The crisis with the COVID-19 coronavirus pandemic proved sobering for the world economy, healthcare, and even our entire civilization, which proved to be absolutely helpless and, worst of all, totally unable to think and make alternative solutions. However, in this article, we will not talk about the health side of things, but we will pay significant attention to business in the context of COVID-19 and how it lost, won, or learned something new.
How to deal with force majeure crises in business
Thanks to our work with many companies during the crisis we were able to form 5 great tips for Bulgarian business that will set you apart from your competitors in conditions of force majeure, even if the crisis recurs in the future.
Digitize your business during Pandemic
Before the pandemic, there were still decent businesses that did not have a website – today they are extremely rare.
In practice, it turned out that the Internet is a significant convenience for communication with customers and the realization of the main subject of activity of any company, as long as of course, it has adequate management.
Digitization of business in Bulgaria
Your online store serves as at least a few physical stores – this has finally shown the benefits of the Internet even to people with quite stagnant technological thinking.
It doesn’t just play the role, it generates as much revenue as several physical stores. Now compare the costs of maintaining and advertising your online store with the support of several employees, office space, electricity, water bills, and many other costs that every business has in maintaining physical representation.
Unless absolutely necessary, you can reduce your physical presence or keep it to a minimum, focusing on online representation as a way to be independent of offline factors such as site closures, restrictions, or even employee payroll costs. that does not work.
Don’t wait for the next crisis! Ride the wave while you still have it, because then you will get lost in the sands of the ocean, and the current state of consumers, who are increasingly accustomed to doing almost everything online, is a great opportunity to get a flying start for your new site or e-shop.
Revenues from 1 average site are comparable to revenues from 3-4 physical sites, and the cost of maintaining this site is several times lower than maintaining a physical store.
Diversify the revenue stream
If you have read the first point, then you have already learned that using the Internet not only gives you the opportunity but also brings you diversification of income.
This way you will be able to reach a huge number of new users that you have not reached until recently. Unlike physical stores, which have a planned flow of people, the online environment provides many opportunities to increase the number of people who know about your business, your goods, and/or your services.
No matter how successful your physical stores are, there are obstacles that cannot be overcome, including:
The final volume of visitors – limitation in profits;
Fixed costs, even in the absence of revenue – a waste of resources;
Restrictions by landlords – lack of flexibility;
If you have diversified the flow of customers who use your services/products through your online presence, but without cutting costs for your physical objects (if this is of course possible), this allows you to keep the current state of your business relatively unchanged after the end of the crisis, but also adds the opportunity to expand your business while others shrink their own, among customers who have never bought from you before.
Advertise during Pandemic
The most important lesson I learned from my advertising course a dozen years ago at university was that everyone cuts advertising costs during a crisis because it’s easiest to cut something you don’t understand.
As a continuation of the lesson I mentioned above, it is our absolutely reciprocal strategy, namely to double and triple the advertising budgets of our clients.
You will ask why, if everyone reduces budgets – we increase them? Very simple – if your competitors do not participate in the show, then the show is yours, ie. in practice, in some rather busy niches, for example, the cost of SEO and PPC has been sharply cut.
This allowed us to rank No. 1 in organic results in 2 times less time and to dominate Google Ads.
The crisis is a crisis for some, but an opportunity for others. Just like the pandemic we have witnessed. This is the exact moment when from a business unknown to anyone you can become a leader in the sector in which you operate in just a few months. Why – because others are scared, and you are the only brave ones.
Optimize your costs during the Pandemic
The coronavirus pandemic with COVID-19 is also an excellent opportunity to optimize your team, your business model, and even your production process.
Think about what businesses have done?
That’s right – they fired some of their staff. What part is the question? And again, you guessed it – the one that can be easily replaced with minimal losses, ie. left their best specialists in high-performance cores that do more work at the lower total cost.
Through this approach, the business got rid of employees and workers who did not give a high enough value to the product/service they represent.
On the other hand, those who remained in the solid business cores managed to increase their efficiency – at least to be calm about their jobs during the pandemic.
The vacated physical locations have ceased to be a heavy item of expenditure, freeing up a huge resource for aggressive investments in digital infrastructure and online advertising.
To summarize the situation:
Fewer staff costs;
Fewer business costs;
Less inefficient time;
Improving staff motivation and/or qualifications.
Of course, the benefits for individual businesses may differ, but they are visible to those who think rationally, not emotionally.
Do you know what Mitsubishi did in 2020? They closed their production facilities in Europe. Why? Because they generate losses.
Where did the resources that were invested in these facilities until yesterday go? They were redirected to the most efficient divisions of the company, which generate the highest return for every dollar invested.
You don’t have to find hot water – all you have to do is step on the shoulders of corporate titans and learn from their solutions and, more importantly, ask yourself why this is happening and what the effect will be.
Plan the unplanned
You’ve probably heard the line “Hope for the best – be prepared for the worst” many times. You probably don’t know that its author is actually one of the leaders of the Muslim League and the “Father of the Nation” of Pakistan – Mohammed Ali Gina (born Mohammedali Jinabhai).
The truth is, you can’t be prepared for everything. “Everything” should be understood as too wide a range of issues, which is difficult to summarize even by the most powerful computers and the largest and smartest teams on the planet.
The only thing you can do is “expect the unexpected”, which is actually the fundamental message in the quote above. No, we do not mean to do what you have to do, but to do what you want, in fact we mean the exact opposite.
Although we cannot define a final list of possible negative scenarios for our business, what we can define are the levers to deal with potential problems.
And although we cannot list every problem, we can classify it as a separate vector, which uses specific measures to overcome it.
Instead of waiting for the problems at the entrance, we wait for them at the exit – these are the only 2 points where you can influence the circumstances to your full potential. Most of us cannot predict crises like the current one, but we can develop scenarios for their management on a principled basis.
Imagine, for example, that you plan to increase sales, but it turns out that humanity is in crisis and your sales are collapsing. Do you know what to do? What are the management, marketing or other levers in your plans to act proactively in the situation and to alleviate and even use the circumstances to your advantage?
Now imagine the loss of staff. Do you have a plan for what to do if this happens? If you have – then you have planned a few lightning actions with which to react again.
The more problems that can actually occur in different circumstances beyond your control and that you have defined and considered in advance, the more “sleep measures” you should have. The more plots and measures you have planned for them, the less you leave to chance.
To distinguish a specific problem from a problematic vector, we will say that a specific problem is that an employee leaves, and a problematic vector is when most of your employees leave, ie. for the latter there is a causal link, and the former is highly likely a special case.
Remember that the more emergency scenarios you have, the better prepared you are for anything that could happen to your business.