Many businesses still find themselves battling for survival against economic storm clouds. Photo / 123RF
Many businesses still find themselves battling for survival against economic storm clouds. Photo / 123RF
COMMENT:
We made it!
Thanks to going hard and going fast, as well as the collective effort of each of us, we've managed to do what almost no other country has done – brought Covid under control, lifted restrictions and returned to life largely as normal.
And while we needto continue to be cautious and guard against a second wave, the move to level 1 will be providing a sense of relief to business owners up and down the country.
This relief, however, will be short-lived as many businesses find themselves continuing the battle for survival against the darkening economic storm clouds.
Covid will have a long and lasting impact on our economy. Important sectors remain severely impacted by border closures, and international demand for our goods is likely to be depressed as the global economy continues to struggle for the foreseeable future.
When people start worrying about their jobs, they close their wallets. They delay making big purchases, they focus on only buying the essentials and they start staying at home.
And while some will be heartened by recent data showing retail spending rebounded by 70 per cent over May, chances are that this was pent-up demand supported by quick Government action to inject money into the economy.
News last week of closures and redundancies by some of the country's largest retailers is likely to only be the start of a winter of discontent for many businesses.
It is becoming clear that navigating the next few months will be challenging for every business owner – large or small. The priority must be on survival and being ready for recovery when the inevitable upswing eventually arrives.
But how do you survive until then?
The answer is to return to your first principles of business.
Firstly, remember your customer is the most important person in your business. Value them and understand them. Know that your customers have a choice of where to spend their hard-earned money, so make them want to spend it with you.
Repeat business will be key but you need to earn this. Strong customer service needs to be ingrained into your company culture. Every customer who walks through your front door or reaches out on the phone, via email or on your website needs to be made to feel like they are the most important person in the world.
This does not need to be complicated. In fact, it's the simple things that matter most. Service with a smile, going the extra mile, friendly professionalism and remembering that the reason you do what you do is about them.
Secondly, remember efficiency is the foundation for survival. Now is the time to be looking at every opportunity to reduce your costs and improve your cashflow. In doing this, be careful not to make change that will negatively impact the quality of your product or on your customer service.
Many businesses will have already been through this exercise during lockdown but repeat it and then repeat it again.
Are you on the best electricity plan? Have you reviewed your insurance? Have you talked to your landlord about your tenancy terms and have you chatted to your bank about how they can help support you through these times?
Gary Rohloff is the co-founder and managing director of Laybuy. Photo / Supplied
Review your staffing model, but be extremely careful. Good staff are hard to find, and they are the most important asset to your business. While cutting them might help improve your cashflow in the short-term, it could contribute to your business failure over the longer term.
Next, review your 4Ps: your product, price point, place and promotion.
The market has changed so you also need to change. Are you still providing what your customers want and are you providing it at the right price? During tough economic times, customers are more likely to shop for specials and hunt out bargains. Are you providing these? If you're in retail, is your store layout still appropriate? If you're in the service industry, do you need to rethink how you deliver your services to your customers?
Review your marketing budget but be careful about making drastic cuts. Your customers need to know what you are offering in order to spend their money with you. Marketing helps you grow your customer base, and that is exactly what you need to be doing in times like this. But ask yourselves if there are better ways to reach and talk to your customer.
Finally, remember the principle of location, location, location. While it might not be possible to easily change your physical location, ask yourself if you are making it as easy as possible for your customers to find you and to buy your product.
Are your opening hours aligned to when your customers are buying? Do you have a strong online presence and is it easy for your customers to use? And are you providing options to make it easy for your customers to pay for your goods?
While the business environment is really challenging right now, take heart that the world's largest brands have all faced periods in their history where they questioned whether they would make it. They adapted, evolved and changed and this grew them into the companies that they are today.
Remember that every challenge represents an opportunity. Embrace this opportunity and never be afraid of change. Doing this will position you well to thrive during the future recovery.
• Gary Rohloff is the co-founder and managing director of Laybuy.
