If your business is still standing, you might be wondering about ways to remain profitable in this turbulent time. The COVID-19 pandemic has impacted nearly everyone on the planet in some way. One of the hardest-hit groups is South Africa’s small business owners, with many small businesses nationwide having to close permanently due to the pandemic.
Many businesses that have so far weathered the storm reopened to a changed, stagnant economy. The future is concerning. Regulations require customers to wear masks, high unemployment rates may limit people’s disposable income, and some businesses must operate at a lower capacity.
3 ways to be profitable during the COVID-19 pandemic
As this new world order sets in, it’s time for business owners to use innovative and creative solutions to not just stay afloat, but to be profitable throughout the pandemic. What are some ways to be profitable during the pandemic? Read on to find out.
Businesses of all sizes have been cutting costs to ensure they turn a profit through this pandemic. These savings can take on many forms, such as:
- Terminate any non-essential technology subscriptions
- Reduce raw material costs
- End any optional projects
- Insourcing work they used to outsource
Customer behaviour is more unpredictable than ever right now, which makes demand forecasting extremely difficult. Since you can’t rely on future projections, it’s best to act on what you can control now.
For instance, you could enact a plan to immediately reduce your budget by 10% each month through the duration of the pandemic. When you have a plan in place to reduce expenditures, you can more easily create contingency plans based on your actual revenue.
Plan for the new normal
In another way to be profitable, businesses will have to think critically about what the world looks like now.
The post-crisis recession will likely continue to motivate consumers to try more affordable or more available product options. Many new consumer behaviours have emerged, and not just more online shopping.
For instance, according to one consumer survey, half of online South Africans said that goods were out of stock during Level 4 Lockdown, with 32% stating that they had to purchase brands they would not usually buy. Around 44% of consumers said they would definitely reduce purchases to save money.
There are a number of ways to creatively take advantage of the coming changes:
- Offer your product for slightly below market value.
- Offer products in higher volume to reduce the amount of unsold inventory you have on hand.
- If you have more than one product, lean into some of the lesser-known ones to gauge the new market.
- Invest in specific growth opportunities, as many beauty companies have done with hygiene products.
- Set yourself up for digital marketing and even consider setting up an online shop—this will help you capitalise on the shift towards online that started under lockdown.
Tip: Fast track your digital journey with GoDaddy’s Websites + Marketing—an integrated digital platform for small businesses. GoDaddy makes it easy to set up a website for your business from your smartphone in around an hour. You can also use Websites + Marketing to manage search engine optimisation, post to social, and send marketing emails.
Partner with your community
As consumers are thinking about spending their money meaningfully and putting their rand back into their local economies, neighbourhood businesses have seen a boost during the pandemic.
This boost could help small businesses stay profitable well into the future. Whether you operate a brick-and-mortar store, an online retailer or you’re a consultant, now more than ever is a good time to connect with your community.
Promote your business through social media, offer discounts to local shoppers and other local businesses, and make sure people know that, when you do become profitable, you’re putting some of what you earn back into the community.
Related: Covid-19: Adapt to change and embrace a new way of working