All Canadians need to prepare for the scenario where COVID-19 gets worse. Tom & Rita Hanks have it, NBA players Rudy Gobert and Donovan Mitchell have it, and Justin & Sophie Trudeau went into self-isolation because of it (edit: it’s confirmed Sophie Trudeau has COVID-19). In the same way movie star and professional athlete sponsorships help to sell more products, these well-known names will certainly boost COVID-19 awareness and response. Businesses everywhere are impacted. The NBA and NHL have suspended their seasons, cruise lines are suspending operations for 2 months, the stock market is dropping rapidly, and conferences, trade shows, award shows like the Juno’s are being cancelled or postponed. Small businesses will be hit hard, some more than others. In this post, I’m going to focus on how Canadian small businesses can prepare for and minimize the impact of COVID-19.
No one knows what the actual impact COVID-19 will have on small businesses as there hasn’t been a threat like this before. But there most certainly will be an impact. After doing some research, talking to many business owners this week, and reflecting on my experience working closely with small businesses on a day-to-day basis, here are 12 ways I think Canadian small businesses can prepare:
1. Prepare for Increased Sales
Depending on your industry, your sales will either increase or decrease. Concern for COVID-19 has led to increased sales for health supplies, groceries, and household supplies. I spoke to the CEO of a trucking company yesterday and he said things are crazy busy. There is an increased demand for rush shipments because of shortage in grocery stores and supermarkets. Many eCommerce companies are seeing increases in orders.
If you’re one of these businesses, think through how you’ll respond to the increased demand. How much of the demand can you meet? Do you have a limit on your inventory or workers? How can you increase your supply? Can you hire extra workers, ask staff to work more hours, or hire contractors? If you can’t meet all the demand, how will you prioritize your customer requests? What requests are the most essential at this time?
2. Prepare for Decreased Sales
At the same time, sales will decrease for many businesses. Anyone in the travel industry has already experienced mass cancellations. The Guardian reported that one U.K. chauffeur business lost 70-80% of actual bookings. Most retail businesses will see decreased foot traffic as people limit their activity and stay home. With the stock market drops and uncertain environment, people will spend less, regularly impacting all businesses selling non-essential items. One of our clients in the jewelry business has seen a drop in purchases this past week.
Other businesses like massage therapists, physiotherapists, counselors, personal trainers, and dentists that require personal contact may experience more cancellations or rescheduling requests than usual, as people decide to minimize interaction with others. My friend who is a travelling workshop facilitator says that participants are requesting updated information about refunds for cancelling and asking whether it’s safe for them to attend. Some of the venues that host his programs are beginning to suspend activities.
Think through how decreased sales will impact your business. How can you decrease variable costs during this time? How much cash do you have to get you through these difficult few months? Do you need to get an extra loan? Some governments are announcing interest-free loans to help small businesses impacted by this pandemic, and the Canadian government hopefully will follow suit.
3. Offer Customers Alternatives and Incentives
If your sales will be negatively impacted, think about how you can offer alternatives to your customers. One of my clients in the health care industry is exploring the possibility of offering their services through a video call. WestJet has temporarily removed their flight change and cancellation fees. Restaurants are offering extra delivery services to give customers alternatives to dining in.
You may also want to offer incentives for your customers to continue buying. One Milan restaurant is facing a 30% decline in reservations for the coming week and has created a new, less expensive delivery menu as more customers opt to stay home or not come into the city. Entrepreneurs are good at seeing opportunities, even when things look bad.
4. Prepare for Cancellations
The most effective way to slow down the spread of the COVID-19 is to limit social interaction. That means that events, gatherings, and meetings will get cancelled or postponed. My friend’s entire marketing team had planned to go to Anaheim last week for a large health foods trade show, which was postponed 2 days before the event started.
If your business has an event you are attending or hosting in the coming months, think through the impact of postponing or cancelling the event. If it is a paid event that is cancelled, can you get a refund? If you have sold tickets to an event you are organizing, will you cancel the event and offer refunds? Can you get refunds on the venue, food, and other services you have ordered? If you postpone the event, can you postpone your venue, food, and services bookings as well?
Some traditionally live events have changed to be online events instead, like Silicon Valley’s Y Combinator and Toronto’s Collision tech conference. Can your event be online instead of live? My wife and I organize a monthly meetup for local entrepreneurs, and we’re considering whether to cancel this or try to hold the event online.
