While the COVID-19 pandemic threatens to shutter as many as one in three businesses in Alberta, local consultants insist all hope is not lost for small business owners who learn to leverage their community connections in new ways online.
In an online webinar Thursday, Doug Griffiths, president of 13 Ways Inc. and former cabinet minister and four-term Member of the Legislative Assembly of Alberta, and Heather Thomson, a business consultant and Executive Director of the University of Alberta’s School of Retail, said business owners able to maintain connections to their customers in creative ways will be better prepared to bounce back.
These answers have been edited for brevity and clarity.
When can we expect things to return to business as usual?
Doug Griffiths (DG): Things are not going to go back to normal. They’re not going to just return to the way they were - the world is going to change permanently.
How do you think the COVID-19 pandemic will change the way small businesses operate?
DG: This pandemic is not changing the world like other events have, it is accelerating the change that was already inevitable. Having a more online-world presence, the nature of doing business online, but also the awareness that the community is critically important to our health and well-being. The new generations coming up have a bigger appreciation of community than many generations before it.
How will this crisis change customers’ habits?
Heather Thomson (HT): This has forced everybody to become very comfortable with purchasing things online. It’s going to be really important to look at your business and say, ‘I can’t change that it’s accelerating, so I have two choices: I can either wait this out and hopefully I can survive it if I have enough cashflow, or I can do things right now that are a lot of work.' If people don’t like those choices, then unfortunately you may not survive it and I would guess that you probably wouldn’t have survived the next couple of years anyway.
How can small businesses survive?
HT: Because things are changing and this is unprecedented, we have to utilize resources that we never thought we would have to use to keep us alive. When we look at what’s happening, the black and the white and the science of small business survival right now, it really comes down to how much you have stocked away. That is going to be a huge determining factor for survival for small business. I know it is scary and working with government is going to be key to success. The good news is, when we do come out of this, we are going to come out of this very strong. The rebound is going to be something that we’ve never seen before.
What challenges will small businesses face in trying to bounce back once the pandemic has passed?
DG: One of the biggest challenges that economists were talking about for the economy bouncing back, any economy in the world, is that when people get laid off and let go — which is a reality in something like this — it just amplifies the challenge for rebounding in your economy. We’re in Canada, so the Canadian program to cover 75 per cent of the salaries of employees to try to keep them on is probably one of the best initiatives to help the economy bounce back as quickly as possible and businesses bounce back as quickly as possible.
On Thursday, Prime Minister Justin Trudeau announced the federal government would be expanding their loan program for small businesses and is developing a plan that would help qualifying businesses cover their rent. Do you think these programs will get help where it’s needed?
DG: It’s an interesting program that will help those businesses that have a physical locations. One of the challenges with the program, and I think they’ll continue to review it again, is that a lot of the economy especially for young entrepreneurs is a gig economy. Everyone is a contractor, so there aren’t employee salaries and they pay themselves in dividends. I still think that program is leaving a lot of small businesses owners in the lurch.
How can small brick-and-mortar businesses adapt?
HT: A lot of the success for businesses right now is going to be communicating with your community. There is so much sharing digitally that we have never seen before, so take advantage of that. Statistics actually show that if you do have both a physical brick-and-mortar and an online platform, you do approximately about an extra 20 per cent of sales. It’s important to think about the future and whether you do have a platform that’s online, now is the time to invest and get that set up.
Why should a local business owner invest in an online presence if their customers are community based?
DG: As more and more people look online for sales, for services, for business, it makes it that much more paramount that local businesses have a local online presence so that they can be found. Chambers of commerce, local businesses are going to need to almost create a second layer. They are present in the community but they need to be present in the local online community too so they can be found and communicate what services they have to offer. It’s not necessarily to sell your product to the other side of the country, it’s to sell it locally but be found when people are looking online.
What if yours is a service-based industry, where you don’t sell a physical product?
HT: If you can’t sell something, you can still be very present in your community so that when this is over, you are right there. If you don’t have a product to sell, I would still recommend having a platform that’s online to just connect. There are different ways specific to your industry to be creative, and it may not look like a lot of money transactions are happening right now, but it will set you up for a platform for when this over and restrictions start to ease up. You will be ready to go ahead of your competition if you do the work.
As big box stores and huge online retailers take an even bigger market share during this pandemic, how can a small business compete?
DG: It’s funny to think that you can’t compete against the big box stores when it’s the big box stores that can’t compete against the specialists that are offering not just a product, but a culture and a style and a way of life and a feeling that goes with it. That’s what the next generations are really buying into.
HT: People are looking for ways to shop local and you don’t want to squander this opportunity. The spotlight on shopping local has never really been as intense as it is right now, so small businesses should really be using this opportunity to look at the platforms that are being built quickly in their local communities to capitalize.
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