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5 Ways to Revisit your Business Model During COVID-19

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The May 14 Connections LIVE webinar series featured a presentation from Business Link, which has been helping Alberta-based businesses grow for nearly 25 years. Business strategists Matt Hill, David Bayda and Mark Shields provided helpful tips to support businesses adapt their operations and find innovative ways to deliver their products and services as a result of COVID-19. Below are five key takeaways to help revisit your business model moving forward.

Watch the full webinar

Consider Timing Carefully

Different types of businesses are permitted to open under different phases of the Alberta government’s relaunch strategy. It’s important to remember that these dates are guidelines and may change and shift throughout the summer. Visit the Alberta Biz Connect website for current restrictions as well as sector-specific guidelines to safely re-open.

If your business is able to re-open, ask yourself if you can adapt your business operations to keep customers and employees safe. Businesses are not mandated to open under the relaunch strategy, and each business must decide what’s best for their situation. Talk to your staff, they work with customers daily, and they’ll have valuable insight into what’s possible and how changes will impact day-to-day operations.

Be Flexible and Communicate

Business owners have had to be adaptable during the COVID-19 pandemic, and this will need to continue after re-opening. The way your business operates its first week back may not be the way it can operate in week two, and so on. Customers and their behaviour are a major unknown for businesses right now, and you’ll need to be flexible and adapt your operations as you learn how customers interact with your new normal. Regardless, ensure you have a reliable source of personal protective equipment (PPE) for staff, and communicate clearly with your customers so they know what’s required of them when they enter your business.

Remember to consider what your plan of action will be if the COVID-19 situation regresses and restrictions are implemented again.

Evaluate Your Finances

Have a strong understanding of your present financial position before re-opening. This knowledge will allow you to make more informed decisions and a benchmark for your business, along with specific and realistic targets it needs to achieve. Follow these three steps to get started:

  1. Review your cost structure and identify essentials versus what could be eliminated.
  2. Identify how many sales channels your business has, variable and fixed expenses, any significant negative cash flow and any shortfalls. Diverse sales channels are key right now, and it’s important to have income being generated from a variety of sources.
  3. Calculate your profit margins. It’s best to work with an accountant to get more detailed data, but you can use a simple formula to get started. List your variable costs for each product/service, divide that by how many products/services you have, subtract from the product/service price and find the percentage of the price. Something that can be overlooked, but valuable when reviewing your business model, is the contribution each sale makes to your fixed costs.

Consider Societal Changes

COVID-19 has changed nearly every aspect of daily life, and with that comes a shift in spending habits and societal norms. People are spending less due to economic strain, supporting local or buying online rather than visiting stores. Consumers may also be less likely to go out as restrictions lift, depending on their level of comfort, and they’ll require more personal space when they do leave home.

The pandemic has also fundamentally changed how people interact with one another, due to physical distancing guidelines. Many people are embracing technology more than ever to stay connected to friends and family while distancing, as well as interact with businesses.

Moving forward, it’s important to remember that it takes up to three weeks for a new behaviour to become a habit. People have been adapting to COVID-19 regulations for more than two months; be aware of these new patterns and how your current business model will need to be adapted immediately, short-term and long-term.

Get Creative with Product / Service Delivery

With travel restrictions still in place, tourism business owners will need to be creative and find new ways to engage with customers and rethink their experiences. Take time to brainstorm new ways of operating and reflect on changes over the coming months and years. From this, determine innovative ways to create value and provide memorable experiences for customers, even if they’re unable to visit in-person. Consider ideas like virtual experiences or pre-selling experiences that visitors can use when travel opens again.

Don’t be afraid to reach out to trusted friends and colleagues as you modify your business model. These people often see your business from a more objective perspective and can offer valuable insight or see opportunities you may not.

For more Connections Live webinars, click here. Sign up for Travel Alberta’s Connections e-newsletter for industry news and resources.