Hardening your business for a Pandemic

I wrote recently about hardening your business. That post was to help make Small Businesses more resilient in the face of economic risk caused by any manner of events. This post will be a more specific, a more uncomfortable conversation, but one we need to have due to the Coronavirus risk.

Obviously the health of people is the highest priority in a pandemic but there is also the secondary aspects which greatly affect this primary concern. One of those is sustaining your small business. This is what I want to address today.

There are 5 key areas I will cover. There are many more but it would take an entire book to do this topic justice.

The presumption I will make is that the virus gets to Australia and begins to spread and even if it doesn’t (which is unlikely in my opinion) then it will have some economic impact on our main trading partners and the retail sector. So some impact is unavoidable at this point. Typical human behavioural reactions will occur as a result. How does your business adjust as each severity level unfolds.

Sales and Marketing

Low touch sales such as ecommerce will have an obvious advantage over in-person retail sales. The online versus bricks and mortar trend will be further exacerbated if the pain isn’t already enough for the bricks retail sector. Non-essential goods in the bricks sector will be most at risk.

There will unequivocally be a huge decline in high street and mall shopping behaviour in favour of online buying. You have already seen this in specific areas like Eastwood in Sydney which recently looked like a ghost town relative to its usual hum.

What can you do about these problems?

  • Bring forward your sales, clearing stock, which creates cashflow.
  • Build an ecommerce site. It can be done in a matter of a few days if you use an off the shelf system like
  • Find reseller platforms if you have a unique product or even a commoditised product that you have a buying cost advantage in.
  • Offer something that is categorised as “essential” or “needed” in a demand sense, as opposed to “wants”. Focus promoting those in sales marketing activities. You can see Bunnings do this by offering stock at store front such as umbrellas on rainy days and tarps after a storm.
  • Let your customers know that you may go through an office/shop closure period. This will trigger sales as they may bring forward purchasing needs.


It’s hard to hedge against falling sales. These events take it out of your control, even if you up the marketing budget. So in these situations it’s often smarter to work on things you do have some control over. Worry about the things you can do something about and not the things that you can’t.

  • Encourage use of long service leave and holidays to use up these accrued liabilities. This can dramatically improve your Balance Sheet.
  • Consider closure for a new fit out if you are in a retail shopfront situation and your builder is fine with that. They may need to close in the site anyway so infection risk may be reduced (seek advice on that – it’s not my area of expertise).
  • Look at what contracted work or services you can postpone or finish up.
  • Some micro and small businesses are a side gig to your main employment. If they are high touch you could take a break for a few months until the dust settles.
  • Avoid entering new term contracts if economic times are uncertain, unless you have good break/exit clauses.
  • Drive a hard bargain. Plenty of Australian Small business had food orders cancelled on them (at the last minute) when Chinese new year festivities were cancelled. Mostly people are in business for themselves, lets not pretend otherwise. So you should drive a hard bargain if your contracts and relationships allow for it, if that’s their modus operandi. I’d be careful to consider it on a case by case basis though. Some business people are old fashioned. I personally am. I tend to support those that support me. Loyalty, favours, respect and trust are earned in business. They are sometimes over valued though so be very careful. Remember that karma is a bitch.


Some business models can be wound back freeing up time for a period to work on your business rather than in it. This also allows you to work on improving your personal financial position.

  • Work on your business and personal budget to change it to a ‘hard times’ version.
  • What frugality can you bring to the business? What expense switching can you do? e.g. $10 promo T-shirts instead of $20 bottles of wine as gifts. What suppliers can you renegotiate?
  • FX currency rates will move at times like this. Supplier location affects your prices. For example Australian importers have seen a ~5% shift in the Aussie Dollar versus the Chinese Yuan. So look at what you can do in this area. For some businesses it’s even possible to change what currency you pay suppliers in or that you receive sales revenue in. Seek financial advice as any move you make here is in essence akin to making a currency trade (or hedge). 
  • Get ahead on the mortgage by selling some assets, delaying purchases and instead putting that money in as an advanced mortgage payment that you have up your sleeve.
  • Stockpile goods on special or buy in bulk. It’s a bill you wont have in the future and it will save you having to go out and risk infection as that risk increases.
  • Look at DIY alternatives for things you pay for. Can you mow your own lawn? Do you really need someone to walk your dog? Can you workout at home? Non essential services can be put on hold. If you are in businesses like these, non-essential services, consider offering a special deal to allow customers to lock in for a period of time.

