There have been conflicting reports about what businesses must do to survive the post-pandemic world. While no one can predict the future, yet relying on data and past experiences, we can certainly make very educated guesses of its provisions. In fact, in a recent speech, Fed Chairman Jerome Powell did exactly that when he stated that the
world is now moving toward a “different economy.” How different is the new economy is a question that still remains to be answered. But, he did give us some clue where to find the answer. In particular, he noted the acceleration of existing trends in both the economy and society, which includes the increased use of technology, automation, and telework.
One thing we know for sure to be a major business-killer is a constantly changing market environment. For example, at the beginning of the 21st Century, many major companies that did not adapt quickly enough to the new internet-based economy went bankrupt. Those who managed to survive past a few years did so at extremely high and prohibitive costs. In fact, in a recent study published earlier this year, Goldman Sachs predicted that approximately 50% of black-owned businesses would not survive the pandemic. This is compared to the lesser percentage of White, Latino, and Asian-American-owned businesses.
I had with this headline when the study was initially published because it helped mask the bigger tragedy. While Black-owned businesses are clearly closing at a higher rate, the true tragedy here is that all small businesses are under acute threat of bankruptcy during the pandemic.
The study also gave the erroneous impression that those businesses were shut down by the pandemic, which is false. As it now becomes clear, businesses are not closed by the pandemic, and rather they die because they are unable to adapt to the new marketplace environment it has helped to create. For example, I know many restaurants that remain closed since March 2020; conversely, I know many others that are thriving and are seeing their profit margins doubled or tripled during that same period.
For the restaurants that remain closed, many of their owners expected the pandemic to be quick. They were hoping that in a matter of days, or weeks, things would go back to “normal.” As a business owner, I recently spoke to beautifully said to me, “now is indeed the normal, my friend.
Telework is here to stay, and so is DoorDash and other at-home delivery services. It would be a fatal mistake for anyone to expect anything else,
including the return to the status quo ante.” Therefore, for any business to operate a year from now or later, it seems the time for them to acquire and master the new economy’s skills. Should they miss this window, it is undoubtedly clear the price they may have to pay to do so in the future.