¿Has your company been affected by Coronavirus? Do you want to know the real impact it has had on companies? Do you need to know what to do to help your company overcome this crisis? If you have asked yourself any of these three questions, you are in the right place. In this article, we are going to give you answers to these three questions and many more.
From the real impact Coronavirus has had on large and small companies in Spain, to the factors any businessman or entrepreneur should take into account to turn their business around (any business) escape of this crisis that affects us all so much.
Because you know what they say, in every crisis, there is an opportunity. Many businesses have indeed been significantly affected by COVID-19, and the data you see below are devastating, but it’s also true that many other businesses have been able to transform themselves to survive and even a few have grown. This is why you must learn to differentiate which are the key factors in the success of the business fight against Coronavirus.
Index
The economic impact of Coronavirus on Spanish companies
The economic impact of COVID-19 on small and medium enterprises
Questions to ask to start the digital transformation
How to start the digital transformation in the company to fight Coronavirus
The economic impact of Coronavirus on Spanish companies
As you already know, the impact on the Spanish global economy has been very hard and this is because the confinement period almost totally paralyzed the activity of most companies. With the new waves, there is also a great fear on the part of families when it comes to consumption so there are many of them who tend to save. All this means a big drop in general consumption in Spain.
In a survey carried out with several banks to find out the real impact of Coronavirus, they showed some really worrying data. 78% of the companies have suffered a fall in their activity, of which 38% of them say this activity has fallen more than 60%.
The current crisis affected the majority of Spanish companies, which could worsen in 2021. However, digital businesses have grown this year and will continue to grow in coming years.
As for what the future holds for us during this COVID-19 crisis, there is no good news. This economic crisis is expected to be worse than the previous one in 2007/08. In fact, 71% of professionals think there will be another decrease in income during coming months and into next year.
Also, in sectors such as hospitality and tourism, the pessimism is worse. In addition to the fall they have already experienced, there is an anticipated reduction in demand causing uncertainty for taking business decisions.
But it is not all negative data. Alternately, it is necessary to highlight the growth of online businesses. As we already mentioned, Coronavirus also has offered opportunities, and these new trends show an acceleration of digitalization in all businesses, causing consumers to buy much more online.
Following a recent Spanish survey, it is estimated 74% of consumers have changed their habits and 60% of consumers buy more online, even those over age 65. Although many of users will return to stores, we also believe that e-commerce which has increased this year from 9% to 14%, will continue to grow even more. So it would be a great idea to create an online store.
The economic impact of COVID-19 on small and medium enterprises
As for the more specific impact that Coronavirus has had on small and medium-sized companies, the data is not very encouraging. 82% of family businesses have made cuts this year. A large majority of these companies have had to take an ERTE and 67% of these companies have cut up to 15% of the workforce.
Besides, the biggest impact of the COVID-19 pandemic has been on unemployment, with 6% of companies saying they have cut their workforce by 30% and 5% saying they have cut their workforce by a 45%.
On the other hand, the only effective measure companies have used during the Coronavirus crisis to try to solve the situation has been the implementation of teleworking. 70% of family businesses have opted for this solution.
Finally, more or less half of the companies have opted for an ERTE, and the other half has chosen an adaptation of the productive structure. It has been of vital importance to adapt quickly to the new situation, and allow them to continue their activity.
SMEs were the main victims of the crisis. A large part of them have had to reduce their investments. Many of them have opted for an ERTE for their employees and the others have been able to implement teleworking more or less effectively.
Finally, it should be noted that this Coronavirus pandemic has caused one-third of small and medium enterprises to reduce their investments, and another third have even had to go into debt, while 18% have had to reduce their working hours and salaries
For next year, it is expected that more than 50% of the companies will be able to maintain their current employment levels while a third of them are thinking of reducing their staff. Only 10% of the companies are confident about making new additions.
When it comes to selling, there is a diversity of opinions, some companies are optimistic and think they will increase their sales, and others believe their sales will decrease. But the reality is they do not expect to recover their pre-crisis turnover until 2022.
Questions to keep in mind before starting the digital transformation of your company
If you have come this far, you likely are one of the companies affected by the COVID-19 crisis and you are looking for solutions to combat it. Before knowing what to do to optimize your company’s resources and navigate forward, you must ask yourself certain questions to know in which direction your company is going.
Nowadays, digital transformation in companies is a vital factor for the growth of companies. In fact, the small and medium companies that are correctly digitized are literally eating up the big companies that are resistant to change. These are the questions to ask to survive the economic crisis of the pandemic as a company:
Is my company ready for the change?
We are facing a change of era and as in any change of era, the ways of doing things change and that is why companies that want to survive must be willing to evolve. This evolution must be present in the whole organization and must start from the main command.
Can I easily manage my company digitally?
As you know, digital transformation in companies is the order of the day, and it has been seen that most digital companies have managed to get ahead of the crisis. Therefore, it is critical that any company throughout its value chain be managed digitally… processes, administration, human resources, marketing, and even sales. It can be complex and laborious, so it is advisable to have the support of specialized companies like Iberactiv for implementation.
