Adapt? Pivot? Stay The Course?
Written by CMG News Contributor, Doug Carleton
So many things are screwed up in our normal lives and the lives of many small business owners that changes that might normally have taken months or longer to plan and execute are suddenly happening almost overnight. Keep in mind though that approximately 80% of the working population still has jobs and are buying. So, the major question in many cases is how to keep them buying. Making changes may only be fighting the fire to survive, but survival is the end goal. There are going to be many new opportunities appearing as a result of the changed world that we will be living in, but you have to put the fire out first. What are some choices?
ADAPT
Most people are creatures of habit to some extent or another. When times are good, people might tend to keep buying in the same way out of habit. But a downturn could cause some customers to make decisions on where to pull back. They often start with products or services that they find the least valuable or replace them with something cheaper. The business model that was fine in good times may have to adapt to new consumer behavior. Maybe if you have historically sold a wide variety of products or a wide selection of a particular product it could be an opportunity to pare down your offerings to the bigger or more profitable sellers. Maybe you have to find a new way – or at least one you’ve never paid much attention to, to communicate with your customers. This could be a real opportunity to tighten up your business practices and get rid of inefficiencies. You could come out leaner and stronger.
PIVOT
Probably one of the biggest and most important pivots that a lot of small businesses are making and should continue to pursue is to increase their online sales. One really interesting example is a 47-year old contemporary furniture manufacturer and retailer in New England that had eight retail outlets selling the furniture it manufactured. Social distancing forced the shutdown of all the retail locations and almost 115 employees were laid off. The owner realized that his only chance for survival was to start selling online. Showroom managers videotaped simple showroom tours on their iPhones. The company sold over $200,000 worth of product in three weeks. The owner started photographing dining tables, chairs and desks in his flagship showroom. Orders started to come in, continue to improve, he has brought almost all employees back and has rekindled his plans to open a new store in Philadelphia. All because of online marketing.
STAY THE COURSE
A retailer of college and team sports apparel had to temporarily shut his five retail stores. But he believed in what he was doing (he had been in business for 33 years), so he stocked up on what his best-selling products had always been and waited. Because he knew that what he was selling provided an emotional attachment to people’s teams he stayed the course. He obtained a $100,000 PPP loan and when he reopened his stores in June his sales took off. What about your course?
This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug is a mentor with SCORE, Startup Virginia, and Lighthouse Labs, and has 25+ years of experience in small business finance including 12 years in SBA lending. To contact Doug directly, please email him at sbaloanspecialist@comcast.net.