June 4, 2020
Since the onset of the COVID-19 pandemic, I have been tremendously impressed by the selflessness, compassion and just plain “heart” demonstrated by my fellow human beings. From brave healthcare workers and first responders; to the essential employees who produce our food, keep grocery stores and pharmacies running, or deliver our packages; to all the individuals who have adapted to working from home, while teaching their kids and keeping their families safe – so many people have truly gone above and beyond. My appreciation extends to our terrific OceanFirst team members, who continue to deliver exceptional customer service under unprecedented conditions.
Now, as we contemplate a phased-in return to economic activity, I am equally impressed by the drive, ingenuity and adaptability I’ve seen among my bank’s customers. I believe most companies today must view themselves as what I call “re-start-ups” – bringing fresh thinking to the vital task of keeping their businesses relevant in a world of changing economic realities and customer behavior patterns.
Here are a few stories from the front lines of the “re-start-up” economy:
- A hotel that is about to re-open will eliminate daily maid service to reduce the risk of exposure to COVID-19. Instead, housekeeping staff will thoroughly clean and sanitize rooms before and after each guest’s stay. Rooms will be equipped with extra towels so no one has to enter the room to change towels.
- A dental office has closed its waiting room to reduce person-to-person contact. Patients will wait in their cars in the parking lot, and will receive a text when it’s time to see the dentist – at which point they’ll be ushered into a sterilized dental surgery room.
- A local specialty grocer created a “home grown” solution for customers who don’t want to visit the store to shop. Instead of a formal online ordering system, customers just e-mail the store with their shopping lists, and the owners respond when they have the items ready for pickup or delivery.
What these examples show is that companies large and small, in a variety of industries, are applying innovative approaches to the challenges of operating successfully in an economy where extra safety measures are needed to instill customer confidence, established business models may no longer work, and prior revenue and expense projections are obsolete.
The Power of Partnership
While ingenuity is one solution to the problem of re-starting our economy, another vital ingredient is partnership. Businesses don’t operate in a vacuum; they are connected to ecosystems of suppliers, distributors, landlords and lenders (among others). All participants need to work together, for mutual benefit, to bring businesses back to life.
For example, a company owner may need to partner with their bank to obtain extra funds to invest in room dividers, personal protective equipment, specialized cleaning supplies, etc. The “partnership” might take the form of the bank providing additional credit, while extending the repayment period to lower monthly payments. The borrower gets much needed funds on affordable terms, while over time the bank gets a lower risk loan as the business can return to making loan payments. In this example, many business owners also will put up a portion of the investment out of their own pocket, to show more “skin in the game” when asking the bank for additional resources.
Similarly, a business might ask its landlord to temporarily lower the monthly rent, but agree to pay a percentage of future revenue growth. In another example, a restaurant could adjust its menus to take advantage of the ingredients that its suppliers can provide most cost-effectively. Considering the national surplus of chicken wings following the cancellation of March Madness, the restaurant owner might say, “I’ll change my menu to feature chicken wings, but I need you to give me some really sharp pricing or deferred payment terms.”
The point is not to ask one’s lenders, landlord or suppliers to “share the pain,” but instead to “share the potential” by partnering on creative solutions to business challenges. Working together provides the best chance for a recovery that will benefit us all.
Look to the Past, Present and Future
The final piece of advice for “re-start-up” businesses is to think about the past, present and future when making re-opening plans. From the past, consider what made your business successful in the first place, for example, which items sold the most volume, or what approach to service differentiated you from your competitors, and make that the core of your revived business. Looking to the present, ask yourself what products, services or delivery channels were most in demand during the COVID-19 lockdown, and whether they should have a place in your operations going forward. In this regard, it’s important to remember that customers have put a new – and very high – premium on safety since the onset of the Coronavirus. They need to feel safe when they do business on your premises, or they won’t come back. Curbside pickup may be part of the new normal for all retail businesses and restaurants. As for the future, try to determine where your greatest revenue and earnings opportunities will come from. Then, work in close partnership with the other participants in your ecosystem to make those opportunities a reality.