According to the Federal Emergency Management Agency (FEMA), at least 40% of small businesses in the U.S. collapse permanently after a disaster, and even 25% of those that manage to reopen, fail within a year. The same trend has been evident during the COVID-19 pandemic, with more than 50% of small businesses in the U.S. closing, as reported by the U.S. Proceedings of the National Academy of Sciences (PNAS). These statistics indicate how prepared a small business should be in order to survive and grow from disasters such as fires, earthquakes, floods and even economic recessions from business interruptions.
Here are five business lessons that we have learned from the COVID-19 pandemic.
1. Remote Working is Feasible
Due to the movement restrictions and self-isolation guidelines during the pandemic, many American workers are now telecommuting. According to theHarvard Business School (HBS), about 16% of the people currently working from home intend to keep doing so, even after things return to normal. With some employees being even more productive when working away from the office, says the Society of Human Resource Management (SHRM), your business should consider embracing telecommuting as a viable and economical option.
2. A Disaster Can Strike at Any Time
Data from Statista indicates that at least 90 natural disasters such as thunderstorms, wildfires, and floods occur annually, causing massive property damage. Your business is equally at risk of such disasters, meaning you should purchase the right business interruption insurance coverage in order to help your business bounce back after a disaster.
3. You Should Always Have a Functional Online Shop
Since the rate of online shopping has increased during the pandemic, most Americans are more likely to continue shopping this way, even after the pandemic subsides. This means that you should have a reliable online presence where you can source additional customers. To achieve this, you should build a user-friendly website and make regular updates depending on customer feedback. This way, you will have an online market that can keep your business going during a disaster and complement your sales in normal times.
4. Cyber Security is Mandatory
A typical cyberattack can cost a small U.S.business up to $32,000, according to the Council of Economic Advisers at the White House. Due to the prevalence of remote workers, cases of cyberattacks have increased during the pandemic. It is critical to protect your business network system to prevent loss of money and information. Some of the strategies you can use to enhance your cybersecurity include:
• Installing a firewall
• Updating software regularly
• Training your employees
• Purchasing enough cyber insurance
5. Loyal Customers are Crucial
Since acquiring new customers during a pandemic can be a challenging pursuit, you should always strive to boost your long-term customer base through active loyalty programs. This way, your business will have loyal customers to help support your business in case disaster strikes. Additionally, you will be able to save the costs of regaining customers, enabling you to stay in business when the market forces don’t work in your favor. Therefore, you should reward long-term customers for maintaining their commitment to your business, especially during a crisis.
At Economic Development Collaborative, we understand that it is a challenging time for all. Click here to access our continuously updated COVID-19 Business Resources Website Page and call 805.409.9159 to learn how we can help you take the next steps for your company.