Covid-19 has presented businesses with new risks and new opportunities. Many businesses realized that their DRPs (Disaster Recovery Plans) and their BCPs (Business Continuity Plans) were inadequate to deal with the risks that were presented by COVID-19 pandemic which disrupted business in materially adverse ways. 40 days into lockdown, many businesses have updated their plans and seem to have covered most basis. However, the COVID-19 also brings some opportunities that are worth thinking about and turning into profit. In this short article, I highlight some of the key opportunities that have been presented by COVID-19 that businesses should not miss out on if they have the resources to tap into them.
1. Growth through acquisitions
The world is full of great start-up companies that are lean and continuously find better ways to compete with bigger and older companies that might have run out of fresh ideas that add value in an innovative way for consumers. However, many smaller companies will find it difficult to survive on their own during these trying times. This may present an opportunity for bigger businesses or businesses with some cash reserves but lacking innovative growth strategies. This can be a win-win situation as the innovative business owners can still have shareholding and tap into the networks and resources of the bigger organization. While the bigger organization can add some needed revitalization of their growth strategy. It is important to note that during lockdown, consumers have had enough time to reassess their need and value of traditional businesses and many consumers may have found alternative ways of meeting their needs than the old traditional ways. Businesses that fail to innovate may soon become irrelevant. Some examples of industries that could do with innovation whether through internal changes or buying into a small business that has innovated successfully, include:
Traditional news channels
Restaurants and fast food outlets
2. Cost reduction
Lockdown has demonstrated to businesses that there are certain costs that are not necessary for the successful running of the business. Instead of going back to normal after the lockdown, there is an opportunity to review several costly activities in the business, including:
Travel – before COVID-19, business travel was accepted as a necessity. In many businesses, getting on the plane to go and have a meeting in another city was done too often and too easily. The increased use of technology to do business has demonstrated that not every meeting needed to be face-to-face. Travel budgets can run into the millions on an annual basis
Office space – the tradition of limiting the working place to an office has been strongly put to the test and found wanting during COVID-19. There is an opportunity to explore continuing with a significant number of staff working away from the office and finding ways to manage them better. This can give staff flexibility and job satisfaction, while lowering the size of workspace the company needs to rent. In the next lease review, there is an opportunity for many prepared companies to rethink the size of the space they rent. While many companies had already started using less floor space, there are still many others that have kept to the traditional workplace. COVID-19 has opened their eyes to alternatives, and this must not be a missed opportunity. Maximizing on this opportunity will require better strategies around employee well-being and management of productivity.
Flexible working hours – even with companies that will resume work in traditional office spaces, there is an opportunity to introduce flexible working hours for staff in order to maximize social distancing. This can improve staff morale and productivity as staff will work harder to ensure the flexibility is not rescinded. Increased productivity will add to the bottom line
3. Supply Chain opportunities
Overtime businesses get comfortable with the suppliers they have built relationships with. This may lead to complacency and being limited to the technology and pace of your favored suppliers. The disruption that COVID-19 has had on supply chains has given many businesses an opportunity to experience alternative suppliers and realize whether they have been missing out of innovative ways to meet their business needs. There are also opportunities to identify areas of the supply chain that are more efficient and cost-effective if they are performed internally.
This is an unprecedented time for business. And it is easy to only focus on minimizing risks, but it is important to also not miss opportunities that are presented. The businesses that will come out of this pandemic with more innovation, less costs and resilient supply chains will remain appealing to the consumer who has had more time to rethink about her needs and how they are met by businesses.
Xolani Sithole is Founder of Fund’ Unothe.