How Businesses Are Adapting During COVID-19
Covid-19 has taken the world by storm. As a result, business owners are continually finding innovative ways to continue operating during the pandemic. Matt DiFrancesco talks about how businesses have correctly scanned the environment to pivot towards surviving and fulfilling immediate business and personal needs.
The Response During Traumatic Events
Covid-19 is currently the giant trauma in our lives. When we go through crises like such, the first negative response can be “quitting and giving up”. However, we do not realize the problem with that. Where are we going to go after quitting? What are we going to do when the next event happens? Most of the time, we tend to think of these as isolated events. But, in reality, life is always full of some trauma or just life-altering events, and they constantly happen.
“When we get into the habit of quitting, it does not solve the problem because we are going to run into the next one.”
The Way Around Quitting
Instead of giving up and surrendering, we can take a step back and reevaluate the situation. Ask questions regarding what you need to change and what needs to go and grow. There is a common habit. People do not look at both sides of the aisle in tough situations. So, rather than getting engaged in catacombs of the blame game, it is wise to accept the situation and stay focused on the remedies.
“If people do not have the mental fortitude now just to deal with round one, round two is going to be even worse for them.”
I think the great minds of any era are the ones that are looking at opportunities that are going to necessitate things that are not done before. For example, some companies have stepped up and altered what they are manufacturing to fulfill the needs of people. This has led to several innovations, such as 3D printers. So, instead of quitting, a unified motto of everyone should be “What can we do?” The result of the solutions that you come up with will not be a quick fix but a long-term one.
Examples of Savvy Business Pivots
“We are in a desperate time. So that calls for a desperate measure, which leads to innovation.”
Printing Business
One of my clients owns a printing business. When everything shut down, there was no need for stationery, business cards, t-shirts, and promotional items. They started wondering, what are we going to do here? Fortunately, the son ended up finding a supplier that was able to get protective gear masks for them. They diversified at the correct time and are marketing both businesses. There is a greater lesson in this example. When things get back to normal, they will still be able to adapt because they now have a thinking process ingrained in their minds.
Wholesale Food Business
Due to covid and instructions regarding social distancing, restaurants had to be closed. Instead of going with the flow and waiting for things to get better, my client came up with an amazing idea of starting a drive-thru for grocery pick up. They received a staggering response from the community as it rallied around their business. So, what was the recipe behind this notable success? They simply took a survey of the situation and said this is our core business, but how do we adapt in this environment?
The Party Planner
Recently, I heard a story of a woman who is a party planner. Each one of her bookings got canceled. She had these tents that she used for weddings and parties. Instead of waiting around for the postponed events, she managed to find opportunities to utilize her inventory. So, she used the tents to set up Covid-19 test sites.
She took control of her situation by calling different medical centers and asked them if she could provide the tents for the testing. Her proactiveness has helped her business thrive. So I think that it is really about how you adapt when an event like this happens. We cannot get stuck. We have to think about what we can do to keep our business moving forward.
The Formula of “Proactivity” in Family Business
Adapting to the environment and continually looking for ways to differentiate your business to keep it moving forward is not limited to business crises. This is something that I go over with my family businesses. Especially the next generations. I am trying to help them to think like entrepreneurs and how they can evolve their businesses. They have got a much broader paradigm that can be used in a multitude of ways.
How Can Family Businesses Protect Themselves in Crisis Situations?
There are several ways in which families can secure themselves when situations such as the pandemic hits. For starters, they can set up a self-buyer program. Moreover, one of the key things that can really make a difference is a “savings program” for their business. So, all you have to do is take the first 10% or whatever percentage you want of your revenue and keep it away.
In this way, when the government announces to shut the business, you will have funds that will carry you until an adequate strategy is in place. But, apart from these short-term fundings, you will need a handful of long-term ones too. They can be through retirement plans, cash balance plans, or different non-qualified deferred compensation programs. These will ensure that you have control over the situation.
It would help if you also had strong organizational procedures that are going to protect the employees. These will include all HR procedures and business continuity plans. Employees seldom asked questions such as what will happen to us when something goes wrong with the business? Is there any continuity or contingency plan? However, due to the pandemic, people will ask more questions from the businesses they are engaging with.
New Structural Opportunities
We can look at the business structurally. There are multiple opportunities that can help your employees as well as your business. For example, if we take staffing, remote work can help employees achieve more work-life balance. Employers will learn that they can actually have a more productive workforce by utilizing technology to give their employees flexibility.
“In the long run, businesses will learn to adapt to newer opportunities for their core business, which is similar to the steps they are taking to adapt to the current environment, which is an economy that is continually changing.”
The Auto Dealership Business
One of my clients has an advertising company that is very focused on pushing its advertising towards their core market, auto dealerships. According to him, even the car business is changing. There is so much overhead in the dealership model. His analysis is that you will order your car and visit the dealership type place for a test drive, but eventually, you will be purchasing directly from the manufacturer or directly from a third party. What he is doing is trying to promote the dealers. So he is helping his clients to look at ways to grow their business in a new environment.
How Can Matt Help You?
As a personal quarterback for the client, I have to help them start thinking differently. My role is to really kind of guide them through this process. I bring them options and spark some creativity in them. As I have been actively working with businesses in this whole covid-19 situation, I have developed five action items that I am implementing with my clients.
If you are interested to know about them, you can schedule a free 20-minute conversation utilizing the “schedule an intro call” button. Then, we can determine if any or all the strategies would be of value to you and your situation.
Disclaimer
The information compiled and posted here solely represents the opinions and views of the guest. It might not necessarily be similar to the opinions and views of High Lift Financial. The availability of this content only serves educational and informational purposes. It is in no way a substitute for tax or legal advice or professional investment.
Always make sure to consult your financial advisor with any queries related to personal or business planning. DiFrancesco Financial Concierge, LLC. d/b/a HighLift Financial is a Registered Investment Advisor registered with the State of Pennsylvania and subject to the State of Pennsylvania’s regulatory oversight.