Archive for March, 2020

SMBs Face Decisions Forced By Coronavirus

March 13, 2020

From rattled stock indexes to empty sports stadiums, Americans face disruptions from coronavirus virus (Covid-19).  No one, least of all the leaders of the nation’s small businesses, foresaw the challenges in January that are affecting SMBs this spring.

From the high optimism expressed in survey after survey before Covid-19, SMBs now are staring at struggles to maintain supply lines and fill orders.  According to Cheryl Druehl, Associate Dean for Faculty and Professor of Operations Management, George Mason University, “the outbreak is already disrupting production and transportation for manufacturers, which threatens broader economic fallout. There will be wide-reaching influence on the supply chain. We could see serious impacts in every kind of manufacturing.”

By the end of March, the world will know if the feared Pan-epidemic is containable or further actions will be needed.  For SMBs short term decisions will center on obtaining critical goods to satisfy even reduced industrial and consumer demands.

Many leaders are considering cutting operations, reducing staff, hoarding funds.  These may be the prudent actions should the epidemic continue.

Before they do anything drastic, there are avenues open to them to improve customer relations and upgrade staff.  

For clients or customers:

  • Open broader lines of communications with customers to stay in touch with your customers.  Tell them the company stands ready to help.
  • Prepare a customer service plan.  If your store is staying open, inform as many customers as possible the business is remaining open and ready to serve them.
  • Have alternative means of delivering goods and services.  Retain new or expanded delivery options. Identify alternative products, services, or channels.
  • Host online events.
  • Review payment terms, options, and financing sources.
  • Service industries aimed at home, offices need to be doubly vigilant and proactive.
  • Above all keep everyone customers, and staff in-the-loop, on any changes.
  • Provide a list of FAQs.

For you and your staff:

  • Stay safe and informed.  Encourage good prevention habits and urge seeking medical help at the slightest signs of illness.
  • Take the time for you and your staff to attend online webinars and classes for learning new skills and perhaps obtaining certifications.
  • Offer new tools to ease work-at-home efforts.
  • Build online sharing tools to encourage better communications, along with answers to their FAQs.
  • Make financial assistance available where appropriate.

If you are expanding your online capabilities, these are the strategies developed to provide excellent customer service, sales and marketing through messaging apps:

Whether you operate with your customers face-to-face or online, how do you lessen the impact and even thrive if possible? 

  • Learn of any IRS Update on any deadline extensions
  • Check status of SBA Loans for affected businesses
  • Review handling cash flow demands with decreased sales
  • Publish disease Prevention Policies in the office without getting sued and keeping the doors opened
  • Consider asset preservation
  • Explore tax deductions unique to this situation
  • Move if possible employees to home based stations

However, many SMBs may not have the cash to wait out the downturn.  Nor, do they have the comfort of knowing what their competitors are doing.

The Chinese have a saying: May you live in interesting times.  For SMBs today, we are indeed living in interesting times.  They are times of danger and uncertainty; but they can be also the most creative of any time in the history of mankind.  And, as with many crises, there will be an end point.

SMBs need also be looking further down into the future.  Perhaps, this calamity is a wake-up call?

According to a recent study by consulting specialist CAMELOT Management Consultants, the majority of the companies questioned see agility combined with improved delivery capacity as the biggest challenge in the management of supply chains over the next three years.

Given that many SMBs depend on China-based companies to fill their supply chains, the coronavirus could be seen as a sign to encourage supply diversification.  Despite its demonstrated efficiency and reliability, keeping China as a sole source locus may not be an easy decision in the future.  Already, the rise of a Chinese middle class has led to wage growth making many products too expensive to produce on the mainland.

Further, political issues may lead to other hiccups in the supply chain.  Many of these issues are outside SMBs’ control.  Diversifying sourcing localities may be one way of mitigating these vulnerabilities.  Another solution is to bring some industries within the country’s borders.

Altogether, the coronavirus and the measures taken to fight it have given SMBs much to ponder and do.

There are both short and long term decisions to be made, which will determine their future business success.