How does a business, or a doctor’s office or a retail operation that people depend on for their daily necessities, cope with the current COVID-19 situation?

Those that are absolutely essential must continue to operate. The Province of Ontario has now provided very clear guidance on what it considers essential, with the equally clear message that risk must be reduced to a minimum.

The question now is one of mitigation and adequate risk management – how best to reduce the odds of spreading the COVID-19 virus.

For the rest, there are two options.

The first is to suspend normal operations, or any operations, hunker down and wait it out. Under different circumstances, that might be sufficient.

But, we simply don’t know how long this need for social distancing is going to last, and from what I’ve read it could be a while.

For many businesses, halting operations for that length of time may be a blow from which they can’t recover.

The second option is to adapt.

Despite COVID-19, demand is still there

I am of course writing this from home.

Despite the fact our business is heavily invested in the traditional model of having people work in a conventional office, our staff all pitched in and we restructured to support mass work from home within 24 hours.

One of my sons works for a coffee chain that has always had a delivery service (people buy their beans there, too).

My son told me that on average, his location might receive five online delivery orders in an evening. By this week, it had climbed into the hundreds. 

The moral of the story? People still want their beans.

The same goes for many other products or services.

In many cases, demand hasn’t evaporated, it’s just now a question of how to fulfill it – safely. While we need to mitigate risk we also need to support businesses that keep people employed and paid.

Even the funeral industry is rethinking and readjusting how it operates because shutting down is obviously not an option.

What can your staff do instead?

It’s interesting to watch how grocery chains such as Loblaws are adapting with how they are handling health and safety in-store and making life easier for customers to take advantage of online shopping and parking lot pickup.

We already have food order apps and online delivery services like UberEats and Foodora. They make home delivery possible for restaurants that don’t have their own delivery services.

Is this the approach a greater variety of service businesses must adopt, and again, safely?

These food apps have demonstrated the trick is to find a sustainable and viable model that works for everyone.

A criticism to date has been how much it costs a restaurant to have its menu on a food app – the UberEats of the world take a big cut from each order.

The profit margin on those orders is therefore far less for the restaurant than it is with dine-in or pick-up take-out customers.

On the other hand, if COVID-19 has already reduced your business to take-out and delivery only, how much money does it save you to no longer have to worry about operating, cleaning and staffing a dining room?

Take-out/delivery orders also leave you with fewer dishes to wash and garbage to dispose of. It may be a lean trade-off to be sure, but reduced revenue is usually better than no revenue at all.

A local small business of course doesn’t need a third-party delivery service – it might be able to put to work the staff who are no longer serving customers in-store. Consider this example – a book store that is “throwing the book at Coronavirus.”

Longer-term impact on CRE and the workplace

The impact of the pandemic may at last prompt architects and designers to embrace a long-overdue rethink of how we approach modern office design.

Initiatives that focus on smaller workspaces over productivity, and now the need for greater separation between employees, begs the question: Do we need to re-think office space design and provide appropriate flexible space while at the same time encouraging telecommuting as much as possible?

This would reduce the cost of the wear and tear on our transportation infrastructure and the need to keep investing billions to expand that infrastructure, and it could also improve life balance by reducing the need for a lengthy morning commute.

From an HR perspective, the current situation may also prompt employers to wake up and see the benefits of providing more paid sick days to all staff. Not just provide them, but, more importantly, actively encourage employees to use them without fear of being judged.

Even with a regular flu and cold season, people too often drag themselves to work, when they should have just stayed home, because they think their boss or their co-workers expect it.

How many times have you seen someone at work sick when they should be at home?

I haven’t said it out loud, but I have said to myself, “what the @#$%!”, when I see someone at the office who should not be near anyone. They infect others and soon you have a workplace full of sick people who struggle to be productive.

Productivity may be better served by enhanced flexibility to support working from home, particularly if someone is under the weather. If you’re sick, you need to stay at home and away from me.

If you’re well enough to work but still not well enough to be with others, there should be encouragement to work from home. I can tell you right now working from home can still be pretty productive.

Motivation to think outside the box

I wouldn’t use the word “opportunity” to describe what business owners face, but they certainly do have the motivation to think outside the box and adapt to change.

From an evolutionary perspective, it isn’t the largest or strongest that necessarily survive, but those most able to adapt.

Even in the best of times, when our economy isn’t being rocked by a global pandemic (or a Saudi-Russian price war on oil), this holds true. I always return to retail as a prime example and why former icons such as Sears and Eaton’s faded away due to the choices they made.

These pressures that now face businesses and workplaces large and small require creative ideas from all of us to keep the economy going and avoid the boneheaded ideas from 90 years ago that sunk the economy and gave us the Great Depression. 

Is the situation we face dire? Very much so.

But, we are a species that has the ingenuity to respond and adapt.

To discuss this or any valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am always interested in your feedback and suggestions for future articles.