Collaborate To Survive The Pandemic
Written by CMG News Contributor, Doug Carleton
Collaboration can be defined as a working practice whereby individuals work together for a common purpose or to achieve a business benefit. As the economy begins to slow again, anything that offers benefits could be welcome, and collaboration may be one of them.
The initial excitement over having the vaccines – which is truly a remarkable feat of science, is beginning to bump into a few realities. None of these are disastrous, but they will assuredly slow the distribution of the vaccine to the public. For example, the government didn’t order as many vaccines as it could have, so it’s going to push the number of vaccinations a little farther out into the spring. There is a substantial segment of the population that will not take the vaccine until it has proven itself safe as well as a large number who say they will not take it at all. When you see a bold headline at the top of page A8 of last Thursday’s Wall Street Journal saying “Doctors Say Side Effects Are Possible,” with news of some side effects that have appeared already in England and are all over the internet, it may give a few more people pause. Which, in turn, could slow the adoption of the vaccine.
There is no question that the economy is recovering and that the future is bright, and as I have pointed out before, there is an enormous amount of cash building up in people’s pockets desperate to be spent. Yet, many small businesses operate on very tight margins and have limited cash reserves or access to credit and loans. So every day that someone is not buying because of vaccines not getting to them as fast as hoped may be that last day that the small business can survive before it runs out of cash.
So maybe a collaboration with another business in some form may be something to consider. It could create new customer opportunities or opportunities for cost savings, such as sharing rent in a space that the collaborating partner may have in excess but is still paying rent on because they have had to downsize. Or a restaurant suffering from the reduced capacity but with kitchen facilities that could be used by a producer of some other food product. Large companies could play a role in supporting small suppliers or customers. One perfect example on a national and global scale is the production of vaccines. The government either guaranteed to buy or signed agreements to buy large quantities of the vaccine. Pfizer and Moderna knew that there was demand, but would they have moved as fast without guaranteed sales? On a more local level, a large company might give a small supplier a contract to buy X amount of a product that they are already using in their supply chain but only buy when they need it. This would give the small business something firm, a contract, to take to the bank to look for working capital.
So collaboration might be just one more possible tool to carry you through until business starts to improve, but it could also mean new growth opportunities.
This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug was 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 firstname.lastname@example.org.