The news of a global pandemic spreading across the world earlier this year, wasn’t expected to hit the UK’S economy as hard as it did. With the news of over 100,000 small businesses already forced to permanently close and many big names such as Monsoon and Victoria Secret falling into administration, should businesses be prepared for more to come?
What went wrong?
With so many businesses forced to make that horrible decision to close their doors for good, can we solely blame coronavirus for this or was it just the catalyst in an existing down storm?
Ercan Demiralay, partner at Wellers, explains how only certain types of business were able to adapt to the changes COVID-19 implemented.
“Diversification is a key buzzword at the moment. During lockdown we have seen how so many businesses were able to pivot and adapt their operations to still be able to serve their customers and keep revenue coming in. However, it is important to remember that not every organisation is able to do this.”
The pandemic has shown how much work there still is to do within the digital arena. We’re seeing global brands trying to fend off the challenger brands and in turn, the challenger brands live or die with regards to how much risk they’re willing to put into their customer engagement and marketing.
Henry Regan, managing partner of Carbon Global, shares his experience with larger companies during the pandemic:
“Digital transformation is much further behind than we originally thought, in fact, it is eye-opening. We are engaging with companies that have been trying to implement a digital communication framework for eight years, yet when the pandemic appears, so does the huge gulf in digitalisation from where they are to where they should be. Needless to say, on this occasion, it took only eight days to get past the red tape. It wasn’t the CIO, it was the pandemic which has brought these companies into the 21st century.
We may be in a crisis but we’re seeing that global brand leaders are really showing their worth by using agencies that have the ability to adapt to this situation and create imaginative content that connects with their audience.From Patient-Centricity to Customer Engagement and User Pathways, these buzzwords dominate the conversations we have with Novartis, AB Foods, Vodafone, General Mills, LG and AstraZeneca, but it boils down to one thing: it’s all about the customer.”
The major concerns still at large
Despite most businesses now able to reopen, or aware of when they can, there is still so much uncertainty. Each industry has seen themselves impacted in different ways with the future challenge not restarting businesses but finding a way to do so profitably.
The challenge of ‘breaking even’ will afflict businesses of all sizes. The additional time and effort to deliver products and services safely to customers whilst the virus remains a threat is bringing significant extra costs. All organisations must now work in a manner to ensure safety and prevent the spread of COVID-19.
There is also the issue that the economy has a domino effect whereby if the offices are closed, then the surrounding outlets that depend on the workers for their income will also have to remain closed with no demand. The pubs that depend on the afternoon and evening drinks will also struggle and hence it’s not easy to see how the longer-term impact of more home working will be for those businesses that depend on those people being in a work environment.
We’re seeing communal office workspaces that have been taking the money off new start up’s in the promise of beer at lunch crumble. There is a whole new generation of workforce who really can be left to their own devices and the new era of working from home coming to the forefront of everyone’s lips. For now, the virus isn’t going away, small start-ups are still forking out thousands a month on the office space. What is the ‘new norm’? No one really knows quite yet.
How can we survive?
Henry Regan claims that a long-term strategy is essential for companies to survive through the remainder of COVID-19 and whatever the future holds.
“The only way for companies to get through this is to have a pipeline of activity that’s shifting and adapting to its surroundings. The project you were promised before lockdown most certainly won’t be on the table now, the funding has moved to another pot but there’s every chance you could still be in with a chance. It’s about grabbing that opportunity with both hands and going that extra mile by truly building relationships.”
Following from this, keeping stringent financial records, and planning with your accountant is essential given many businesses will have to operate with additional costs going forward. Creating financial forecasts is slightly more difficult because we don’t know what the future holds yet, but it’s important to be forward-looking.