How Multi-Unit Businesses Can Position Themselves to Thrive Through the COVID-19 Pandemic
July 16, 2020
For most business leaders, the COVID-19 pandemic has been a winding road to navigate, to say the least. After successfully “flattening the curve,” new cases are back on the rise in many areas of the U.S. Some business sectors are shutting back down and the uncertainty of the virus remains.
The one thing we know for sure is that the resulting economic and industry shifts caused by the coronavirus will be around for some time. Restaurant chains, cleaning services, hair salons, fitness studios, and other services businesses that are well-capitalized and have sufficient flexibility in their balance sheets have a massive opportunity to thrive while operating through this pandemic and beyond.
The operating landscape for multi-unit businesses has already changed in response to the pandemic. Companies have adjusted their physical storefronts, employee policies, and customer interactions to keep people safe. For example, yoga studios invested in social media and video production to keep customers engaged. Hair and nail salons started preparing beauty kits for customers to take home. Farms and food supply businesses pivoted to home delivery models to keep their revenue streams.
For many multi-unit businesses, there’s an opportunity to do even more. But first, CEOs and business owners must assess their balance sheets and ask themselves critical questions. Do I have enough liquidity to survive this current crisis and potential additional shutdowns if the virus flares up again in my area? Is my business well-capitalized? Does it have financial flexibility?
If the answer to these questions is yes, these businesses face a real opportunity to act now and create a competitive advantage by investing in growth initiatives that will allow them to emerge stronger than ever before.
Invest in technology to increase safety while staying virtually connected
New technology can help keep employees and patrons safe and also lead to greater customer loyalty and revenue growth. Modern contactless payment technology allows customers to browse items, make purchases, and pay before ever walking into a building. Not only does this smooth the transaction process for the customer, but it also provides the business with valuable data on customer buying preferences and creates opportunities to follow up with tailored advertisements and communications after the sale. Combined with customer loyalty programs, this close brand/customer connection can lead to more frequent transactions and drive top-line growth.
Enhance physical operations and on-site customer experience
Multi-unit business owners can take this opportunity to rethink aspects of their operations to enhance customer safety and buying experience. For example, businesses can optimize the ergonomics of their storefronts by designating entry points for curbside pickup versus walk-in customers to minimize customer interaction. Geo-technology can inform customers of the status of their delivery while helping business managers track inventory and make adjustments to ensure each customer receives their items on time. Solutions like these provide customers with clarity and comfort when interacting with the business.
Explore physical expansion as real estate becomes available
For growth-minded CEOs considering new unit development, the post-pandemic environment will create opportunities to accelerate expansion. Over the last ten years, market dynamics have been largely favorable for landlords with no shortage of new concepts competing for limited commercial real estate space. But with anticipated unit closures and a reduction of operators, buyers will not only have the advantage of more favorable lease terms, but brands will have new opportunities to enter into second-generation locations with lower development costs. This environment presents a unique opportunity for companies to expand and entrench themselves in the areas they have identified for growth.
Evaluate data for business model improvements
Customer preferences are changing amid the pandemic. And now that businesses can capture data on how customers are buying products and services, they can also reassess their offerings. Data analytics can provide information on which products are performing well and which are not. Based on this data, decision-makers can make adjustments to better meet changing customer preferences and demands. This data can also provide insights into how customers are making purchases. If online ordering and curbside pickup are the most popular ways customers wish to make purchases, dedicate more resources to facilitating these types of transactions. With more information than ever before, multi-unit business CEOs are empowered to make small tweaks to their offering that can lead to big jumps in revenue and profit.
Taking on growth capital to strengthen the balance sheet
Companies seeking to thrive while operating through the pandemic and beyond should start now by looking at their balance sheets. Before making investments in any of the above solutions, business leaders must ensure that they have ample liquidity. This may require some level of outside funding to accomplish. A cash infusion can provide companies with the capital needed to strengthen their balance sheets ahead of making investments in technology, safety precautions, new locations, and other initiatives that will set the business on a path for rapid growth during and emerging from the pandemic.