How can small businesses cope with coronavirus?

TLDR of this Webinar

A helping hand from TradeGecko.

Small businesses have been hit hard by mandatory closures and other measures required to slow the spread of COVID-19. Many governments have also put in place assistance programs. In this webinar we will some tips for helping you and your business in these difficult times.

List Of COVID-19 Small Business Relief Programs

Transcript of the webinar:

During these times of change and uncertainty, the desire to come together is even stronger, which is why we’ve invited you to this short 10 minute video. Thanks for joining us - my name is Richard and I’m Team Leader for Account Management here at TradeGecko, and I’m joined by my good friend Sarah who heads up Marketing.

Small businesses have been hit hard by mandatory closures and other measures required to slow the spread of COVID-19. So we’re here to share with you some tips for helping you and your business in these difficult times. Many governments have also put in place assistance programs, and we will share some of these with you at the end of this presentation.

In the meantime, we have put together a TradeGecko, seven-step checklist of the areas to focus on.

YOUR PEOPLE.

Remember, your employees are some of your greatest assets, it is people who make a business successful so focus on them. The health and safety of you and your employees is key.  Many small businesses are having employees work remotely for the first time. 

A small team may still need to be on-location for certain functions (such as packaging or shipping). Follow government guidelines for social distancing by continuing with remote working wherever possible, and think of ways you can help everyone to stay connected, and motivated at this time.

As a global organization, at TradeGecko we are very used to using technology to communicate virtually, and many companies offer free usage, such as Google Hangouts, Zoom and Uberconference, you never know, the experience might make you rethink your policy on remote work, both culturally and technologically.

Your Processes.

Identify which systems operate key business functions; these are the ones you will want to keep running so that your precious time isn’t consumed with manual tasks.  Cloud-based systems, such as those for your accounting, inventory management, and fulfilment, will continue to work for you so you can focus on ensuring your customers get what they need in these difficult times.

Talk to your Account Manager about how you can get the most out of your subscriptions, ensuring you are using your software to the best of its ability - including reviewing what integrations give you the greatest automation, and help you focus on growing your business.

Using this time to improve your processes can set you up for success in the longer term.

Also - you may want to use this time to do those tasks you’ve been putting off - such as doing a stocktake  - that is if your staff are able to access your warehouses of course - or other time consuming tasks that you may have been delaying.

Your Costs. 

1. Review your cost base ( both fixed and variable) and eliminate or significantly reduce costs that are non-essential to the running of your business - such as recruitment.
2. With remote working arrangements in place, consider renegotiating office lease contracts
3. Consider reducing employee work hours / days where you have excess capacity to optimize headcount costs without the need for retrenchments. You could also offer unpaid leave which will significantly reduce employee costs yet provide job security to your employees who you will need when revenues bounce back.
4. Deep dive into payment due dates to ensure that you are fully on top of your cash flow requirements.
5. Reconsider your pricing and discount strategy to minimize cash leakage from revenues.
6. Over the mid term consider outsourcing non-critical business functions thus moving them from fixed to variable cost base.

Your Customers.

Make sure your customers know how to contact you. Use emails, social media, and even direct messaging services to keep your customers up to date. Communicate if there is any change in your ability to support your customers, or provide reassurance that your services can continue unhindered. Let them know how you can help them.

What do your customers need right now that you can provide? This is a good time to focus on your existing customers, provide excellent service, and make sure you retain those important relationships. 

Also, reconsider your marketing strategies - you have customers sitting at home engaging with social media. Is now the time to get them thinking about upgrading their homes for when things return to normal.

Your Products.

Largely speaking trade routes are still open, and some companies/sectors may be able to identify new sources of revenue 

On the demand side, research yours and adjacent categories to seek out areas of opportunity for new products/ revenue streams by pivoting your offerings. For example, Some Australian breweries have jumped on the increase in demand for hand sanitiser by turning their ethanol into sanitiser.

Those who are best placed to succeed are creative, and not dependent on any one channel or market. 

 Here is what data in the US tells us:

Unsurprisingly travel and entertainment are the most affected, but we see small growth for companies who sell across both retail and wholesale, healthcare products and the pet sector.. The biggest uplift of all is for food & beverages. 

If you pivot your offering it may make sense for you to continue or even upweight marketing spend.

Investigate how you can diversify your supply chain in terms of manufacturing, purchasing and distribution, Think creatively about what adjustments you could make, if supply chain issues are becoming a challenge, seek out local suppliers. Even if costs are higher, you will still have inventory to sell.

Think about your products and how they might be relevant in the current market.

Seek Assistance

• Some government agencies are offering subsidies for workers who are affected, to help companies avoid permanent layoffs. 
• Many governments are giving tax extensions, but you will still need to file your tax returns on time. The country with the closest upcoming tax submission deadline is the US on April 15th (footnote: Since the filming of the webinar the US government has delayed this until July 15th). 
• Many government bodies are offering small business loans on a reduced interest rate, to cover payroll and other fixed expenses in order to keep businesses afloat. 

Also talk to your bank about finance options; those who treat their customers well now, will reap the rewards in the long run by creating loyalty.

Countries may have different policies at a national level than at a state or local authority level, so do explore all options for support.

In addition, big tech is donating ad credits to the W. H. O. and government agencies, and two big names are providing help to small businesses in the form of free advertising with Yelp providing $25 million in funding, and Facebook announcing their own $100 million program to help 30,000 small businesses in over 30 countries.

Please note: There will be a lag period in receiving any funds, so don’t delay, and start researching what you could be entitled to NOW.

Make a plan, and willing to adapt.

Be willing to adapt, just remember that any changes you make now will have consequences long after this trying time has passed. Continue to adjust the plan as you learn more.

What can we learn from the China experience with COVID-19? 

With the entire country on lockdown for the month of February, retail sales dipped 20% and industrial output declining by 14%,  However, as of mid-March, China seems to be on a path of recovery, and business appears to be bouncing back. JPMorgan predicts that China’s economy will grow 15% in the second quarter as it recovers from this pandemic.

Small business owners should find some comfort in knowing that in being small, they have the advantage of being more nimble and agile, which allows them to adapt more quickly than larger companies. 

We’d like to leave you with this List Of COVID-19 Small Business Relief Programs, the links to all of these can be found on our website and please also check out the other ways we are trying to provide a helping hand.

Thanks so much for joining us, and we wish you and your business all the very best during these times. Please feel free to contact us at success@tradegecko.com with any questions.