The Business Challenge of Covid-19 affects everyone, owner and employee alike.
Many American business models are built on razor thin margins and low costs. That model was destroyed by Covid-19. Well sort of. For a big company like Wal-Mart, the model is exactly the same. To cover the new costs associated with Covid-19, the consumer will pay more, get less, even at Wal-Mart.
Inflation is just one of the ugly challenges facing businesses moving forward into the second round of the “roaring 20’s”. The 1920’s followed the Spanish Flu Pandemic of 1918-1919. Here we are 100 years later in a similar predicament. Who knew? James Dale Davidson apparently did in his two books, The Great Reckoning and The Sovereign Individual.james dale davidson
Covid-19 Damage Assessment
One industry I almost dove into just a year ago is the restaurant industry. Restaurants are going to be one of the industries hit the hardest by the Covid pandemic. Most US based restaurants use a volume model. Tables are “turned” every 30 to 90 minutes depending on the restaurant. In Europe many restaurants only have two seatings. But we eat out a lot more than most countries.
In addition to the “turn times” many restaurants cram tables right to the limits of tolerance for local fire marshals. Both of these factors in running a restaurant have changed. Some say it will go back to normal. I don’t believe it. If more people are working from home, that means a few things. To begin with the desire to remain distant will cause people to eat at home more. Supermarkets are getting smarter with pre-planned meals that can be delivered.
Pizza may be the exception since most pizza restaurants are already heavy in the delivery mode. Pizza is also interesting because no one needs to touch it once it is cooked. Unless you eat it with your hands and then you already had those germs. Wash your hands problem solved.
Creating a Virtual Business
Many other businesses from factories to law firms are learning how they can become “virtual”. Our offices have been virtual since 2010. If you came buy you would find a pile of mail and an empty space. I, like all of my team work from home. I say team, because I am the only employee of the company. Everyone else is subcontracted out. It keeps costs down and if I have no work, I have no payroll. Vacation planning is way easier now.
Lately I have spent more time consulting with schools and small business owners on how to become virtual. We even produced a virtual graduation for a local college because their AV team didn’t know how.
It is very possible to get your business back up to full speed now. You can do this without your staff in the office every day. Last year I was the only person who truly worked from home. One neighbor is a traveling salesman so he was home one or two days each week. Now, most of my block is working from home. There are doctors, lawyers, accountants and secretaries all working from home.
Change Your Business
One aspect of the business challenge of covid is how to change your business. A big part of what we do is video production. We even created a production company for one project. If you didn’t now it, video is nearly 50% of all search. If you don’t do video, you are losing 50% of your potential internet customer base. When the covid shelter in place happened, a big chunk of my work stopped.
Not to be beat, I started a Live show from my garage. It was really an experiment generated out of boredom. The point of the show was to demonstrate our capability. Suddenly it became fun and had fans. Now there is a COOLTOYS TV channel on Roku, Apple TV and Amazon. In order to adapt we changed our business. Now we have a platform to create videos for clients that we didn’t have before.
We also landed a job from the Livestream experiment. Because we had to learn how to shoot without a crew, we could do things no one else could. We livestreamed a university graduation. We had to set up cameras and laptops in remote locations. Sanitize the locations and make it so that we could turn the camera on remotely and add it to the livestream. Each grad entered, gave a speech and left.
In another location the faculty was set up the same way. I was about 20 feet away directing the faculty in a mask. There was no contact or even breach of social distancing. I set up everything at the locations early in the day and broke it down that night and the following morning.
Now we have a standard “package” so other companies can do the same thing. We can even set them up so they can manage it all on their own. I would say this isn’t “Black Magic” but the Black Magic ATEM is a key piece of hardware to make this happen.
Location doesn’t matter
For the past ten years I haven’t been in the same country as my secretary. She lives in the Philippines. Some call her my “VA” or virtual assistant. Our best graphics person lives in Italy. She started with us when she lived in the Ukraine nearly 15 years ago. I have “virtually” watched her life change and her daughter grow up. The business challenge of Covid hasn’t changed any of this because we were already working “in place”.
One of the keys to virtualization is understanding your cost of productivity. Most law firms have this nailed. Everyone accounts for every minute they work. That time is reflected on a clients bill. $500 per hour for a partner, $300 an hour for a research specialist, $175 per hour for a legal secretary. In fifteen minute increments of course.
The Bourquin Group follows the same model for consulting work, but the rest is flat rates. If you need a basic website, it is $2500 or so. I give you one price, you get a website. On an hourly basis a website can quickly go to $25 or $30 thousand. Be setting a standard and a fixed price. Both sides know what to expect.
The same is true of virtual work. If I need a logo for a client, I have a fixed price that I will quote. I then reach out to a dozen or so designers and pay them each a small fee to submit ideas based on my input. Once I have three or four logos, I’ll present them to the client and do some market testing. Then I go back to the artist and pay them a fixed rate to create a standard marketing package. There are about 15 different versions of the logo in this package.
Knowing The Job Is Key
Only because we have standardized the logo formats, can we operate this way. All of our artists know the standards for the social media platforms, our T-shirt Vendor, video production etc. These are all standard sizes and output formats. One of our artists in Australia has all of these as templates so when he wins, he is done way faster than the others. He gets paid the same.
If we didn’t know exactly what our clients needed how could we bid the job? All we could do is quote rates and give a ball park figure or a range of possible costs. Do you like bids like that? They scare me.
With hourly employees, it’s very hard to gauge productivity. It can be very vague if the employee is training another employee, or helping clean up the office. When you pay by the job, expectations are clear on both sides.
If you need help getting your virtual business going. Call us or join one of our training programs.