How To Build Your Business in a Post COVID-19 World
It’s safe to say that at present, during Covid-19 lockdown, many business owners face an uncertain time. Some have managed to carry on trading, some have temporarily shut their doors and others, very sadly have closed for good.
While we have seen a few industries thrive during the lockdown, for most it has been a case of doing what they can to reduce costs and trade if they can safely do so.
It is of course no consolation to know that you are not in this alone. Everyone is in the same boat, but that doesn’t help. Many small businesses have struggled to get Government assistance, finding themselves ineligible through no fault of their own.
While millions of employees have been furloughed on 80% of their salary (or in the majority of cases, enough to cover their outgoings), for thousands of small businesses there has been little or no support at all.
Too small to qualify for a business grant? Self employed earning over £50k? Company director paying yourself Dividends? You will slip through the broad safety net, and be left on your own to struggle.
What To Do
Our view is that despite what the press are saysing about this being the worst recession since time began etc. that it is actually the worst trading figures since time began due to a large swathe of UK commerce being closed down for 12 weeks.
In a normal recession, consumers run out of cash, then businesses run low of cash, then unemployment rises, house prices fall etc.
Covid-19 is a manmade recession. Yes, of course there will be casualities and a number of companies who weren’t making any money in the good times finding themselves unable to get through the lockdown, but they were in, in many cases on the way out before this began.
There are of course some industry sectors such as airlines who are especially impacted because of the nature of their business, their gearing, social distancing etc.
For many tens of thousands of businesses however, there will be a restart that picks up where they left off. It will take a few months for the general public to realise that they world is still spinning, but in many instances, trade will resume, money will be earned and bills will be paid.
It is interesting to see that during the lockdown retail sales ‘only’ dropped by 18%. While this is of course a huge figure, it does mean that 82% of retail continued, with our high streets & shopping centres closed.
That becomes a more interesting figure to work with as the high street traditionally represents a far higher proportion of retail sales than 18%.
This shows that consumers switched buying habits, went online and in essence, accelerated the growth in online sales by around 5 years.
While this is not great news for our embattled high streets, it provides an opportunity for online vendors, small businesses and opportunists looking to start, build or grow an existing business as we come out of lockdown.
While we have seen secots such as clothing drop by around 50% during lockdown, others have remained bouyant. The clothing sector may well be expected to see a large reduction as many new clothes are bought for going out, going on holiday and for events.
Without those trigger events to encourage a shopping trip it is no real surprise that we would make do and mend for a while.
Many corporations have also taken the opportunity to trim their payroll, cut costs and in many instances they will discover that they have been hasty and over exuberant with the red ink. Some large corporations are naturally pessimistic and situations such as this offer them a get out of jail card for cutting jobs, reducing wages and otherwise screwing over their workforce.
The offer of ‘free’ furlough cash from the Government has for the time being limited this mass job cull, and only time will tell who is right and who is wrong.
Some large employers, car manufacturers, airlines and others have business models not suited to our current circumstances. They sail so close to the wind that any break in sales presents massive problems. Maybe we will see a drive towards resilience going forwards.
If you compare Ryanair with Virgin, two seeming successful airlines, one in deep trouble, the other just moans a lot. The difference is that Ryanair owns 3/4 of their planes, while Virgin lease all theirs. One therefore has lower costs and the other has lease costs they can’t cut.
It is the difference between building a resilient business and creating a fragile cash generator for the benefit of VC funds.
My point if I was to have one is that there are many ways of structuring a business. Some help more than others when the going gets tough.
Small Business Post COVID-19 Planning
Building or re-building a business after an extreme even like this virus outbreak can be seen either as a trial or an opportunity.
This is an opportunity to build your business as you want it to be.
We are a nation of shoppers and as such, the nature of our spending habits isn’t going to change dramatically any time soon.
Where and how we spend our money may alter, but we will be back shopping before you know it.
We believe that the high street and traditional brick and mortar shopping will struggle. More people have now tried shopping online and will continue to do so even when the shops reopen.
The decline in our high streets has sadly only been accelerated by COVID-19.
Online selling is where growth is going to happen.
While it is fair to suggest that the affect of lockdown hasn’t been felt yet, the scale of personal economic loss is yet to be established.
As furlough ends and companies retake the responsibility for their staff wages from the Government, we shall begin to see the extent of the damage done to the economy.
We will, in all likelihood see more business failures before the economy gets back into its stride once again. But, the scale of those failures may not be half as bad as some of the press are suggesting.
Proactive Marketing & Survival of the Fittest
The businesses that will make the most from the recovery will be the ones that work proactively to go out and find new customers with new offers, new deals, new enthusiasm.
Finding new customers can be a daunting process. It is normal at times of uncertainty such as we are seeing now for businesses to lose some clients. To see their sales reduce.
This can be seen as an impending disaster or as an opportunity to find new, better, more loyal customers.
Finding New Clients
Historically, many businesses grow organically, over years, they open their doors and their business grows naturally. For many of these customers, using the supplier, store or whatever is a habit. “We go there because we go there.”
After a forced lockdown, some peoples habits will naturally change. Maybe while you were closed some of your clientele will have found a replacement service online.
Your challenge is to remind your clients that you are open again and ready and willing to serve them.
Online advertising in whatever form it takes is one of the best, most cost effective places to build a business. There are several options open to you;
1. Organic Search Results
2. Paid Google & Bing Adverts
3. Social Media Ads
The route you choose depends greatly on what your business is and what you are selling…… your first question should be….. “Where do my audience hangout online?”
The internet is a great place for grouping people together according to their interests, hobbies, jobs, likes etc.
Choosing the advertising medium that allows you to get your goods in front of a targeted audience makes your advertising more cost effective.
Making a website work in Google is one of our specialities. There are several critical essentials involved in making a website fit to rank well in Google for competitive search terms. Read about how we do it in our SEO Tutorials here
There are pros and cons to driving organic web traffic and paying for pay per click Ads. With a paid Ad campaign you get instant results and a rapid return on your advertising spend.
The downside is that if you stop spending then your Ads stop running. We run small and large PPC campaigns up to £1.2 million annual budgets so are well experienced to get the best return from your advertising budget. More about PPC Advertising Here
Social Media Advertising
Advertising on Facebook can be a great route to market. With different targeting criteria to Google you can fine tune your target market in different ways which works well for many sellers.
It all depends on the products or services you are selling. If you are retailing a mass adoption product to the general public then Facebook can be a superb way to build your customer base. Learn about social media advertising
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