselves, who are likely also feeling said impacts.
All of this makes it critical that negotiations with vendors be approached properly. Even small considerations like discounts for timely payments and utilization of online forms of payment or communication can help streamline processes and reduce costs.
Logistics and Physical Space
Any business with a brick and mortar location or office space will undoubtedly need to rethink logistics to keep customers and employees safe, happy and healthy. As small businesses consider reopening strategies, regardless of their physical footprint, there are several consideration to be made, including:
• Whether employees are currently working from home and whether or not that can/should continue
• Ensuring telecom equipment is as up to date as possible with so many industries at least somewhat implementing digital elements (or going entirely digital) during the pandemic
• Safety considerations such as social distancing between employees or customers, improving air circulation and providing personal protective equipment (PPE).
• Considering these factors and adjusting appropriately will both make an immediate impact and potentially make future transitions easier given the ever-changing nature of the pandemic.
As essential as the safety and security of your employees is, the reality is that ensuring it can affect work output. This necessitates looking objectively at the extent of this impact and planning accordingly.
At the same time, product or service demand may also adjust as the crisis plays out, specifically depending on the venue through which you provide these products or services. Before adjusting production to account for any of these changes in output, weigh those considerations against demand forecasts. For example, if your business packages pasta for both restaurants and consumers, you might consult with the Food Industry Association about how people are eating to determine which type of packaging to focus on.
To cut down on uncertainty when analyzing potential demand for a product or service, business owners can benefit from utilizing resources provided by industry groups and trade organizations, as well as speaking with customers directly about how they think their needs might change.
Regardless of the type of business you run or how it’s structured, it’s likely you’ll need to adjust your operations as the COVID-19 crisis evolves. Think through any potential updates strategically to help ensure you’re well positioned as things start to normalize.
For more information on how to approach the challenges of the current environment, please visit the Wells Fargo Small Business Resource Center.
Joe Trimble is the Wells Fargo Small Business Leader.