As Canada has been shut down for roughly two months now, and we try to stay up to date on all the new government updates, I can’t stop thinking of the impact that this virus has had on business owners.
COVID-19 has touched every industry in some form or another. A few industries have seen an increase in sales (think toilet paper, sanitizers, food delivery) and some industries have been absolutely decimated (i.e. airlines, restaurants, advertising). The business owner has been tasked through this period of time with:
- Trying to keep their business afloat with decreasing revenues
- Keeping as many employees as possible on the payroll
- Having their retirement dreams postponed or vanish
As a business owner, you want to get back to BC –Before Corona– and want to know when you can get to AC –After Corona. Many of our clients are using this time to think about all the strategic, intentional decisions to make from a business perspective right now but also when this pandemic ends.
This COVID contemplation is based on the following questions:
- Should I sell my business or keep investing in it?
- How do I keep my family safe and happy while running the business?
- Should I monetize only a part of my business and reinvest outside the business?
- Do I look for acquisition opportunities to accelerate my growth?
- How can I build a better, more valuable business?
The COVID lessons part of this post details ways to create new value for your business moving forward in ways you might not have thought about before.
- Reduce Supplier Concentration. If one of your suppliers went out of business or shut down, can you still operate near capacity? Or would your business have a hard time functioning? Look to increase the number of suppliers you use.
- Look at your balance sheet. Does it have too much debt? Or too much capital? Can you remove some capital without affecting your operations?
- Create supplementary revenue streams. Can you move a lot more of your sales online, or create a new customer segment?
- Figure out the required return on capital you need. When you are investing in your business, whether it be equipment, buildings, or people, understand what that investment will generate. If it doesn’t match your return threshold, consider a different investment.
- Is your business model sustainable? Look to competitors and businesses that operate outside your industry to see if you could adapt any practices to improve your business.
- Improve your business. Look at your businesses weaknesses and opportunities. Find ways to create value for your business by improving your technologies, better management team, or remove redundant product lines.
COVID-19 has shocked the system and demolished the economy for the time being. Some businesses will grow from this and others won’t survive. Those who ponder these questions and think of ways to improve their business will be rewarded greatly.