Ohio Governor Mike DeWine’s Stay at Home order, which took effect March 24th, shuttered thousands of businesses deemed non-essential and brought countless industries to a grinding halt. Restaurants, retail stores, manufacturing and processing plants. As the state moves toward potentially lifting the COVID-19 restrictions starting May 1st, many business owners are considering the struggles they will face as they reopen after the shutdown. As of yet, plans for reopening the state are tentative and non-specific. No indication has been made which non-essential businesses will be able to reopen first or what restrictions will remain once they have opened. However, one thing is certain – business owners across all industries will face some of the same challenges as they reopen, but there are things they can be doing now that will help once their doors are allowed to open.
Struggles with Employee Retention
One of the most challenging struggles for businesses reopening after Ohio’s COVID-19 shutdown may be employee retention, especially for those employees earning an hourly wage. Any successful businessperson knows, employees are easily their company’s biggest asset. Unfortunately, many businesses across the state, when ordered to close their business or significantly reduce onsite manpower, were forced to furlough employees, often without pay. While unemployment benefits are helping some, many furloughed employees are taking positions in other industries in order to make ends meet. These employees may not be available to return to work for your business or they may be inclined to stay in an industry less likely to be affected by future layoffs.
In order to be prepared for employee shortages (and to raise company morale), businesses need to be in regular contact with their team. Weekly check-ins via Zoom meetings, emails, or even text messages will go far to demonstrate your commitment to your team. Consistent contact with your employees will offer reassurance by showing not only that you care about them and how they are handling the current situation, but also that you are committed to rehiring them as soon as possible. Maintaining regular contact with your team will also alert you to any employees who are not planning on returning, allowing you to begin searching for potential replacements – possibly even beginning the training process for any new hires – now. A good team is a well-oiled machine. The more you can do now to keep your team connected and intact the better situated you will be to reopen your business once the restrictions are lifted.
Struggles with Customer Retention
Economists agree that COVID-19 has launched us into a recession that may take years to recover from, which will lower the demand for certain goods and services. Depending on your industry, many of your customers may be suffering from significant financial hardships brought about by the COVID-19 shutdown. If your business sells directly to the public, providing “non-essential” goods or services, your customers may be restricting discretionary spending until the economy (and their own financial situation) is less precarious. For the same reason, if your business provides goods or services to businesses that sell directly to the public, you may also see a slowdown in what your clients are able to purchase.
Maintaining a connection with your client base during the COVID-19 shutdown is essential in fostering customer loyalty and establishing the goods and services your company offers as essential. Furthermore, going the extra mile for customer service and appreciation will be critical during these tumultuous times. Reach out as often as you can (and as often as is appropriate), letting your customer base know what services you are still offering throughout the shutdown. Consider offering incentives to maintain customer loyalty. For example, Panera recently accounted they would be offering 20% off gift cards to all customers and two free months of unlimited coffee to current MyPanera+ Coffee subscribers, their newly launched unlimited coffee subscription service. Consider too the philanthropic contributions your company can offer to help during this pandemic. Paper Twigs, a local stationary and floral shop, has been fostering community spirit while also promoting their brand by mailing complementary hand-crafted cards to customer’s loved ones who are employed as essential workers throughout this crisis. And now, they are offering a line of Corona cards that are hugely popular (occupying a niche in the market that larger retailers are not yet able to meet). Consider the ways your business can be an asset to your clients and your community throughout this pandemic, and how you can shift your business from “discretionary” to “essential.”
Struggles with Supply Chain
The sudden shuttering of thousands of businesses across the globe has caused a limit to the supply of goods and services, known as a supply chain shock. Any breaks in production and manufacturing can have a wide-reaching ripple effect on other industries, which can create an even greater supply shortage. For example, many automobile manufacturers have halted production, leading the steel and aluminum industries to slow production of their goods. For any business relying on the steady supply of steel, there may be a shortage that will impact its ability to meet customer demand. Moreover, as businesses are allowed to reopen after the COVID-19 shutdown, further supply chain issues may occur if those supplying goods to businesses do not resume operations before the businesses open. If your business relies on vendors who have been forced to close or limit production, this may cause an interruption in your own supply.
The best way to get ahead of issues with your supply chain is to maintain regular contact with your vendors during the shutdown. Reach out to see whether they have been forced to halt production or whether there is an interruption in their own supply chain that will impact how much they will be able to provide. Knowing of potential hiccups in your supply chain before reopening will give you a chance to line up new vendors now to ensure your business is able to get up and running as soon as the operating restrictions are lifted.
What You Can Do Now
The planning and preparation you can do now, even as the shutdown continues, will help you be better positioned moving forward. Evaluate your business’s current cashflow, conserving everywhere you can so that you can redirect funding to areas that will help your business thrive. Consider where your money is best spent; if you can afford to pay your employees during the shutdown, doing so will foster more loyalty and help you get off the ground running once businesses are able to open back up. Get in contact with your business banker and insurance agent to make sure you are fully covered to weather this storm and that you are taking full advantage of any programs that may be available to assist you.
One of the best things a business owner can do is talk with a management consultant who can provide insights into the specific struggles their business may face. At Net Profit, we help businesses get ahead of a problem by taking a proactive, rather than reactive, approach to potential cashflow, operation, organization, or management issues. Contact us today!