I know it seems hard to imagine, but this too shall pass. And what will small businesses look like when it does? While no one knows for sure and generalization is an obvious mistake, a probable answer for many is, a lot different than they looked before. Hopefully we will have learned something about adaptation in this period that will inform how we look at the future.
We certainly have a ways to go before we emerge into whatever light there is at the end of the coronavirus tunnel, and while it may be difficult to imagine that time, it behooves business owners to start thinking now about what that world will look like and how that will affect their businesses.
The first, darkest, and most obvious question is, should I continue? For some small business owners, who have been at this a long time and who just can’t envisage re-inventing themselves once again, that can be an understandable reaction. Those owners need to take that analysis one step further to determine if there are enough assets and potential in their business to make a sale attractive to a buyer. Business advisors and brokers can help with that process, as can a long, thoughtful discussion with one’s significant others.
But for other owners at different life phases, or in different industries or financial situations, the analysis changes, as do the decisions stemming from that. Questions such as how to adjust their product for altered demand, how to continue to deliver on that product, and how to finance what may be a period of reduced sales arise.
It seems certain that decreased demand will be a fact of life here in Hawaii for the immediate future for many businesses. We are heavily dependent on tourism, as we all know (23% of GDP), and UHERO’s (University of Hawaii Economic Research Organization) pessimistic forecast is that it will take 12-18 months for that to recover. Hopefully that is too pessimistic, but in any event, a very large economic driver will be limited for the duration of the downturn.
Turning to what we’ve learned during this period of stress and business interruption, one thing stands out, and that is the feasibility of working remotely. Can or should that be incorporated into your ongoing business? If it can, it opens you up to new populations of workers you might not have been able to access previously: workers living far afield of your business site and very part-timers for whom meager hours might not have been worth the effort before. It may also open you up to new remote markets, and it certainly can have a positive impact on your ongoing brick and mortar expenses, something that may be crucial for you at a time of recovery.
Hand in glove with remote work is the use of the internet as a business tool for generating sales and developing a presence. At the SBDC, we’ve preached for a long time that having a good website is a crucial tool for 21st Century business. Now may be the time to spend some time and money in upgrading your web presence to make your business more attractive and accessible to consumers and to potentially shorten your recovery curve.
Aligned with this is automation. Are there things you can do to automate your operation? Unfortunately for our economy, there is a flip side to this strategy in a resulting requirement for fewer workers, something that will not be a plus for our local economy with our sudden spike in unemployment. That option is out there though for some businesses.
But what about the many businesses that just aren’t amenable to remote work or automation, and here a prime example is restaurants. It will be likely that as we re-deploy our economy the raw materials available for restaurant profitability, customers and tabletops, will be limited. Many customers are tourists, and there has been discussion of limiting restaurant occupancy by spreading tables further out.
Restaurant owners are likely much further down the line of thinking about this than I am as this reality is staring them right in the face, and are surely thinking about how to re-package their product with things like take out, ready prepared meals to stock up on and the like. Strategies some restaurants are using to attract customers that could carry over into recovery are a variety of daily changing specials, heavy social media advertising, and order and pay ahead convenience to take some of the unpredictability out of staffing and food prep. Whatever steps are taken, it’s clear that the restaurant industry is one that will see big changes as we recover.
Breathe, take stock of your business situation, plan for the future, and ask for help if needed. This too shall pass.
Dennis Boyd is the director of West Hawaii Small Business Development Center
Hawaii SBDC Network is funded in part through Cooperative Agreement No # SBAHQ-13-0048/0001 with the U.S. Small Business Administration and the University of Hawaii at Hilo. All opinions, conclusions or recommendations expressed are those of the author and do not necessarily reflect the views of the SBA