The pandemic has been very tough for small businesses. While for some business has slowed down, for others, it has stopped altogether. Several small businesses have shut shop and many others are likely to follow suit.
What did some small businesses do that helped them survive the pandemic while others failed to survive?
As the name suggests, emergency funds come in handy in times of emergencies. And the pandemic is perhaps one of the biggest emergencies any small business has faced in its lifetime. Small businesses which had a cash cushion to fall back on had more chances of surviving the pandemic than others. With the pandemic situation changing, it has been difficult for businesses to plan ahead, as an improvement in the situation has been followed by another wave, thus throwing their plans out of gear. Small businesses that have a cash reserve to fall on could live to fight another day.
This is something that every business needs to do, whether during a crisis or not. Each small business should look closely at all its costs-whether it is rent, payroll costs, utilities and so on and look to reduce costs as much as possible. Small businesses which were able to cut down on overheads to a large possible extent had better chances of surviving the pandemic. The sooner a small business was able to cut down on non-essential costs, the higher was its chances of survival.
Some income streams died down entirely during the pandemic, ringing the death knell for small businesses in that area. Many small businesses which could tweak their business model to generate new revenue streams could ride out the storm. Small businesses which had the capacity went on to produce masks and sanitisers because there is a high demand for those. This again worked better for some businesses than it did for others. What small businesses have realised is the importance of having alternate revenue streams to depend on when one stops.
This was imperative even before the pandemic, but the pandemic has made it more vital. Businesses which had not focussed on digital were the ones the most hit by the pandemic. With the lockdowns and work- from- home, most people are staying indoors and connecting to the outside world through their phones. Hence, businesses which were not online had no way of reaching out to their customers. Also, just being online was not enough. It was important for businesses to have an online presence which attracted customers and translated into sales.
Whether a business was selling a product or service, contactless operations was the key to surviving the pandemic. Customers were staying in their homes, so a business had to go to their home instead. This was easier said and done for some businesses. Restaurants could focus more on food delivery; salon services could be offered at home and so on. But some businesses like gyms which cannot survive without physical presence had no choice. Overall, the learning for small businesses was to increase contactless operations as much as possible because even when the pandemic subsides, some trends are likely to continue.
Some of these lessons can be valuable for small businesses to survive future crisis situations.