(This post originally appeared on The Hill)
Does it sound crazy that business owners should be grateful for the coronavirus? I don’t think so. In fact, I think the ultimate outcome of this very bad experience will be a very good thing for all businesses, big and small.
Of course, companies in the U.S. are suffering right now because of the virus. Restaurant and retail traffic is down. Travel has been curtailed. Conferences and meetings are being cancelled. Key supply chains around the world are disrupted. The markets have taken a dive. Fearful consumers – worried about their jobs and lifestyles – are holding on to their money.
Unfortunately, as the number of cases grows and uncertainty spreads, things are only going to get worse over the next few weeks. It’s only a matter of time before the airline industry pleads for government bailouts and insurance companies complain about their rising costs. A recession is inevitable.
And yet, I can’t help but think of the reasons why all of this is good news in the long term for businesses, both big and small. Why? Because at some point the virus will have run its course. Things will get back to normal. The markets, and the economy, will have recovered. And many of us who run businesses will be smarter – much smarter – because of the 2020 coronavirus experience. How so?
For starters, after so many years of pushback, businesses will finally – finally! – embrace remote working as a productive and viable way to manage their workforce. Many employees, particularly younger employees, have been demanding the opportunity to work from home or be more mobile. Some employers have responded but a large number of my clients have resisted the change. But the fear of infection is forcing these business owners to reconsider their positions and allow their employees to work from home. And what will be the result?
Those same managers will kick themselves for not doing this ten years ago. As long as the approach is balanced, every business can allow most of their employees to have some form of remote working arrangement. The technology is mature. People can be trusted. Work will get done. And both employer and worker will find their lifestyles changed permanently for the better because of it. So, thanks coronavirus for finally helping us to realize this.
The virus will have taught us another valuable lesson: For God’s sake, stop relying on a single overseas supplier for our company’s products. If you’re a publicly held company, the accounting rules require you to disclose if you’re reliant on single supplier or customer. There’s a reason for that, and the coronavirus underscores it: Diversification is critical if you hope to become a long-term success. Sure, those products from China or Italy or South Korea are cheaper. But what if something – oh I don’t know, say a virus, a tariff, a war – interrupts your supply?
Who do you turn to next? And maybe, just maybe, doesn’t it make more sense to have a supplier or two here in the U.S., or at least in a less menacing or antagonistic country than say…China? Of course it does, and if anything we should be grateful to the coronavirus for reminding us that we shouldn’t build our businesses around a single source of supply from a single country.
Thanks also, coronavirus, for reminding us of the biggest lesson from the 2008 recession: Cash is king and the good times never last. In fact, they’re very fragile. The smartest business owners I know today who navigated themselves through the last economic downturn will tell you all sorts of reasons why they survived. They’ll talk about how they cut costs, experimented with new products, partnered, diversified and downsized unnecessary staff. Shouldn’t we be doing this all the time? Of course we should. But regardless of these strategies, they’ll also admit to one other major thing: They had cash.
When you have cash in the bank you make smarter decisions and better investments because you’re negotiating from a stronger financial position. More importantly, you’re also able to deal with other challenges like the economic uncertainties caused by virus outbreaks that bring about recessions. Just watch and you’ll sadly see a number of small businesses shut their doors in the coming year due to the economic slowdown caused by the coronavirus. However, the ones that remain – the fittest – still remain because they had cash in the bank. It’s not just the coronavirus. It’s Darwinism.
Finally, there will be one great thing that the coronavirus will do for us. Well, eight billion things. Because, whether you support the decision or not, the U.S. government will be spending more than $8 billion to fight the outbreak. That’s a lot of money. Sure, much of these funds will go into supporting states, hospitals and other medical providers. This money will fund many small businesses – from contractors to cleaning services – that support these organizations.
But a great portion of this amount will also be invested in tech companies, startups and others in the health care space to perform research and development and come up with a vaccine and other treatments for this and similar viruses. For the first time in U.S. history, the government has gotten serious about beating influenza, a disease that kills tens of millions of Americans every year. My bet is that this investment will succeed. Given the amount of new resources and our existing ingenuity, how could it not?
I’m not making light of the coronavirus. I realize that many more people will get sick, and even die, in the months ahead. There will be hardships. But I’m grateful for a few things.
That the virus struck near the end of winter when influenzas spread less; that so many governments around the world have taken aggressive actions to combat the spread; that, thanks to today’s communications and technologies, people are better educated about ways to limit its transmission. But above all, I believe that the virus will help many businesses, and particularly small business owners, to be smarter about the fundamental things they need to do operate their companies through both good and challenging times.