Updated: Jul 26, 2022
I still remember the time when top B-schools used to teach the most versatile business models. The ones that would weigh the temperament of your idea as an entrepreneur based on how strongly does it pass the Stress-test and survive the economic conditions. We were taught to work in an industry that was safe from any sort of economic fluctuations. I still remember them calling it "Recession-proof" business. One which never runs out of clients. Where people would never go out of work. One that would keep the liquidity intact even in the worst economic conditions. One that would just stir against the flow and will keep people alive (literally).
Education, Healthcare, Culture, and Religions were some of the safest nooks to do business in. They said, "No matter how much money people lose, they would never stop sending their kids to school. They would never compromise with the medications. They would never stop visiting the temples and they would never let their cultural rituals get compromised!"
Well, all those were pretty true till 2020-21 happened! The Covid-19 happened!
Schools, Tuitions, Colleges and Education centers are bleeding. The most important rituals of marriage and death both are compromised. The industries surviving on the religious products are facing a wave of depression. However, the healthcare sector is still quite ingenious.
Now, the question is not if the business would survive the recession. The question is whether it would sustain in the pandemic? The Businesses don't just need a "Recession-Proof" business strategy. Rather it's the time for "Pandemic-Proof " or let's call it "Pandemic Friendly" Business Model.
There are 5 major ways of growing your business in tough times:
1. Trust on Branding: While the consumers are making decisions regarding the money cautiously, their buying decisions would not just include the product quality, but the Brand Goodwill as well. If you have been a very prominent sales-oriented organization with a minimal approach to brand creation, you tend to fail in hard times. Surprisingly, while the market was quite depleted by the economic liquidity, people were still buying the brands they trust at higher prices against the brands they don't.
2. GIG is the backbone: Organization's fixed cost is the main reason for draining away the liquidity during the uncertainty of the Pandemic. Having around 40-50% workforce on contract or time-wage would help you survive in the bad times as well as would save you from the clutches of limited expertise. Also, it would give you the freedom to shift between strategies
3. Revisiting the Lower Management: Lots of small businesses don't understand the value of the Training & Development of their bottom-level employees. Training them regularly and getting them aware of the Organizational condition would help you when the middle or top-level management becomes too costly to survive.
4. Automation & Documentation: It is very much necessary for businesses to understand the importance of administrative automation whenever a company hits any roadblock. During such hard times, automation would play the role of Fail-safe against the wrong decision-making. Also, the documentation of each decision and process would not just help in valuation growth, but would also vitalize the core of management. Since the bad times might call for huge employee turnover, this process would make the trajectory smooth.
5. Redefining the Business model: In the times where scalability is the root of businesses (especially Startups), the subscription model is the magic element. While the companies are not certain on client retention, it is better to create one product that can work in a subscription model. This way, an organization would be in a condition to survive and pay to the non-revenue generating workforce till the subscription period expires and this way, the debt control measures would also stay in place.
These 5 are the generic ideas of how an organization can sustain and develop in times like pandemics. However, each industry would need a different strategy to trigger survival and growth during hard times.