What makes a business “pandemic proof”?
Aldrin Raphael Business Brokers (ARBB) have developed a new designation for businesses listed for sale: pandemic proof.
Because COVID-19 had destabilized so many small businesses, the designation helps potential new owners determine which are best equipped to weather the storm.
So, what makes a business “pandemic proof”? ARBB explained that a well-functioning online and marketing component are key. But most important is flexibility. Many rigid businesses have been broken by these extreme market forces. The best ones have been nimble enough to respond.
We caught up with ARBB to ask about the “pandemic proof” designation and what other businesses can learn from it.
What were the key criteria for determining which businesses were “pandemic-proof”?
Key was that the business maintained or increased revenues and their client base and did so profitably. Some reduced revenue but were able to manage costs efficiently and increased bottom line.
Obviously, we’re not out of the woods yet and many experts suggest the economic impacts of the pandemic could linger for years. Do you think you’ll have to adjust that criteria before all this is all over?
I don’t believe this is long-term, but I do think that this had a positive and lasting effect on the business community. Businesses have learned to operate leaner and efficiently while using remote and online tools to communicate, meet and transact. It’s saved time, money and contributed to the economy.
Was there anything that surprised you about the businesses that received your “pandemic-approved” designation? Or were they what you expected?
Some did initially, like home improvement and renovation companies. I expected consumers would be careful with their money, but I guess the government subsidies, grants, low-interest rates and spiralling real estate market all played a role. Other than that, the businesses that made the cut were mostly what we expected. (Note: The most resilient businesses appear to be in sectors like distribution, transport, retail, and construction.)
To what degree is the success of these businesses the product of market forces versus sound business practices?
Market forces did drive businesses that manufacture products like personal protective equipment, and other related trade like logistics, which did very well during the pandemic. My opinion is that sound and adaptive business practices, and the embrace of technology, was key to these businesses’ success, allowing them to scale up as required by the market.
What, in your opinion, are the key lessons other business owners (or prospective business owners) might learn from these pandemic-approved businesses
Be nimble and light-footed as an enterprise and embrace technology that enables remote working, communications and transactions.
Opinions expressed here by Contributors are their own.
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