Adapt to survive: Changing your business model
I went to a local coffee shop for lunch (while I still could) and it was understandably quieter than normal. After eating my sandwich, I spoke to the owner about what they were planning to do in this uncertain time. “We’re going to stay open as long as we’re able to,” he said. “If people stop coming here, we’re going to get the message out that we’re offering a takeout service and for some a home delivery service. It’s adapt to survive.”
Coronavirus will place businesses big and small under extreme pressure, with cash flow being the number one concern. It seems to me that businesses have a choice. Adapt to survive. It won’t work for all, but can you adapt your business model?
Can you change what you do?
If demand for your product or service goes down or disappears, how do you keep a business going?
The government has already asked manufacturers if they are able to produce ventilators instead of their regular products. Clearly this won’t be possible for everyone. But in hard times, it’s worth considering what it is your customers need and if you can provide it for them.
I also read about a gin distillery in Scotland that’s going to make hand sanitiser. A great example of the adapt or die principle. Now if you ask me, gin is still going to be needed, but I guess hand sanitiser more so.
Can you sell online?
For retailers, the possibility that people will be told to stay indoors or minimise the amount of time they spend in public spaces could be crippling. For many businesses, such as beauticians or hairdressers, it will likely mean a temporary closure. However, if you sell pet food or baby clothes for example, you could sell them via an e-commerce site.
I have a wonderful shop where I live, selling women’s clothes and accessories. They are all too aware of the struggles they’re facing, so are advertising that you can buy from them online. They are also offering free delivery!
With the coronavirus pandemic changing daily, we’re unsure how long a normal delivery and manufacturing service will be running. But having an e-commerce site which sits alongside your physical location isn’t going to be a bad thing in the future anyway.
Consider your strengths and trust your ability to learn
If the worst happens for some business owners, how do they continue to create revenue?
It’s going to need flexibility and the ability to adapt. Think about where your strengths lie as an entrepreneur. Is it in manufacturing, sales, property or hospitality, for example? What other options exist in the market that you could take advantage of?
Would you be able to take part in online training to support your new business expansion? Do you have people within your business community who could work with you or advise you?
Other ways to adapt
If the options mentioned above aren’t possible for your business, there are other things you can do. To be honest, even if you are looking at ways to change your business model, you could look at these too.
- Carry on marketing your business
Marketing can often be the first expenditure to suffer when times are hard. However, letting your customers and potential customers know you are still there is vital. We’re unsure how long this way of working will continue, so you want to stay front of mind when business returns to normal.
The shop I mentioned earlier is actually ramping up its presence on social media at the moment. They are reminding people to shop local, reminding us it’s Mother’s Day this month and letting us know they are offering online shopping with free deliveries. Very clever if you ask me and a great example of this adapt or die mentality.
- Stop unnecessary spending
Do you need to continue with all of your subscriptions? Do you qualify for any rates cuts or government support? If you’re making less, you could speak to your suppliers about cutting back on stock. You should also check your insurance to see what level of cover you have.
For more ideas on ways to save, see our earlier blog.
- Get close to your accountant
When there are uncertain times, it can be very scary if you own your own business. Will you be able to continue paying staff? Can you cover your rent? Will your business survive?
Staying in contact with your accountant is important. They will be able to advise you on ways to preserve cash flow and help you claim any grants or loans available. They may also have connections to legal advisers and financial advisers.
If you want to make a big change and start manufacturing hand sanitiser, for example, they’ll guide you through the financial and tax implications of that.
I always think that the less money you have, the more savvy you have to be to make it go further. Your accountant should be in your corner fighting to keep you going and keep you profitable.
Now is the time to adapt to survive
It’s vital that small business owners dig deep, get creative where they can and consult the experts to help them. There is a wealth of information from the government for businesses too, so find out as much as you can on gov.uk.
I hope I can continue to support my local small businesses as much as I can and I hope in return they’ll support me.
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