The coronavirus crisis has hit everyone hard. Families, businesses, and governments around the world are all struggling to deal with the crisis and its many ramifications.
And there’s no doubt that individuals and institutions have taken multiple hits, which will have a ripple effect. Added to all this there’s the uncertainty about the future. What will it look like, and how will we get there?
As a business owner, should you have been prepared for this crisis? The last time that a global pandemic on this scale happened, it was the Spanish Flu in 1918, over a hundred years ago.
No country, let alone any single business, has been prepared to handle this crisis. However, there have been enough events in recent times that should have acted as warnings for businesses and alerted them to be prepared to handle extreme stresses, whatever form they may take.
Every crisis is different, but there are some important things that all businesses should have learnt from the 2008 stock market crash and the severe economic dislocation that followed.
What we should have learned from 2008
The crash of 2008 has many important lessons for businesses today, and it’s not too late to learn. The lockdowns imposed across the country in fact offer an opportunity to reflect on these lessons.
Some of these are: having the ability to weather stresses and downturns, looking out for your employees to improve the chances and quality of the recovery, using the power of technology to innovate and survive, and to create new opportunities.
And for those feeling utterly overwhelmed by the scale of the crisis, there’s one more important lesson: don’t give up hope. We survived the 2008 crisis and we will survive this one. The real challenge is to shape the recovery in such a form that we will be prepared for the future.
The unthinkable can happen
In a relatively short period of time, we’ve witnessed some epic disasters which could be called Black Swan events, that no one could have predicted. These would include the 911 attacks, Hurricane Katrina and other destructive storms, the stock market crash and housing crisis of 2008, and the Great Recession. There have been periodic outbreaks of deadly diseases like SARS, Ebola and the H1N1 flu around the world.
But is it actually true that these could not have been predicted? And if we missed the signs in the past, what can we learn from them now? If these events have taught us anything, it is to be prepared for disasters on an unimaginable scale.
And this preparation will have to happen on many different fronts, including the economy, healthcare, supply chains, work, education, communications, and technology.
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Misfortunes don’t come singly
The 2008 crisis began with the banks failing because of over-leveraged subprime mortgages. It was followed by the stock market crash which wiped out substantial chunks of wealth and decimated retirement funds.
But it didn’t end there. Job losses, foreclosures and the drying up of credit hit the economy across the board. Homelessness and suicide rates increased and good, high-paying jobs were slowly replaced with low-paying, low-skilled work.
The consequence, as we’re seeing today in the wake of the pandemic, was a cascading series of disasters, where each event led to a series of further problems. Because all sectors of the economy are linked, no one was safe from the consequences.
We live in one world
For better or worse, the world today is linked more closely than ever before through economic, social and political links. We can no longer assume that a crisis in another part of the world will not affect us, our economic arrangements and even our daily lives.
Which is why the best hope for a more secure future is to work towards greater international cooperation.
Too big to fail is a recipe for disaster
For individuals and businesses, it’s never a good idea to be overextended. And that old adage about saving for a rainy day could help many tide over at least a few months of bad times. While the federal government has tried to bail out different industries, this assistance can only be a drop in the bucket.
This does not mean that you should shelve your plans for future expansion indefinitely. However, you should grow your business from a strong financial footing. Secure financials are the basis for a strong business.
Be ready to pivot to new opportunities
Each major crisis moves us to a new normal. There is no going back to the way things were, and the road leads in only one direction: forward. This can be an opportunity for businesses to change their way of doing things and to seize new opportunities.
Production lines can be repurposed, new products added, government aid programs can be used to make changes that will improve revenues in the future, and new partnerships can help you become more productive. Plan for the future, knowing that there will be a future.
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A weak recovery is not much of a recovery
The recovery after the Great Recession of 2008 was a very lopsided one, and it left many people behind. Those with lower paying jobs with few savings and resources didn’t see much of an upturn, with wages remaining low and few opportunities. This meant that the economy and society as a whole were less well placed to deal with the new shock to the system delivered by the coronavirus crisis.
Going forward, this lesson needs to be taken on board by businesses as well as policy makers. In the pandemic, people in what are seen as some of the least skilled and lowest paying jobs have turned out to be the most essential workers, even as they are also the most exposed.
For businesses, treating workers as a resource instead of just an expense is crucial to maintaining a healthy and resilient workforce.
Investing in your workers through training, skills and leadership development and ensuring their health and well-being is an investment in the welfare of your business and its future success. It’s also crucial to building a more resilient economy and society.
Innovate to survive
Technology is not the wave of the future, it’s the present. And businesses should take advantage of the many possibilities it offers, from remote work to flexible pricing that can help customers who are also feeling the cash crunch.
Given that we could be a long time returning to normal shopping practices, this could be a good time to expand your retail operations online, and retrain your staff to provide them the necessary skills.
We will get through this
With multiple burdens of responsibility to your business, family, employees and others, it can be difficult to hold on to an optimistic outlook. But looking back at the 2008 recession, we see that recovery is possible. We will get through this, but the question is in what kind of shape. Will we be better prepared for the future and whatever it holds?
If you own or run a business in 2020, you are most likely going to see a downturn in business as we hit this next recession. You can try these things to help you increase your business.
Redesign your Logo: This is a quick way to attract some attention and possibly gain some new customers.Improve your logo by making it simple and creative.
Discount: You can discount your goods or service to get new business.
Online Presence: Increase your online visibility by redesigning your website and working on SEO.
Cut labor: You might have to lean up and get rid of some employees to build your business back up.
Hit the road: Get back to the basics and pass out flyers to people and businesses in your city.
Every crisis is different, but there are some important lessons to be learned from each one. The 2008 recession should have taught businesses to be resilient, to operate from a strong financial base, to treat workers as a resource and an investment, and to see innovation as the route to survival. It’s not too late to learn these and to put them into practice going forward into an uncertain future.