By Sherry Lutz Herrington
As we move into unchartered times with the coronavirus disrupting our lives, we will likely see more financial challenges for small businesses over the coming months than we have in the last 10 years. Unfortunately, as with most pandemics in history, there will likely be a culling of the weakest in society leaving us with the strongest surviving.
I see the same thing happening with businesses.
No one really knows what is going to happen, but we will likely see massive changes in our economy and that in turn may affect you if you run or work for a small business. The most immediate change we are seeing is the impact the pandemic is having on the travel industry, most noticeably the cruise industry. However, even local events are being cancelled affecting anyone in an event related business such as event planning or coordinating, caterers, venues, staffing agencies, florists, photographers, and many more.
With such a broad reaching effect, the question becomes: who will survive?
I believe there will be a survival of the financially fittest businesses. Those with a stable customer base, a solid reputation, and the ability to pivot as necessary to accommodate changing times will be more likely to survive. As opposed to those struggling to get started or who do not have secure financial resources.
Depending on whether your business is a service provider or sells products could make a difference as well. If imports are massively restricted any dependence on foreign suppliers for products could cause disruptions in U.S. manufacturing thus leading to lost sales. If you can shift to a local or regional supplier, then you may be able to avoid disruptions in production.
If you sell a service, then you may be able to pivot more quickly and adapt as needed to target your audience more effectively.
Making swift decisive changes can reduce the impact of potential volatility because of unsure economic times.
As society shifts to accommodate the required changes to slow down this virus as quickly as possible, we will see a modification of a variety of long-established ways of doing business. From working remotely to learning to self-isolate will undoubtedly create a new demand for delivered goods, online resources and tools, and other creative solutions to new problems.
Likely, there will be a shift to more local and regional resources and less dependence on imported goods or outsourced services overseas. This may in fact improve business for smaller more local companies who normally struggle to compete against larger brands.
Ultimately, I think, we will not only see new businesses emerge to address new needs, we will likely see the demise of the weakest businesses in the industries hardest hit. Survival of the financially fittest will cull those businesses not able to quickly adapt and pivot in a new direction as needed.
Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She is also the author of Strong Women Thriving (https://strongwomenthriving.com/), a blog which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. Sherry is currently writing a new book that both shares her personal story and addresses financial abuse. She can be reached at firstname.lastname@example.org.