In early March, we realized a seismic shift was hitting the business world like never before. In the wake of the pandemic, our clients’ tone changed from a rosy expansionary outlook to one of uncertainty and survival. By mid March, after two capital raising engagements cancelled, we came to the realization that traditional capital raising through angel and venture capital networks would be put on hold indefinitely. If we did not pivot our business strategy, Vistance would not survive this fallout.
We immediately jumped on the phone with our clients to learn that their needs were quickly changing:
- They needed a full understanding of all the government stimulus programs, eligibility criteria and the process to apply.
- Budgeting, cash flow forecasting and assistance with expense reduction became the highest priority.
- We needed to help businesses with layoffs, which included educating them on stimulus packages for individuals so companies could educated terminated employees on what programs were available for them, issue records of employment and help them through this very emotional process.
After realizing that this was the new economic reality, we pivoted our business to focus on survival strategies and preparation of materials to apply for emergency funding though government programs and banks. We changed our website, revised marketing materials and aggressively hit the media for exposure. Through increased blog activity and exposure in the Financial Post, we were able to connect with many small businesses struggling to survive. We provided countless hours of advice to these businesses on how to apply for the various programs including wage subsidies, loans through government entities, and helped them navigate communication with their banks. We were able to gain incredible insight into what was happening with the small business community at large and we used this information to become advocates fighting for government programs to be more inclusive of small businesses, rather than repeating the large corporation bailouts we saw in 2008.
During this process, I have become so proud of our fellow entrepreneurs that shifted strategies to adapt to the new climate in order to generate revenue. This pandemic has been a true test of our resiliency. Complacency would have destroyed us, but we refused to go down without a fight.
The pandemic has actually forced businesses to make necessary operational improvements that we believe make them leaner and stronger when they came out on the other side. We would like to share some of the insights we have gained working with them.
Cost Reduction
In mid March, many companies were forced to make extensive layoffs to reduce costs. Companies maintained their key employees that were given expanded roles and opportunities. Recently, business owners have informed me that they came to the realization that they were previously overstaffed and realized redundancies in workflow. They have figured out how to operate with less people more efficiently and will likely not hire everyone back even when business returns to normal.
Similar to their employees, business owners started looking very carefully at all their vendors, reviewing their return on their investment, whether they were receiving all the services they expected based on agreements and whether their pricing reflected current market rates. Many business owners found they were not receiving services within expectations and were able to reduce their fees or replace them with new vendors offering better service and pricing. We typically recommend all businesses complete a vendor review for return on investment and market pricing at least once a year.
Systems Implementation
An IT infrastructure project is easily the one project that always gets put off when business development is firing on all cylinders. However, this pandemic has forced companies to implement them in a hurry as their employees work from home. Managing tasks, projects, communication, cohesiveness, all become extremely challenging when employees are not sitting in the same room. Two employees may work on the same task, tasks may get completed with no notification delaying the completion of a project, and employees may choose work on lower priority projects. Business owners desperately needed to implement IT communication tools, which is something many had been meaning to do potentially for years, but kept putting off. With this existing infrastructure in place, it is likely employees will be offered work from home opportunities even in the post-COVID era, and companies will become much more efficient with project management.
Financials Clean Up
While we tend to take on clients that are typically looking for capital, we received new clients that had never thought about raising capital but needed funds urgently during this period. Most of these businesses have never felt the need to pay much attention to their accounting. As most funding programs require 2-3 years financial statements, they required our help to do a full clean up so they could qualify, and we also provided 12-18 months of financial projections. As we have gone through this process with our new clients, they have seen the value of having a budget and accurate financial statements. We have helped them permanently implement processes to prepare monthly financials, compare them against forecasts and make real-time adjustments to their business based on key metrics. We are confident that these businesses will be making much more informed and smarter business decisions moving forward.
Innovation
As I eluded to the necessity to pivot strategy in today’s climate, I am impressed with the level of innovation and how quickly entrepreneurs execute on new strategies. The ability to generate new ideas and implement them quickly is what sets small businesses apart from large corporations and what makes the small business community resilient.
Conclusion
There is no doubt the COVID pandemic has had a severe impact on businesses and many will permanently shut down with no opportunity to pivot. For those that make it through, COVID has actually provided businesses the opportunity to take a deep breath and implement long overdue processes that have constantly been shelved in favour of sales and marketing initiatives. These businesses will certainly come out stronger on the other side.