Is your Business to Big or Complex for its Current and predicted Demand?
If you are feeling the full weight of the lockdown closure and especially if you are thinking about taking up the Covid-19 Wage Subsidy Extension, now is the time to recalibrate your business to the new market conditions.
To quote Dave Grohl, “It’s easy for you to say.” And oddly enough it is, as I have been in similar positions with many businesses and had to make the hard calls. So, don’t be weighed down by your past, take off those concrete boots and get into the groove. Be Agile and move forward now!!
The academic business professors say lots of things, such as:
- “pursuing growth is the best method to survive”
- “straight survival strategies are a recipe for death”
- “staff on demand – get the best resources when you need them”
The reality is that a combination of what the academics say, experience, common sense and the ability to rapidly act to changing conditions (being Agile) is what will potentially save your business.
Before taking up the Covid-19 Wage Subsidy Extension ask yourself these questions:
- Are you only able to pay the staff the Wage Subsidy? YES
- Are you struggling to pay the staff’s on-costs? YES
- Do you have enough turnover to meet all of the business’s outgoings? NO
If your answers are the ones shown in blue, then you need to recalibrate your business to the size of your demand and that means letting staff go before taking up the Covid-19 Wage Subsidy Extension.
This will also be fairer to the staff as the Wage Subsidy is for only 8 weeks and they would be eligible for the Covid-19 Income Relief Payment which is for 12 weeks. The difference in cash to the employee is minimal i.e. Wage Subsidy $585-80 less tax = approximately $497 (based on an annual income level of $40,000) vs Income Relief of $490 net.
What if turnover picks-up?
Flexible staff – the use of casuals, part-timers and contract staff to cover for busier periods.
Is this unethical?
Air New Zealand and Fletcher Construction have let 2,500+ employees go. Both companies are expecting things to improve but not in the immediate future so why go bankrupt holding staff for 6 months before things do improve.
When it comes to growth, the main three areas where businesses should be looking the hardest are:
- Your current markets – analysing how badly have your customers been affected by this crisis and investigating new target markets that have been less affected by the crisis.
- Market segments – how badly have you market segments been affected? Is there potential to grow any of your less affected market segments or move into new market segments?
- Developing an Agile Digital Platform to support your evolving marketing strategies and plans.
Being Agile is about using your competitive edge / advantage over your competitors to ensure that you firstly retain and then potentially grow your market share by segment as other businesses adapt and compete for the same customers.
The smart Agile businesses will be moving from Survival to Taking Advantage while those wearing concrete boots will slide from Survival to gone.
Into the Blue NZ Limited in association with Business Support Studio Limited have put together a “Marketing and Digital Enablement” Service, which has been registered with the Regional Business Partner Network (RBPN) to enable 50% government co-funding up to a maximum of $5,000 for the first 3 months. For more information see “Marketing Analysis, Planning, Strategy and Digital Enablement” service. All services listed on this page are registered with the RBPN and available for government co-funding.