The Impact of COVID-19 on Canadian Businesses
Over 50% of small businesses in Canada are experiencing a revenue loss as a result of Coronavirus, according to a survey conducted by the Canadian Federation of Independent Business. One-quarter of businesses reported that they will not survive the month if the trend continues.
The ongoing Coronavirus pandemic is threatening the livelihood of businesses both domestic and abroad. Economic experts are predicting a crash similar to the one we experienced in 2008, but things could take a more dramatic turn as the situation unfolds.
Factory closures abroad have disrupted supply lines, job security has reduced all nonessential spending, and protective measures have halted in-store foot traffic. Several provinces have declared states-of-emergency. Fitness facilities, daycares, and non-essential businesses have closed their doors, restaurants have switched to take-out only models, and staff levels have been reduced to the bare minimum.
According to the BC Chamber of Commerce, 95% of BC businesses have been impacted by the epidemic. The outbreak has eroded global trust and brought to light the hazards of globalized interdependence. Social and political unrest continues to grow as the Coronavirus pandemic poses a significant risk to business continuity for the foreseeable future.
Business Sectors Most Impacted by Coronavirus
While the pandemic has presented challenges for all businesses, the aftermath has been significantly worse for certain sectors. Hospitality, retail, tourism, and personal service industries are struggling to find their footing in an unstable market. Companies are prioritizing cash flow over profits to maintain payroll and attempt to break even.
The Government of Canada has called for Canadians to avoid all non-essential travel to control the spread of the virus. Flights are canceled, airports accepting international travel have been limited, and travel across the Canadian-US border is temporarily restricted. Perhaps most crucial to British Columbia is the closure of all Canadian ports to cruise ships until early July.
Factory closures abroad have meant extensive disruptions to the supply chain, causing issues in the manufacturing of vehicles, technology, apparel, and various other industries. When accounting for the length of supply chain cycles, it may be months before we realize the full impact.
The coming effects to manufacturing are expected to be exponentially worse than during the 2003 SARS outbreak, as China’s manufacturing has since quadrupled. The hazards of an increasingly globalized supply chain threaten the manufacturing process and highlight the necessity for a diversified supply chain.
Failure to embrace an online marketplace has caused massive revenue loss to the luxury market, which relies on fashion events to generate sales and press. Multiple Fashion Week shows have been canceled, including those in Seoul and Toronto. The impact of Coronavirus has many luxury brands rethinking their aversion to e-commerce.
But luxury goods are not the only segment of retail to take a hit. Brick-and-mortar stores that have not effectively implemented online pathways to purchase goods are ill-fated to find success in a self-quarantining society. Fitness centers and personal services such as salons, massage parlors, and spas have all had to close doors. As preventative measures continue, businesses can no longer rely on in-person sales.
Nearly half of all small Canadian businesses will be unable to make any sales if face-to-face interaction is no longer possible—and with social distancing measures taking place globally, this presents a huge issue.
Businesses Get Creative in a Crisis
But the industries hit hard by COVID-19 are resilient, and are creating adaptive solutions for these difficult times. Companies are mandating that all non-essential work travel shall cease and those that can are moving to a work-from-home model. Interviews for potential candidates are being conducted virtually. Casinos that depend on tourist patronage have since shut their doors, but digital versions have seen an increase in business.
The way people buy food has had to change dramatically for businesses to survive. Restaurants are switching to take-out and delivery only, while food courier services like Foodora and Uber Eats are offering their services to customers for free, with some providing contactless delivery options. Online grocers are growing, with usage double what it was a year prior. Post-secondary institutions are switching to online classrooms amidst mass school closures, and educational company Scholastic has launched free online courses for younger students.
Companies that have been able to successfully integrate their services online have managed to stay afloat under social distancing practices that limit person-to-person contact. With so many services closed, many people are turning to online options—some for the very first time. Ease and convenience have always been reasons consumers choose to shop online, but now safety concerns and a lack of in-person options have created a necessity to conduct business digitally.
This necessity is twofold: to preserve cash-flow and to engage customers in a time when in-person interaction is dramatically different. Fear of personal contact has created a new challenge for businesses. Online shopping continues to rise as consumers avoid physical stores, and businesses that lack an online presence are struggling.
Imagine Better Solutions Can Help You Develop a Plan for Your Business
Weathering difficult times involves a proactive and adaptive response. Imagine Better Solutions approaches business continuity management holistically, helping you navigate through uncertain times and build organizational resilience within your business. By establishing emergency protocols and seamless online integration, we can ensure a continuity plan to get your business on the right track.
Our exposure to numerous industries means we can offer tailored services for your business, whether you’re in need of omnichannel marketing or web development. We leverage our experience to create best-fit, tactical solutions for your business.