In the short term, this crisis may impoverish us in many ways but the growth and change that we experience as a result, stand to teach us some invaluable life lessons.
During a crisis it’s important to keep structure in our life - get up, get dressed, create a routine and good habits.... we don’t want this to feel like an extended holiday and all of a sudden it’s time to go back to work and we have zero motivation! (And a mountain of things that need to be done to catch up with our competition!)
I’ve found that social distancing measures have presented a great opportunity for clarity. It’s an opportunity to think about 2 key words - meaning and purpose - what is the meaning and purpose of my business and how do we grow from here.
This time to think has been a luxury that I don’t usually get and a reminder of how beneficial it is to remove our self from a situation to really see things clearly. Perspective is key.
The initial shock of lockdown made me think of a submarine losing power. Everything goes into free fall and nobody knows what’s happening; people panic, unsure how to react and not knowing what lies ahead. Eventually the submarine hits the ground and there is stillness.... even though it’s far from ideal, it provides a surreal certainty and a platform for you to move forward from - stabilisation as such - so now you have to think ‘what next’.
We are now at the ‘what next’ stage and to me this is about going back to my business plan and implementing what I’ve learned over this time. One thing I know for sure is that our competitors are all planning ahead and how they will make the most of the situation when we come out of lockdown. Without suggesting people create an entire new business plan, we would be foolish to think that what we were doing before is going to work equally well after lockdown. So now is the time to innovate.
I’ve gone back to basic with a couple of tools that I would also encourage other small business owners to take some time to think about which are outlined below.
SWOT analysis - your strengths, weaknesses, opportunities and threats may have changed over COVID; what was potentially a threat before many now be an opportunity and what was a strength could be a weakness or vice versa, so take time out to be clear on where you stand. You have to be honest with yourself or it’s a pointless exercise. The stark reality may be concerning but you know what you are dealing with and what is required to move forward. Are you ready for social distancing restrictions in your place of business? Is this currently a strength or is it going to be a weakness as it is a small but highly populated environment? How will you manage this? What opportunities do you have that you can now capitalise on? Do your clients know about your strengths? If not, how will you promote these strengths? Remember people don’t know what they don’t know so it’s important to make sure you are promoting your strengths effectively.
Competitive analysis - how do you look now compared to your competitors? The porters 5 forces framework will give you a clear understanding (and again, it’s important to be honest with yourself on this) in terms of:-
a) Competitive rivalry - how many competitors do you have? Who are they and how do their products compare to yours? If rivalry is intense, be prepared for mass price cuts and promotions from your competitive set. On the flip side if your competitive set is low, you have great strength and potential for growth.
b) Threat of new entrants - has COVID created a larger opportunity in your sector? Is the market going to be saturated with competition? Is it easy and low cost to enter your market or are the barriers high?
c) Threat of substitution - how easy is it for your clients to make a substitution for what you do? If they can do what you do at home for half the price, as much as they love you, this may be the only option for them right now - how you can you help them? A little effort now can go a long way later…
d) Buyer power - how much power do your buyers have? Can’t they move easily to competitors? To avoid this, how can you add value to them to increase or build loyalty? Do you have a few clients that you are very dependent on or is it a broad range of clients so your risk is spread? If you have only a few clients who you depend on, now is the time to start thinking about adding value and getting more clients.
e) Supplier power - how easy is it for your suppliers to increase their prices? How have they been affected by COVID and will this impact you (good or bad?) Are you ready to switch suppliers quickly if need be, or can you talk to your suppliers about payment plans, alternative options, etc?
Cash flow - Cash is everything. Now is the time to look realistically at your cash flow and see what you can cut back on... what have you learned during this time of restriction, what is necessary and what’s a luxury right now? Going back to the submarine analogy, we may get the submarine to the surface but without cash to keep us going and paying the bills we could find ourselves sinking again, very quickly. Look hard at your cash flow and how to get through the next 6-12 months. As long as we have enough to keep the submarine stable, the future can be bright!
To find out more about Roz Colthart, visit https://salonstudios.co.uk/