COVID-19 is the hardest hit we have taken in recent times. Never has the world been more united than now in fighting this persistent virus. Regardless of country and city, there has been an unprecedented loss of lives and livelihood. The most vulnerable among us, those with pre-existing health issues, socio-economic weakness, and risky jobs felt the maximum impact. But aside from the health and wellness of people, small businesses took a massive hit too.
Usually, the profit margins and reserves of small businesses are minimal and these businesses rely a lot on face-to-face interactions. COVID-19 and the subsequent lockdown put these businesses at risk of closure. Moving forward, it’s become very clear that business owners must take specific steps to safeguard their future during situations like this.
How Can Small Businesses Build Resilience in a Post-Pandemic Age?
According to a PwC survey, 71% of CFOs interviewed were afraid of the financial impact of COVID, including effects on results of operations, future periods and liquidity, and capital resources. The impact on small businesses is likely to be much worse. While the outlook for the future is positive there were many concerns regarding the second-wave of COVID-19, and the potential to disrupt customer intent as well as normal work. What are other issues that companies must look into? Let’s explore a few in this blog.
Become Recession – Proof
Around 64% of respondents were afraid of a global recession. The recession of 2008 left companies reeling. It took large-scale companies an average of 4 years to recover and small-scale businesses 6 years. Even now, it will take smaller businesses at least 5-6 years to recover. Most smaller businesses entered the pandemic with razor-thin profit margins and low economic resilience. A McKinsey survey found that nearly one-third of small businesses were working at a loss or breaking point even before COVID.
Use insurance policies to protect yourself from unforeseen challenges. That can help settle loans, credit dues, and safeguard small business owners financially against situations that are financially taxing. Insurance helps manage risks and create a cushion against losses.
Empower Your Employees for the Long-Haul
41% were worried about the impact on the workforce and the drop in productivity. During COVID, many companies were unable to pay their employees and had to downsize their staff. Post COVID-19, companies must look after the employees they have left with them. To truly recover, businesses will have to encourage sustainable and equitable recovery. Focus on creating time for self-regeneration and community engagement, as well as enhancing the autonomy and health of employees. Retraining staff and teaching them skills to prepare them to fill multiple roles can also help avoid future layoffs and enable multitasking.
Doing so will ensure employee loyalty and productivity in an uncertain future. Equipping them with health insurance, life insurance, worker’s comp, and other such policies would encourage them and strengthen their affiliation to the business. Protecting employee health and safety is tantamount to creating a resilient future.
Use Digital Solutions
Another huge problem was the decline of consumer demand in walk-in retail situations. To counter this, use digital solutions to build a loyal base of customers ready to purchase your products regularly. The lockdown saw the rise of digital marketing and online solutions to reach out to customers. Strengthen your digital presence and keep abreast of technological developments. This will help you stay in touch with your customers regardless of their physical location.
Some popular platforms that emerged as champions of small-scale businesses were Etsy, Instagram, Facebook, and Amazon. If you intend to be a seller on Amazon, do ensure you get General Liability insurance to safeguard your business.
Fight Uncertainty by Insuring Your Company
There are many kinds of insurance policies that can be adapted to help small businesses through grave uncertainties. These include using public-private pools to cover non-damage business interruptions (NDBI) and other policies that can help with loss assessment, claims management, and payment infrastructure. Use these to channel compensation to the entitled people, businesses, and processes. Insurance companies are always in touch with government bodies as this would be a better use of tax payer’s money than ad hoc measures used to bring relief to companies.
Adapt to New Business Models
The pandemic saw remote working and work-from-home (WFH) become the new norm. Prepare to have such innovations become a permanent facet of the work culture post-pandemic, wherever possible in your small business. Prepare for this by making your processes more agile, and training your staff to be flexible. This is the only way to avoid a decrease in productivity while adopting new business models. Many WFH professionals have taken an extra step to have their houses/condos insured as they double as both homes and offices. This could be a part of your company’s strategy as well, to boost productivity regardless of employee location.
These are a few steps to build up protections and get prepared for situations such as the one we are all in now. While we cannot predict disasters and calamities, it’s in our hands to build protection as much as we can. As they say, prevention is better than cure – and insurance is a sure-fire preventative measure to protect your business.