COVID-19 What Happens Next?
As I write this article mid-June, it appears my last article for the Flooring Magazine, anticipating business post-COVID-19, was perhaps a little pessimistic. At the time of writing, New Zealand is at Level One, having eliminated the virus, and Australia is close to reaching the same milestone. I admit to being pleasantly surprised after the mayhem reported out of Europe and the US.
Perhaps more surprising is the current buoyancy of the market. Of course, there are regional differences, but many retail clients are telling me they are struggling to keep up with store traffic, and commercial operators are seeing construction projects pick up from where they were pre-COVID. A retailer client that let staff go over the lockdown is now looking to rehire to keep up with demand.
“Was the pandemic and its effects merely an unpleasant but brief interruption that has now passed? Have things returned to normal?”
The current situation is somewhat reassuring to those of us who expected an immediate and dramatic downturn in the immediate aftermath of the pandemic, but what comes next? Was the pandemic and its effects merely an unpleasant but brief interruption that has now passed? Have things returned to normal?
Some commentators have observed that the weeks of spending so much time at home will drive investment in our homes, particularly given that other discretionary expenditure is off the table; overseas travel, for example, is an undesirable and impractical prospect in the current environment. A colleague of mine calls this the “nesting syndrome”; where we are inclined to spend money on our homes because we can’t afford or (in the case of COVID) are unable to travel. If house prices hold steady, and if unemployment is contained, this seems logical. If house prices start to slip and confidence is lost in employment, it would be a different matter.
I am not an economic commentator; certainly not one that anybody should listen to. I will say, however, that as welcome as the current market is, it is not necessarily the market we will enjoy for an extended period. The COVID-19 pandemic was a health and economic shock to the world, unlike anything anybody alive today has ever experienced. We don’t have a modern point of reference on which to make predictions as to how the economy will hold up. It is, at best, in question. As I understand the definition, we are in a recession now, and if that is the case, we will, at some stage, see a downturn in our businesses. That is, after all, what defines a recession. How deep and long the recession will be is for other, more qualified people to predict, but what I can suggest is we should take advantage of the opportunities that are currently presenting themselves.
“Some commentators have observed that the weeks of spending so much time at home will drive investment in homes, particularly given that other discretionary expenditure is off the table.”
Beyond making sales now, we should recognise that there is some uncertainty ahead. We must be working on our businesses, improving our processes, upskilling our staff, and doing more with less, so we will weather any downturn. A recession, or the prospect of one, is our prompt to make sure our business is in the best possible shape to continue to thrive, even in more difficult circumstances. As a successful businessperson once advised me, “Never waste a good recession”.
“Was the pandemic and its effects merely an unpleasant but brief interruption that has now passed? Have things returned to normal?”
Working on our business requires three things: time, data, and access to the right business tools.
Time is a precious commodity, and the temptation is to use it for short term outcomes. Right now, it will be to throw ourselves into making sales, and there is no question, this must be a high priority. We should, however, make time to work on our business. Time spent working in the business is good for this week and maybe this month, while time spent working on the business is good for next month and next year. It is amazing how even small improvements made now can have a long-lasting positive impact on our business.
“Time spent working in the business is good for this week and maybe this month, while time spent working on the business is good for next month and next year.”
If we are going to work on our business, we need access to data. Decisions made without the benefit of reliable, up to date information are gut decisions. There is a place for decisions made from the gut, but they are situations calling for expediency and usually have low stakes. The problem with decisions not supported by data is they are difficult to support, and if we can’t demonstrate, even to ourselves, the basis on which a decision was made, we will lose confidence and change course. Our gut might be right, but we will be doubly resolute if we can back it up with data.
“Our gut might be right, but we will be doubly resolute if we can back it up with data.”
Finally, we need the right tools; tools appropriate to our business. As recently as today, I met with a retailer who recognises his business is constrained because his business software is not designed for all the moving parts of a flooring business. Similarly, he recognises the need to move away from traditional quantifying methods and move to an electronic quantifying solution.
We should be thankful for the situation in which we find ourselves in this part of the world, but we must never be complacent. If we want to have a business that we will either sell at in the future, or pass on to family, we need to keep working on it, and arguably, now more than ever.
