We already knew that the coronavirus would affect the economy at the time of its outbreak in Wuhan, China. What we didn't know was how much change it would force on businesses in Europe. The conference and trade show, comedy and music industries are among the first financial victims of the pandemic. Importantly, not everyone has yet said the last word in this uneven duel.
Cuts and savings
The turnover of 30% of enterprises has fallen by half, and one in five companies are going to lay off employees, according to research conducted by dhosting.pl together with research agency SW Research.
Reduction of fixed costs in order to maintain liquidity is one of the first mechanisms implemented by entrepreneurs. Reducing the number of jobs, agreements on reducing salaries or termination of contracts with some of the so-called contractors are just some of the steps taken. The immediate future of many companies will depend on proper adaptation to difficult market conditions.
- 47% of Poles believe that a pandemic will cause them or a relative to lose their job,
- 51% of Poles expect the impact of the pandemic to significantly reduce their income,
- 68% of Poles assess the government's actions as insufficient,
- 70% of Poles positively evaluate their employer's commitment to keeping their jobs.
The survey was commissioned by Konfederacja Lewiatan and conducted by the Institute of Public Affairs Research. It used the CATI method on a representative sample of 1002 adult residents of Poland.
Investment or savings?
Saving at all costs, without considering the costs associated with adapting to the current situation, can be disastrous in the long term. From today's perspective, determining the date of the end of the pandemic sounds like fortune-telling, so what is certain are taxes, social security contributions and other costs related to, for example, the lease of space.
The general economic situation has caused a weakening of global demand, and thus the struggle for customers has become even more difficult for many companies, with a noticeable increase in competitive activities. In such realities, can you afford not to invest in marketing or new sales channels? It seems almost certain that for most industries it is not..
Adapt or die?
The real threat to business, which has affected thousands of entrepreneurs, had to be met with a quick response. In addition to cutting employee expenses, IT and the titular digitization of processes, and in some cases the entire business, came to the rescue.
Hundreds of articles have already been written about remote work and the tools that are used for it, so at this point we can skip the topic of how to set up a Hawaiian background in Zoom. However, in addition to the organization of work, many industries, such as the comedy industry mentioned in the introduction, have adapted to the current situation - for example, by organizing performances online, using PPV technology known from sporting events.
Corporate social responsibility and entrepreneurial self-help
There has been a lot of discussion about the anti-crisis shield prepared by the government. But it is worth mentioning many grassroots initiatives such as support groups - e.g. "Infected Business", where professionals from different sectors gathered and offered free help, audit or consultations related to advertising, marketing or website development.
Another interesting initiative, this time aimed at NGOs, is www.techtotherescue.org. Over a hundred companies from Poland and abroad have declared their support for NGOs affected by the coronavirus epidemic in recent days. NGOs often lack the budget, knowledge and specialists to carry out rapid digitization. Thus, they are not able to respond as efficiently as private companies. Companies that have pledged to help through TechToTheRescue.org agree to make their details public and commit to delivering the proposed services as quickly as possible.
Also, Advox has joined the TechToTheRescue initiative, so if you know an NGO that needs help, please pass the information on or help them get in touch with us.
The solidarity of society and many grassroots initiatives can be seen at almost every turn. Offers of free services and support in business are no longer surprising. It only remains for us to hope that good deeds do not disappear with the end of the epidemic and to look with respect on those who help altruistically.
Digital revolution v2.0?
At the turn of the twentieth and twenty-first century, we observed the so-called dot.com bubble, consisting of an almost euphoric overestimation of all publicly traded companies operating online or those that were about to start. In today's reality, the Internet is not a bubble or visionary, but a pragmatic necessity for many companies, including those that have not tied their future to eCommerce.
A bakery with online ordering, an online grocery store or even an online pharmacy - driven by conditions, we are moving more and more towards a lifelong eCommerce revolution where these mundane activities will also be partially digitized.
The automotive industry, airlines and tourism seem to be in the worst position. If we just get used to this couchsurfing lifestyle, won't it have a long-term effect on the demand for these very services and products? For now, there is no time to look so far into the future, so #stayhome and chill.
