Australia and New Zealand may have escaped the high numbers of COVID-19 infections and deaths that have been witnessed in other countries, but alongside the global economy, the economies of both countries have been dramatically impacted, contracting by unprecedented rates.
Certain sectors such as tourism, retail, aviation and hospitality, have been hit hard and lower consumer spend has affected small businesses most severely. Thanks to their agility, some SMEs managed to keep their doors open by pivoting their business model, while others have kept afloat with government stimulus packages and wage subsidies. But, these will expire early next year and SMEs must be prepared.
The talk of survival is a common conversation in the circles of small-business owners and with the Australian government recently announcing a change to their bankruptcy laws, allowing SMEs to continue trading if insolvent, SMEs have some additional time to find ways to navigate themselves out of debt. However, this is just a window period of reprieve for restructuring debt. Small-business owners need to be educating themselves in business and they need to have an action plan.
If you are a small-business owner you should use this lull as an opportunity to re-evaluate every aspect of your business, get educated and pivot your business model. Not every small business is struggling out there, some are booming and, equally so, they need to have a plan on how to manage the growth and demand in the marketplace.
Essential to this is a thorough assessment of your cashflow. Be honest with yourself about which of your products or services are really making money. Look too at the people, infrastructure and processes in your operation for opportunities to streamline. Be ruthless with those that are costing you money. This includes bad customers!
Focus on improving your customer value proposition and increase marketing around your bestsellers. Revitalise your customers’ experience by improving communication with them, making it easy for them to source and pay for your products and services, getting to know your customers better and personalising their interactions with you and your business. Adding value is one of the best and easiest ways of ensuring that customers do not stray. Retention of good customers should be high on your agenda right now.
One of the biggest mistakes most businesses make during tough economic times, is to cut their marketing spend. However, during a recession such as the one we are facing currently, it is important to be visible. Some of your competitors could very well be making the mistake of trimming back their marketing efforts so use the opportunity to steal the limelight. With better visibility and a great customer value proposition, there is potential to tap into a new target market or attract the attention of new customers who haven’t been exposed to your product or service previously. If cash is strapped, do some marketing DIY. Leverage social media platforms such as LinkedIn, Facebook, Instagram, Pinterest and Twitter to connect with new people and direct them to your website or store.
Remember, knowledge is power. Use the time to educate and equip yourself to manoeuvre through the next few months by learning, networking and investing in your own development. Invest time researching your market and leveraging the business survival tips and tools that are available out there. Tap into local business networking opportunities, read up and watch the many tutorials made available for free online by business specialists. Even better get a business coach to help you. Learning from a business growth specialist who knows how to navigate a business through a recession could save you costly mistakes and turn disaster into opportunity for you.
The reality is that nobody saw COVID-19 coming and few were prepared for its impact. It is what happens now, and how you prepare for what is coming, that matters. Those who see this as an opportunity to adapt, learn and reinvent their businesses could get through these times stronger and more profitable than ever before. This is a completely new playbook and as a SME you are the narrator of your own story – so make it count!
Paul Henshall, CEO, ActionCOACH ANZ
ActionCOACH is a valued partner of ISB and sponsor of the 2020 Top 50 Small Business Leaders Report