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BUSINESSES SURVIVING COVID-19

These days there is a plethora of information available on television, the internet, and various news media. Many reporters have adopted curation journalism. This type of reporting requires the correspondent to sift through all the available information, find the relevant facts, and craft it into a thorough accurate message. In this week’s blog post I have reviewed much of the current information obtainable from credible sources to forecast what businesses can expect as this pandemic continues and its aftermath. A CDC spokesperson stated on TV that a vaccine may not be available until 2022 which indicates the economy will be in a state of oscillation for the next couple of years.

One of the businesses that have been dramatically affected by this epidemic is the foodservice industry which I will use as an example for this blog post. Some restaurant owners to keep the cash flowing are offering customers pickup and delivery options. This is not a long term solution, because the sales volume is not sufficient to cover the overhead costs. This tactic is covering some costs, but not producing enough income to pay all expenses and earn a profit. To stay in business, the restauranteurs have to be malleable to the current market forces. They should consider finding smaller locations for cutting expenses or partitioning their existing building and subletting. With a smaller retail space consisting of a kitchen, check out, providing takeout, and offering prepackaged catered meals for home consumption.

The food supply chain is shifting most of its packaging from institutional to the consumer. Since institutional is in bulk containers, and consumer marketing packaging is more expensive expect prices to go up at the supermarkets.

Twitter just announced that employees who are currently working from home can continue to do so after the quarantine is over. There are benefits for the organizations that adopt a work from the home business model. Less office space is required which lowers fixed overhead costs. For employees, there is a restructuring of office hours. In many cases, the employees can accomplish their assignments at their own time and schedules. Many of these workers were employed in downtown locations which have many businesses that depend on their patronage. Just a 20% drop in sales volume can be devastating for these businesses.

As the marketplace changes entrepreneurs must look for opportunities for growth and expansion. As stated previously delivery for restaurants will increase exponentially thus creating a need for companies like GrubHub. Also, the delivery service can be extended for many other businesses such as dry cleaners, retailers, and grocery stores.

In closing, people are creatures of habit, and as time passes the consumer will adjust to the new economy. Lifestyles will change and consumer buying habits will be different. Restaurants will eventually reopen, but they will accommodate fewer patrons due to social distancing. The operating costs will remain the same which will be a problem.

Entrepreneurs will have to look for niches in the marketplace and capitalize on them. My former office-mate, a Khe-Sanh Marine used a phrase that applies to the current situation, “Improvise, Adapt, Overcome.”

Notice: Effective today, 5/15/2020, all future blog posts will be published on the first and fifteenth of the month.