(Photo via Wells Fargo)

Wells Fargo: Adapting Your Business — A Road Map

Originally published on smallbusinessresources.wf.com.

As the summer winds down, owners across the country are taking stock of how significantly COVID-19 impacted their businesses and are planning ways to rebuild. According to studies, from Wells Fargo and outside groups, most businesses have been forced to adapt their business models to weather the crisis.

Let’s explore how businesses are adapting in general, how you can adapt your business, and ways to ensure the changes you make stay relevant through 2021 and beyond.

How businesses are adapting

COVID-19 is causing unprecedented and ongoing global disruption. In the United States alone, three in four businesses told the National Federation of Independent Businesses (NFIB) they were negatively affected.

Recent Wells Fargo research confirms that sentiment: A number of small businesses reported they had downsized or paused operations during the crisis. This resulted in cash flow issues and for some, dramatic drops in business.

As 2020 progresses, that same Wells Fargo research showed small business owners split between optimism and fear. Some said their businesses will be “prospering and adapting by maintaining sensitivity to health concerns.” Others said they’re fearful about the future, concerned about how they might be able to adapt to new regulations and social distancing.

You’ll notice the optimists link prosperity with an ability to adapt their businesses to the changing situation. That can be easier said than done, so let’s look at the “how” for a moment.

How to adapt: Find an anchor

Chances are that you have an emotional attachment to your business and its well-being. So, making changes to it could have a strong emotional component. It’s important you don’t underestimate that.

Before you make a move, review your mission statement , or the vision and goals you had when you started the business. Then, look at how you’re fulfilling that mission.

You might do this by looking at formal business documents, like your value proposition, or by thinking more generally about how you’re able to serve your customers. Use your original goal and objectives to serve as an anchor as you consider potential changes.

Then, think through how your customers have changed as a result of COVID-19. Ask yourself: Does my value proposition still make sense? If not, some aspects of your business may need to change. As you make changes, it can be helpful to see if these changes align with why you started the business (or your mission statement). Doing so can ensure that any changes you make now still make sense in 2021 and beyond.

If you notice your mission statement doesn’t hold true anymore, you may find yourself making more fundamental changes and moving more toward a reinvention.

Decide what to change

Many businesses are making much smaller changes during COVID-19. In fact, small business owners told Wells Fargo that most of the changes they’ve made have been operational — attempts to keep customers and workers safer as the crisis progresses and changes.

Some moved employees to remote work environments and implemented virtual client meetings. Others moved sales online or changed to delivery, pickup, or online services. Some began sourcing materials from local suppliers due to supply chain issues.

Consider a furniture designer who sells wholesale to stores. She had built a growing business, grounded by the core value of making well-made, well-designed furniture accessible to everyone. But as the effects of COVID-19 amplified, sales slowed at the stores she sells to. Less foot traffic and financial concerns mean more people are buying discount furniture online.

Meanwhile, the cost of wood is fluctuating significantly. The designer may have to raise prices and could face shrinking margins. Since the designer sells wholesale to stores, she’s concerned about the ongoing limitations around foot traffic.

So how can the designer stay true to her anchor — the idea of making well-made, well-designed furniture accessible to everyone — under these conditions?

Implement those changes

She might move away from the wholesale market and decide to sell direct to consumers. Next, she might look at how people are spending their time during the crisis and see social media as a big potential market and begin marketing her products on Instagram and Pinterest.

This is just one example, intended to provide inspiration, and it may not work across all industries. If you need ideas or inspiration, it’s a good idea to seek concrete advice or learn from what your competitors are doing.

For example, a hair stylist might notice that a number of salons are no longer offering shampoo services. Based on this, she may decide to do the same. By doing so, she doesn’t have to coordinate safety measures for the washing process and can use any time she saves to help sanitize between patients. This may allow her to keep volume closer to her pre-COVID levels.

True, some customers may miss the service. But the stylist could send an email to her clients asking them to come in with wet, clean hair, and explaining the rationale for the change. She can also outline her plan for bringing the service back as things return to “normal.”

 

Pivoting? Keep values in mind

66%

of small business owners started their businesses to build something of their own

77%

of consumers feel better about brands trying to make a difference during COVID-19

51%

of small business owners think it will take 6 months or more to recover

66%

of consumers favor purpose-driven companies

Sources: Cox BusinessU.S CensusCone CommunicationsTwitter

Rally the people and resources you need

If you’re trying to figure out how to adapt your business, start by thinking about where you’re running into problems. See if you can narrow down your questions or pain points, which can help you find the right people to ask for advice.

For instance, many business owners told Wells Fargo they’re interested in maximizing their forgiveness options for Paycheck Protection Program (PPP) funds. Finding a resource, like the Paycheck Protection Program Loan Forgiveness Center can help with this, and tracking your cash flow ahead of time may help you take advantage of those resources.

There are a number of other resources that offer owners guidance, both on adapting their businesses and funding them. Consider U.S. Small Business Development Centers and SCORE for counseling, mentoring, research, and resources for small businesses.

Community and regional business organizations can also help — they’re a great place to connect with other regional businesses, who can provide advice and support. For example, Indy Black Owned is a group founded by a small business owner that serves as a resource for Black-owned businesses in Indianapolis and the consumers looking to patronize them.

Trade and industry groups are also a good option. They may have online groups or forums with advice for how to adapt during COVID-19, including strategies for how to handle the ups and downs of reopening. If your industry has experienced changing safety standards, these groups can also help you stay up to date on changing regulation.

Change is worth it

While 2020 has certainly had its share of challenges, it has also uncovered the tenacity and creativity that small businesses are known for. While it’s tempting to work toward a “new normal,” it’s also important to realize we don’t know when it will arrive or what it will look like.

That’s one reason it’s so important to adapt your business in a way that’s sustainable and fits your original goal for your business. In fact, tapping into the passion that inspired you to start your business could provide you with the inspiration to not only adapt, but also rebuild and grow into the future.

Sources: Forest Data NetworkMarketWatchIndy Black Owned

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