Coronavirus and the possible effect on UK small business
Today COBRA met to discuss whether the UK is to move into the next phase of measures to slow the spread of the disease.
This next phase includes “social distancing”.
They conclude that currently, it is not needed, however it is suspected it will be at some point, possibly even within the week.
If, and when, this phase in invoked, even if you do not have an event-based business, it is likely that you will see the effects on your business as the country draws back from going out and is overall more cautious with spending. That is, if you have not already seen some effects.
The expected effect on Bricks and Mortar businesses
If you are running a physical business (as opposed to e-commerce only, or online service based), we expect that you will already be starting to feel the effects of downward footfall.
This is certainly the experience of our clients over the last week.
With decreasing footfall and revenue, what can you do to ensure that your business stays healthy during this time?
You should pretty rapidly prepare for at least a 50% decrease in footfall over the coming weeks, and if the disease progresses onwards, then the footfall decrease will be even more severe.
We also expect to see average transaction values decrease as tends to happen in periods of uncertainly – particularly for products which are “wants” rather than “needs”.
And with a stock markets crashing around the world this will only increase people’s economic worries and hence a lower likelihood of them purchasing anything other than necessities.
The exception to this is, if you are selling anti-bacterial soaps, wipes, dried foodstuffs and things that the public are stockpiling – then you will have a spike.
The expected effect on Online businesses
For online business owners, we expect that you will also see effects on your business. As stock markets dip and people are generally uneasy, spending decreases on many things – therefore you do also need to be prepared.
And just like the bricks and mortar business there are steps you can take to ensure your business stays as healthy as possible.
Firstly – ensure that your expenses are as lean as they possibly can be.
Making sure that there is no spending that is not either delivering a positive return (for marketing and advertising spend you are doing to need to check this very regularly as this will change day-on-day at the moment, as people reach to news stories and health advice) and/or spending that is 100% necessary to keep the lights on.
I speak about how to do this exercise here: https://youtu.be/mfVtCYC5g0YSecondly – you need to review what can be done to protect revenue as much as possible.
Are you in contact with your email list regularly? If not, it’s time to start now – make sure they know what precautions you are taking (particularly if you are a bricks and mortar business) and that you are doing everything in your power to make your place of business a safe place for them and your team (and of course, do everything you can do make sure that is the case) If you are a bricks and mortar business – Is there any part of your business that you can move online? This will be impossible for some, but think outside the box and see if it might be possible in any way for you, to move anything you to do a more visual arena.Can you sell via your website? And make sure your past customers know about it if you can…Can you sell via Facebook or Instagram? And make sure your past customers know about it if you can…Can you offer consulting services around your current business that can be delivered virtually?For all businesses you are going to have to be extra clear on how much value you deliver – you don’t need to be cheep – but you do need to deliver value. Because in uncertain times people focus highly on value and use that to make most buying decisions – therefore get really clear on this for your business and ensure you are communicating it. Thirdly – what if you (and/or your team) become ill – is your business able to still operate?This, of course, if not just relevant for COVID-19 – it is relevant at any time, should you get ill, or be in an accident…what can you do to ensure that your business does not collapse?Do you have systems and processes documented so that someone else (a family member, friend, or virtual assistant) can pick things up and cover for you?Is the business running at a profit so that you can afford to pay someone to do your work if you become unwell? (This links back to the first and second points – and making sure that you have a buffer in place for that type of spending if necessary) Are you protecting your team? Allowing working from home where possible? Ensuring that you have the systems in place to allow that where you can (not usually possible with many bricks and mortar businesses though) and making sure they still feel part of a team and communication is kept open. Fourthly – check your business insurance policies.Are you covered for this type of event?Is your revenue protected? Or your customers? Or your staff? Or yourself?
It is important not to panic but it is also important to do what we can to ensure that our business can be as healthy as possible during this outbreak.