Canadian business: Preparing for the new normal

For small and midsized business owners, it seems like déjà vu all over again.

After the pandemic hit in March 2020, business owners were forced to rethink and, in some cases, reinvent their service delivery model through e-commerce. With the coming and going of the second and third waves of the pandemic, businesses became more nimble in adapting to changing circumstances. Without a doubt, nimble was not a choice, but rather a means to survive.

Owners who in the past had focused their efforts on reaching new markets to increase sales were forced to change their focus to preserve cash flow to meet expenses, which in many cases did not abate as a result of the pandemic.

Fortunately for many, the Canadian government quickly rolled out a number of programs that provided Canadian businesses with much-needed financial assistance. While the extent and accessibility to the programs have faced criticism, the programs provided a lifeline to many businesses. Absent those programs, these same businesses would have faced short-term closure and in many cases, bankruptcy.

In addition, financial assistance programs were developed to provide laid-off employees with government assistance. For business owners, this minimized the pressure of them solely having to provide assistance to their employees.

Fast forward to today, and we appear to have entered the fourth and perhaps final wave of the pandemic, and have the possibility of a return to greater normalcy.

While no one expected the government’s financial support programs to continue indefinitely, the reality that the programs have come to an end has caused much angst in the business community. The result is that business owners will again have to pivot.

While exiting the pandemic means that capacity restrictions are being lessened or removed altogether, businesses are now facing a new host of issues, not the least of which is finding employees to help them ramp up. Many of the people who would have applied for those positions prior to the pandemic have either used the past 18 months to increase their skill set or are quite content to live off the government payments they received.

Here are some way business owners can navigate their latest “new normal”:

• Consider different ways to incentivize employees: While immersed in the challenge of hiring new employees, keep in mind that your existing employees could very well be recruited by others facing the same hiring challenges. Consider ways to retain and provide your existing employees with incentives for growth or financial rewards in order to demonstrate your loyalty to them. After all, it is less costly and disruptive to keep your existing workforce than to hire new staff, assuming you can even find them.
• Be mindful of other government support programs: Over the past number of months, the focus has been on the government’s emergency support programs. As those emergency programs come to an end, it is worth looking into the numerous other government programs (both federal and provincial) and government grants that are in place to support businesses to see if any apply.
• Project your results under different scenarios: Think ahead. It is important to consider different scenarios that may occur over the next three to six months. For example, your operations will be completely different if you can’t find enough employees to meet forecasted capacity. You should prepare financial projections, which do not have to be complex, to assess the bottom line under a variety of scenarios. Being proactive and making necessary adjustments often results in better outcomes than when being reactive.
• Communicate with your stakeholders: Ongoing communication with your stakeholders is critical, particularly those who are critical for your business to survive and thrive. For example, bankers have worked with many of their customers to support them through the pandemic. Maintaining the lines of communication and relationships that have been opened and improved upon over the past 18 months is equally important now as the effects of the pandemic start to wane. Your banker should be kept apprised of how you plan to exit the pandemic, including anticipated hurdles. Remember the one thing that bankers hate more than bad news is no news and being kept in the dark about your business.
• Be realistic: Having been on this pandemic rollercoaster ride that you did not sign up for, you cannot lose sight of the big picture, namely making sure your business is viable. If you have any doubts, now is the time to address them. If not, you could be faced with difficult decisions at a later date. It is much easier to face the issues now, rather than when you are pressured to do so.
• Consult with your professional advisors: Speak with your accountant and lawyer. They have other clients who may be facing similar problems as you. They may have addressed some of those challenges already or may have insights that you haven’t considered. It is important to have discussions with them on a regular basis, and not only at year-end or when a specific problem needs addressing. After all, they are part of your team. Don’t hesitate to use them.