How does it affect my employees? Can I make them telework?
Employees are the fundamental pillars of any company; without them, there is no company. Workers must be protected and must also be able to perform their work with total normality in any condition, and that is why there must be a plan for effective teleworking. It must contain organizational measures to continue the business activity; we will adress-in-depth later.
How does Coronavirus affect my business model?
This is another fundamental aspect since the traditional business model has been seriously affected by the situation. It is recommended you make an exhaustive analysis of all your business, so the impact of Coronavirus on your company can be determined. If you know where there is a problem, you will know how to readjust to the changes in consumption previously detailed.
Is Coronavirus affecting my sales?
This is probably the question that most worries any entrepreneur or businessman. If there is a decrease in income you will not be able to pay bills. Therefore, if your sales are being affected directly, it is time to look for other ways to generate income, such as creating an online store, or optimizing it if you already have one.
Does it affect my supply chain?
Nowadays distribution has become globalized and this makes supply chains much more complex. You can buy from practically anywhere in the world and this crisis has paralyzed or overloaded many distribution networks making suppliers unable to meet the times. Effective management of suppliers is of vital importance today to guarantee your products.
Do I have enough liquidity to face this crisis?
As there is an impact on income, the bills of companies have also been affected and it is liquidity and debt that concern entrepreneurs and business people. Therefore, managing accounts effectively and in real-time is a determining factor for any company.
Am I legally prepared for this situation?
The crisis caused by Coronavirus has made governments adopt new measures both in fiscal and legal terms. Companies must be aware of any measure that affects the business, for example, tax exemptions or economic measures that could impact decisions.
How to start the digital transformation in the company to fight against Coronavirus
After having answered the questions we have previously formulated, we are sure you already know your business situation, and if the situation is not positive for your company, don’t fret. We are going to provide solutions that will allow your organization to survive this economic crisis caused by Coronavirus.
I’m sure you’ve heard before, the solution to your problems is in digital transformation. Although this digital transformation may sound familiar, you probably don’t really know where to start. Below, we will detail a series of fundamental aspects to initiate the digital transformation of your business:
Become an agile company: You must be able to look to the future; think about all that happened. It is a new opportunity to reorient your business and make it grow. Therefore, a reinvention plan is required. It is necessary companies develop in everything they wish they had invested in before. Be more digital, data-driven, be in the cloud, have more variable cost structures, with agile operations, and of course, be strong in Internet sales and security. Build a better future!
Keep your employees connected to opportunities: As we have told you, people are the most important thing in organizations, and employees are being affected by Coronavirus in their daily lives, as much or even more than your company. This is where the capacity of HR comes in; they have to be able to train employees digitally, and to develop agile strategies related to the workforces. Also, it is important to train workers to develop a more digital profile.
Know your customer, and what the changes in customer behavior are: If employees are important, customers are important as well. Putting the customer at the center of everything is what any successful organization should do. If you know your customer, and can adapt to what they need at any given time, everything else will be much easier. Implement a CRM and start working on a database. It is also important to develop a good digital marketing strategy.
Transform your company into a smart one: If you want to transform your company into a smart company it is necessary to leave behind the old vertical business model. For that, you must start empowering employees, you need to be more data-driven, and you have to rely on the cloud technology to increase the company speed. To do this, you must leave behind rigid structures. A resilient, agile, intelligent and growing company is capable of self-managing. Adopt a global model of distributed services, create an agile value chain, automate the routine tasks, and redirect and adapt the supply chains.
Generate resources and seize opportunities:As you know, new opportunities arise in every crisis. These opportunities must be taken without fear and for this, you must optimize your resources by rebalancing liquidity and readjusting the basic cost of your company. It’s also important to know it is advisable to reinvest the resources you have generated as much as possible for growth.
Get on board with new technologies:The crisis produced by COVID-19 is forcing many companies to quickly adopt new ways of working, and this is where technology plays a crucial role. Technology has proven to be the only weapon against the virus, so it is essential to establish long-term strategies for the business to be adaptable. Technologies such as robotics, “big data” and artificial intelligence are beginning to make a difference.
If the Coronavirus crisis has affected your company, adapt or die
It is clear this crisis produced by Coronavirus has affected everyone, the numbers are disastrous, and many extraordinary behaviors have come to stay. So, for companies, resilience, adaptation and willingness to change become key factors that can decide the success or failure.
Take time to ask yourself the right questions, and decide where you want your company to go. But do it, because experts predict this will continue for some time. Then, if you have decided to change your mind, bet on the digital transformation of the company. It’s the perfect time to do it and to get ahead of the rest.
Any company can do it, no matter what it does, its turnover, or its size. It is no longer about the future but about the present. And this tells us that the companies that have survived and grown, are the most digital. So if you want to be one of them, don’t wait any longer to give your organization the necessary changes. We will be here to help you with everything you need.
