6 Ways to Leap Ahead of the Covid-19 Rebound
How to begin the strategic shift from what's required to keep the lights on to what's needed to take full advantage when the economic recovery arrives.
For the first time since the global health crisis infiltrated every aspect of life and work, it’s now possible for small-business leaders to see the outlines of recovery and an economic rebound.
And while we typically think of business leaders as either experts of vision and long-term strategy or as tacticians with a gift for detailed work and short-term execution, we’re about to discover that this rebound will reward those with the best intermediate game.
Of course, we’re not there yet. For many business owners, the job at hand remains the intensely immediate short-game — surviving the winter, extending cash flow and paying their people. But we’re close enough to begin the strategic shift from what’s required to keep the lights on to what’s needed to take full advantage when the recovery arrives. McKinsey predicts what it calls “revenge shopping” as pent-up consumer demand is unlocked, especially in services businesses that rely on some level of physical proximity — event planning, a restaurant, a gym or a bingo hall.
As the outline of a post-crisis world takes shape for business leaders, there will be a premium on being able to bridge from actions that are built for this period of reduced revenue and operating losses to responding to the promise of warmer weather, increased freedom of movement and the new consumer confidence driven by broad-based vaccinations.
Winning the intermediate game asks you to be ready and able to capture renewed demand without being so diminished, depleted or defeated that you’re unable to participate when it’s time to move. It’s a plan for five months, not five days.
Here are six ways to ensure that you’re as prepared as possible to take action.
1. Calibrate cash flow
Determine precisely what your business needs to survive and on what timeline. What can you discontinue to preserve cash? If the question is how to make it to May, then redirect everything to roll through June and beyond.
2. Make your case
In preparation to secure financing in time to ensure you participate fully when the rebound arrives, start assembling the facts of your performance through the downturn and what you can demonstrate about pre-crisis revenue and margin. Document evidence of better times to come — for instance, new hospitality bookings, your new revenue sources, an uptick in product orders — to streamline the underwriting process for your lenders.
3. Anticipate inventory
As we get closer to our society reopening, you need to understand what this means for your customers and the readiness of your supply chain. Early movers building inventory soon may benefit from pre-surge prices. For example, if you have pivoted your company from making wraparound neck pillows for airline travelers to making face masks, you need a plan for pivoting again when leisure travel returns.
4. Prepare to hire
Whether you can add staff now or not, do the work to prepare. Write and post the position descriptions, identify candidates and consider providing nonbinding contingency start dates to secure a more reliable plan to move when demand returns.
5. Safety first
The most fundamental social changes stemming from the health crisis aren’t going to fade in a matter of months — masks and social distancing will be part of business operations throughout 2021 and likely well beyond. Take that into consideration when it comes to staff, general business practices and where you’re placing your time, effort and budget.
6. Work with the best accountants and advisers
A final key consideration is to make certain that you’re working with accountants and advisers who have the ability to help you leap ahead.
Last spring, we stepped off the map of the known world. We could no longer look to history or prior experience to predict the future or even make informed guesses. As such, the relevant data set on business performance started in March 2020; when most experts were working with incomplete information, it turns out that some accountants and advisers that could see data across larger numbers of similar businesses had the most complete, most real-time, most accurate view of performance trends.
Therefore, for example, an accountant or bookkeeper monitoring the multiple spas and nail salons in a specific area code could help business owners understand things that few other people knew. A prediction could look similar to this: “Since revenue is down 60 percent across the board in June and 45 percent in July, we can anticipate that approximately X percent in August and have reasonable confidence about Y percent in September or even the holiday season.”
For thousands of small businesses, these advisers became their GPS systems for navigating the dimly lit road of pandemic uncertainty. In exactly the same way that thousands of small businesses adapted on the fly, accountants and bookkeepers expanded their portfolios and took another step up the value chain as business advisers.
Those moves will be permanent, differentiating and sustained into the rebound because the value is indisputable. For business leaders, this type of intelligence coupled with the first five tips could mean the difference between barely surviving and thriving.
Entrepreneur Leadership Network Contributor