(March 12 afternoon update: BC just banned all events with more than 250 people, Alberta too)
5. Communicate with Customers
This afternoon Cineplex CEO just wrote a letter to all their customers to communicate how they are responding to COVID-19. While their theatres remain open, they are implementing enhanced cleaning protocols and anyone feeling unwell to remain home. Be sure to stay in close contact with your customers throughout this uncertain time to communicate your plans and to offer alternatives if your “business as usual” will be affected.
6. Schedule Video or Phone Calls instead of Face-to-Face Meetings
I had three face-to-face meetings scheduled today and tomorrow. Because I’ve had a slight cough and sore throat the last few days, I’ve changed those meetings to Zoom calls and phone calls (don’t worry, I feel fine, but it’s better to play it safe.) “Thanks for being wise,” one of my clients responded when I asked to do a video call instead of meet. I could have cancelled these meetings, but decisions are made in these meetings that will impact the work we provide. If those meetings are cancelled, then work would be postponed, which would negatively impact our business revenue.
My friend that runs a tutoring company is considering changing her usual in-person tutoring sessions to be Skype calls instead. Be flexible and creative during this time and find ways to continue having meetings and providing service to your customers, even if they’re not how you usually do them.
7. Prepare to Work from Home
Yesterday, Twitter made working from home mandatory for all employees. My friend in Toronto said her company wants everyone to work from home, except for a skeleton crew at the office. She had to bring home all her files, documents, and computer so she could stay productive at home. The governments in China and Italy have ordered quarantines. If things get worse, this is a possibility in Canada as well.
Can you and your employees work from home? Do they have access to the systems, paperwork, and equipment needed?
8. Prepare for your Kids to be at Home
Ontario just announced that Spring Break will be extended from 1 week to 3 weeks for all public schools. In Hong Kong, schools have been closed since the end of January, and will remain closed until at least April 10th. One private school administrator I spoke with today is preparing their teachers for the possibility of doing virtual learning with their students after Spring Break, in case the schools need to remain closed.
Have preparations in place for your kids being home longer than Spring Break, especially if things get worse.
9. Prepare for Supply Chain Disruptions
There will be supply chain backups coming. Factories in China were closed for more than a month and are just reopening. It will take them time to ramp up and catch up on orders. My friend’s manufacturing company says all parts from China are delayed, which is causing delays in the assembly of their products. Make sure you have the necessary equipment, material, and supplies needed to keep running your business.
10. Work on the Business
If your sales are dropping, you cannot provide service to your customers, your meetings are cancelled, and you’re working from home, you may find yourself with more time than usual. This is the perfect time to work on your business. Focus on doing the important work of building your business, which could be redesigning your website (we can help you with that), reviewing your business strategy, touching base with your customers, implementing a new system or software, or building infrastructure. This is the type of work that is hard to do when things are busy, but is critical to the future success of the business.
11. Prepare for the Next Crisis
There will likely be more challenging situations for your business in the future. You may not have been prepared for the COVID-19 crisis, but you can start contingency planning for the next one. For example, if your team is relying heavily on paperwork, documents, and physical folders to work, it may be time to invest in setting up a cloud-based software so they can work from anywhere. Or if your business’ cash flow cannot handle a slow month of sales, it may be time to build a bigger contingency fund.
You can learn from Taiwan’s exemplary response to the COVID-19. Even with their close proximity to China, they’ve only had 45 cases so far. Ever since SARS in 2004, Taiwan has developed a 124 action item plan that includes travel bans, surveillance, social distancing and more. Because they were prepared and alert, they recognized the threat and were proactive in minimizing their exposure. Going through this COVID-19 crisis and experiencing the impact on your business will better help you prepare for the next one.
12. Help Each Other
These are uncertain times and they will be more challenging for some businesses than others. Show empathy and support to your fellow small business owners. If you’re struggling, reach out for help. I’ve found the support in the local small business community is very strong. If we can help you in any way, don’t hesitate to reach out.
We’re especially grateful for the medical professionals, researchers, and businesses that are putting in extra effort, hours, and work to help contain this pandemic. While no one can predict how COVID-19 will turn out, what we as entrepreneurs can do is to prepare, do our best to respond, and continue focusing on doing great work.