To Do Business or Not? What the Virus Has Taught Us So Far
The virus has quickly turned the world upside-down, changed our social habits, work routines and specially the way we do business. Some of the most significant key learning areas we should be paying attention to are:
The virus has quickly turned the world upside-down, changed our social habits, work routines and specially the way we do business.
Some of the most significant key learning areas we should be paying attention to are:
- Consuming habits: people have changed and redefined their needs and what they consume.
- Changes in industries: tourism and entertainment have been the most affected, they have difficulty finding alternatives due to social distancing policies.
- Volatility of markets: early indicators show different behaviors as the virus develops, so what could look like a bad idea today could be a breakthrough tomorrow, and vice versa!
- Look East: Asian countries are up and running, we could learn from their mistakes and good practices.
- Technology: everybody is talking now about how we need to technologize our endeavors, which is fine, but this is still expensive and not everyone has the resources, so why not think about alternatives?
- Areas of opportunity: with every challenge comes opportunity. If your business was impacted by the pandemic, you need to find ways to overcome the flaws.
We could go on, but you get the idea: it is time to get out of the comfort zone and look at how to innovate!
Is it still too early and risky to take the leap?
Well, that depends. I just mentioned that we could look to those who are ahead in the pandemic curve and learn from them, and guess what, someone already did the job for us!
According to Nielsen, key consumer behavior thresholds have already been identified as the coronavirus outbreak evolves:
- The proactive health-minded buying consumer: minimal amount of cases increase interest in products that support overall maintenance of health and wellness.
- The reactive health management: health safety campaigns make people prioritize products essential to virus containment, health, and safety.
- Pantry preparation: quarantines begin, borders close causing a spike in store visits and pantry stockpiling of groceries and health-safety products.
- Quarantined living: higher restrictions on gatherings and public places lead to an increase of online shopping, a decline in store visits, rising out-of-stocks and strains on supply chains.
- Restricted living: complete lockdown makes online fulfillment limited; prices become unstable as stock availability is hit.
- Living a “new normal”: as life slowly returns to normal, people exhibit cautiousness about health, permanent shifts in supply chain as well as a steady practice of e-commerce now seem to be part of new behaviors.
During April, Costa Rica alternated between levels 3 and 4, while completely skipping level 5. It seems to be entering the 6th and last phase which will include stable market growth.
As previously stated, whether we stay in this “Living a New Normal” phase will depend on how people respond and adapt to the new cycle to come: the second wave of the pandemic.
Learn and adapt to what will come next.
So, you should not be questioning whether to make the leap, but when?
The pandemic has motivated us to adapt and survive, but it has also represented for a certain sector of the population reduction in income, investment, even total lockdown of production factors.
According to the Chamber of Commerce, sectors will be slowly transitioning to normalcy per the following chart:
We cannot prepare a walkthrough for each business, but we certainly can help you prioritize with a guide:
- Location: where is your business located (needs in SJ are not the same as in Jacó or Nosara).
- Business type: understanding where you are standing is key to plan for next steps.
- Employees: how many do I have and how can they add to this.
- Issue: understanding the problem will help you brainstorm.
- Inspiration: be prepared for what is to come. Tickets, joint ventures, free rides, discounts, packages, free meals, coupons, credits, frequent client specials, kits, alliances, trading, campaigns, everything you can offer now that is designed to be exchanged in a near future is valid to keep going.
- Strengths: do not sell a product or service, know your strong points and sell them for what they are.
- Investigate: know your market. Act quickly and anticipate your competitors. Only those who take advantage will survive.
- Marketing: according to the Central American Institute of Business Administration, users are currently spending almost 7 hours each day on the internet, 2.5 hours on social media, and 3 hours watching television.
Those who best manage to adapt to these new forms of making business, markets and interrelationships between human beings will certainly make their businesses and brands move forward.
- If you already have a business:
Keep in mind that the recovery curve for each sector is very varied. For example, the tourism sector including international tourist travel could be projected for November – December 2020. Rentals need to offer benefits and fresh ideas on how to attract guests in advance. Commercial sectors such as restaurants and leisure could experience profits between August and September 2020 (maybe before if we continue with the steady curves). The basic food sector will experience slight stability due to the need for access by the world’s population.
- If you are thinking about taking advantage of the competitive advantages, invest in:
- Food processing
- Personal care.
- Information and communication technologies.
- Electronic commerce.
- Hemp (just announced by the government and with profitable, proven results in the USA: https://americancannabisconsulting.com/how-profitable-is-the-average-cannabis-dispensary/)
- Oil and gas (well, maybe we went too far with the investment level on this one).
* Note we are leaving aside all technologies and remote work as you can find plenty of information about this out there, which will not really make it a competitive advantage if everybody else is doing it right?
If you are struggling or have an idea and looking to develop it, touch base with us now, we will help you take it beyond!
María José González collaborated with this story.