Social norms

It’s hard not to shake a customers hand when presented to you. However that activity becomes risky. Humans have a tendancy to not operate statistically but instead emotionally in situations of danger. You know, the flight, fight, freeze drill. What is common is to see people massively increase their risk in adhering to social norms. A common example is swerving to avoid a bird or animal on a road.

Some behaviours such as getting up and moving table at a coffee shop when the person next to you is obviously sick is a classic example. Most people won’t move because they don’t want to be impolite.

Asking someone to go home from work or school that might be sick are hard to do with a politeness filter in place designed for less dangerous times or managers who mistakenly think sending someone home sick is dropping their productivity. It’s very hard not to conform to these social norms.

  • Let your customers know disruption through closure is possible.
  • Let your staff know that this is super serious. The risk is 10x to 20x that of serious influenza that kill about 0.2% of infected persons each year. Even sneezy or a sniffly person shouldn’t be at work even if they think it’s just a cold. They don’t get to determine what it is, science does that.
  • Drop physical meetings for digital ones and obviously avoid air travel by delaying business trips.
  • Reduce staff exposure by finding ways to allow them to work from home. Help them avoid public transport and people. Get systems in place, adequate work at home needs, internet etc.
  • Obviously cloud and web outperforms local software and physical approaches in this situation. That flips if it becomes catastrophic and the old methods then become valuable again. That said, at that point it, it would be more like an episode of The Walking Dead. So we would have much bigger problems, like food logistics. This one won’t get that bad. It may effect 1-5% of the population so it won’t be an Armageddon.

Warping time

Let’s go over some of these useful time distorting concepts that help shift your cashflow or business away from peak risk periods during the virus lifecycle.

  • Deceleration – adding capital to a business is acceleration, increasing marketing and sales activity that have long term payoffs. You can actively chose to preserve capital and thus deccelarate the business during a period when payoffs aren’t available.
  • Low velocity – You may be able to slow down sales by raising your prices. This helps you hold onto what stock you do have. You will get your money later but your margin might be higher because raising prices is the common way to create this effect. This also applies if you source your products you sell from hotspots such as China. They will have supply chain issues for many months or more than a year. Don’t use price hikes to be greedy. That’s how you destroy your brand. You may win short term but over the long term you’ll lose.
  • Hibernation – Some activities can go to sleep for a while, be shelved and reconstituted later.
  • Portfolio adjusting – you may have several lines of product or services that you offer. You could intensify ones less affected by pandemic effects and reduce others impacted more heavily. Equally you could do the same with marketing activities. Flyers handed out at stations or popup promo shops in malls might not be good move so transition that spend into online ads, emailing, SEO and other digital activities might be replacements of time and resources. A new website takes a lot of time investment from business owners. 
  • Old school – When was the last time you received Direct Mail? It’s quiet on that front in my opinion and that’s an opportunity in a situation where human to human contact is risky. If digital marketing is crowded then direct marketing might be a good choice. The view/scan rate on direct marketing can be 30-60%. Once read, convert to sale rates are much higher than web conversion rates. Be aware of your context though. Online ads convert better to online sales than pamphlets do to online sales.
  • Expediency – There are clear early mover advantages in acting quickly. There a force multiplier effects in any risk situation. You can use time to your advantage. If you manage to get several initiatives above in place in parallel. They will have a compounding effect on each other.

I hope the above 5 areas help give you some ideas. Creativity and action are the key ingredients of making your luck. That’s the most important think to remember. Or just as good is Tony Robbins concept that resourcefulness is the key not resources. Work around the problem rather than become its victim.

Image thanks to Alora Griffiths (I love the t-shirt’s words of commitment)

Categories: Strategy

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