From survival to growth: how your company can emerge stronger after COVID-19

Entrepreneurs navigating COVID-19 lockdowns have already been forced to make very difficult decisions, from laying off employees and reducing operating hours to seeking emergency capital and government relief.

But while those first initial months have been truly difficult, challenging and even vexing, a whole new host of questions looms large as economies around the world reopen gradually.

As an investor, I continue to regularly meet private company founders grappling with what’s next. Across many of these discussions, several common themes have emerged that entrepreneurs would be wise to consider as they position their businesses to thrive in an eventual recovery.

Change, then change some more

COVID-19 has already forced many companies to rethink their business models in order to survive. But driving significant change shouldn’t just be a means to stop the immediate bleeding. In fact, it should serve as a powerful mechanism for unlocking value in the business and optimizing how it operates.

For example, moving a key part of your business online or outsourcing non-core back office functions to a third party could both drive growth while keeping costs in fighting shape. Did you re-negotiate your lease with your landlord? Great – now adopt the same approach with every vendor who is willing to listen. The pandemic has created many receptive ears, especially since many of the companies you buy from are facing their own challenges.

Consider new markets

Canadian companies have long looked to the U.S. as a lucrative and relatively similar “second home market” – a wealthy and consumer-driven country with a population roughly 10 times that of Canada. The pandemic has changed all of that, with the border shut to nonessential travel and COVID-19 spreading rapidly throughout much of America. Bringing the virus to heel in the U.S. is widely expected to take significant effort and time. Consumer spending will also take time to rebound once the effects of stimulus spending begin to fade. Now may be the time to consider whether selling your products and services elsewhere makes more immediate sense.

Could Europe be an option? What about New Zealand and Australia? Such conversations have to take into account any unique considerations relevant to your specific industry, as well as travel or other restrictions currently in force in those markets. However, if your company has the right partners, relationships, market fit and team in place, now might be the time to expand. You also don’t necessarily need to look beyond our border. Canada has fared very well throughout the pandemic, so rather than a different country, entrepreneurs could look to expanding into new provinces and territories instead.

Shore up your balance sheet

Funding always seems to be available when you don’t necessarily need it. The pandemic has demonstrated the importance of financial flexibility and the value of liquidity to business owners. With interest rates at persistent lows, now is the time to extend debt maturities and establish or re-establish ample lines of credit – two strategies that will help companies through the next crisis.

At the same time, private equity investors are also sitting on record-breaking piles of dry powder – capital they have raised but for which they have yet to find a home. This creates a significant opportunity for companies who can show clearly how they’ve navigated the pandemic and how their business is entering recovery with momentum on its side.

Above all else, entrepreneurs would be prudent to prepare for this crisis to resolve itself over a much longer time frame than currently expected. That’s because there are still many significant unknowns on the horizon, from the possibility of a second wave of infections to the efficacy of any eventual vaccine and the ongoing ability of governments to keep injecting additional stimulus to stoke a recovery.

Planning prudently while thinking transformatively about your business will stand you in good stead in a slow recovery. And if we see the back of COVID-19 sooner rather than later, you and your business will be that much stronger and more prepared to compete and grow.