Prepare now so your business can grow after the pandemic ends.
Just weeks from now, 2021 arrives, and business leaders must be prepared for abrupt shifts in the needs of their customers. For example, if your business boomed during the pandemic, are you prepared for a post-pandemic slowdown?
Investor fear that Zoom might not be prepared for this has cost its shareholders. Since peaking at $588 a share in October, Zoom’s stock had lost 32 percent of its value by early December.
Why? I’d guess part of it is due to good news about Covid-19 vaccines from Pfizer, Moderna, and others and means that investors are betting the pandemic will end and people will go back to the office and not use Zoom as frequently.
Zoom’s stock fell on November 30 when the company announced a growth slowdown. More specifically, for the third quarter Zoom reported 367 percent revenue growth while forecasting still blistering 329 percent growth for the fourth quarter ending this month, according to CNBC. Between then and December 9, Zoom stock fell 17.7 percent.
The point? Regardless of how the pandemic has affected your business, its end is likely to change things. You should prepare now to change your business strategy to take advantage of the new forces that could propel company growth after the pandemic.
2021: A Sideways-W-Shaped Recovery
Bearing in mind the idea that the pandemic has been great for some industries, terrible for others, and a tossup for ones in the middle, I think 2021 will feature a sideways-W-shaped recovery.
You should be able to find your industry in one of the three prongs of the W below. For each one, I describe how things have been going for your industry this year, what is likely to change in 2021, and the questions you should be thinking about now.
1. Covid-19 winners like Zoom and Wayfair boomed in 2020. Can they keep growing?
The first prong of the W is companies like Zoom, Shopify, Wayfair, and others that have boomed during the pandemic — thanks to the surge in people working from home.
In 2021, these companies will need to decide how to adapt to a world in which the pandemic ends and people return to a mixture of how they lived in 2019 while continuing to practice some of the new habits they adopted during the pandemic.
Business leaders in this category ought to initiate close conversations with at least 100 users of their service. Discussion topics might include:
- Will you go back into the office when the pandemic ends?
- If so, how will you split your time between working from home and in the office?
- How will that change affect how you will use our product?
- What new services or modifications to existing ones will you need as your work-style changes?
On the basis of the responses, leaders should reimagine their business strategy, develop prototypes of new services customers demand, get feedback, and refine the services so they can launch them as the pandemic ends.
2. Covid-19 pivoters won by aiming their product at surging demand. Will they tack in the right direction?
The second prong of the W will be companies that adapted their strategies to take advantage of the increase in demand due to the pandemic. What comes to mind here is a company that provided ultraviolet lighting for diamond retailers that enjoyed a surge in demand when it changed its ultraviolet light to kill airborne viruses and bacteria.
As I wrote this August, Eden Park is a maker of ultraviolet lights designed to distinguish fake from real diamonds. Within weeks of the pandemic’s starting, Eden Park was able to retool and launch a product that used UV light to kill the novel coronavirus that causes Covid-19 in crowded spaces.
Eden Park shipped 1,000 prototypes within weeks of launching them, and, by August, the company had grown 10-fold and was making a profit. However, will such companies be able to sustain their growth when the pandemic ends?
My advice would be for their leaders to research their current customers to gain insight into how their needs are likely to evolve and revamp their strategies as the pandemic ends.
3. Covid-19 losers like airlines and movie theaters are barely surviving. Can they ramp up when demand surges?
The third prong of the W is companies that lost 90 percent of their business during the pandemic — such as airlines, cruise ship operators, restaurants, and movie theaters. While they cut back costs to survive during the pandemic, they will need to quickly add capacity and staff later in 2021 as the pandemic ends to meet what could be a surge of pent-up demand.
Once the pandemic is under control, such companies will hire back people and order supplies to handle those who return to these businesses. Make sure you’ve lined up the financing you’ll need to do that quickly.
The post 2021 Small-Business Economic Outlook appeared first on Inc. and is written by Peter Cohan
Original source: Inc.