From lockdown to back to business, will we be going from pause to play or via restart?
I have spoken with many people in business recently and there is a very polarised view - many see the current situation as being on pause and when the government presses the play button, things will go back to normal. Okay, most people realise the back to normal will not be instant, but step-by-step back to normal we will go is their belief.
Others believe that rather than the play button being pressed, and we judder back to normal, a more realistic view is that our businesses will actually go through a restart process. This view is fuelled by the fact that we will not be returning to the economy as we knew it, but a different economy entirely - one that according to The Bank of England will have gone through the sharpest downturn since 1706. So, an economic environment nothing like any of us will have experienced in our lifetime, and this is based on what is regarded as an optimistic viewpoint.
According to the Financial Times, 20,000 more business failed in March than is the norm and there was a 23% decrease in new company formations. Figures for April are not available yet, but they are likely to show a worsening picture. No one really knows how many business casualties there will be from the current crisis, but expectations seem to be between 10% & 20% of businesses.
So, with unemployment expected to reach 10% and following the sharpest downturn in over 300 years, what will the new normal look like and how do we ensure that we survive the restart process?
Firstly, the mindset will be all-important. I am not penning this article to be a deliverer of doom and gloom, but I for one would rather face the potential challenges ahead, prepared and ready, than think we are just returning from a period of pause and not be ready for the trials ahead.
In true Darwinian fashion, post-Covid business survivors will be those that can transition to end up stronger, leaner and better adapted to the new economic environment they find themselves existing in.
Many businesses I have assisted in the past had seen the importance of cash flow forecasting, business plans and strategy when they were new start business, but once they got off the ground or achieved the funding they needed, then day-to-day existence was fuelled more by a head-down approach rather than having dynamic plans and strategy.
I believe the key winning mindset for business post-Covid will be to consider themselves in a restart situation and not just coming off pause. As such, a return to the basic skills and activities that were used when they were new start business will be required. This will include being open-minded in regard to the service or products they provide, how they provide them and what diversification or innovation should be considered in the speeded-up, evolutionary process that we need to live through over the next 12-36 months.
In an economy of the new normal with different client expectations, different margins, larger/medium-sized companies coming down to play in the small, school playground and one company’s diversification treading on another company’s toes, then rather than it being a return to running our businesses, it may well be learning to walk again first.
So, to summarise before the pause button is released, we need to stop thinking about getting back to normal - that no longer exists. We need to assess what’s changed temporarily, permanently and fundamentally and have an action plan upon which to restart our businesses.
Get help on your business restart by visiting a virtual 'Peerworking' surgery - held on a Wednesday and Friday Bi-weekly from 8:00 am-10:30 am.