Forced to adapt, businesses rethink how they make money

By Joyce M. Rosenberg

THE ASSOCIATED PRESS

NEW YORK _ Many business owners are changing the way they make money as they attempt to recoup revenue lost to the coronavirus outbreak.

The changes can look subtle; for example, when owners of clothing stores decide to beef up their internet business. But often such adjustments involve an entire rethinking of the business model the blueprint that encompasses the key aspects of running a company with significant changes to staffing, technology and inventory.

For many companies, it’s a matter of survival, but for others, the changes have been a silver lining amidst the crisis.

When Big Bottom Market, a cafe and food shop in Guerneville, California, closed in mid-March, “I had to take stock of what we had and think about how we could evolve the business,” says co-owner Michael Volpatt.

Volpatt started a daily cooking show on Facebook in hopes of drawing customers to Big Bottom’s page on the online marketplace Etsy. He succeeded: Daily visits jumped 66% and customers stocked up on merchandise including biscuit mixes, coffee, preserves and T-shirts. That revenue from Etsy covered Big Bottom’s monthly rent, utilities and insurance.

The cafe, which gets business from visitors to California’s Sonoma wine region, reopened with social distancing steps May 8, selling meals and merchandise at the door. Business is down 80% from its usual pace the cafe can normally seat 40. During the week, the cafe’s business is mostly from people who live locally, but the weekends bring people from all over the Bay Area.

Volpatt doesn’t know when he’ll fully reopen the cafe but going forward he expects to get substantial business from the internet. He’s even hiring a staffer to help build Etsy sales.

Four months after launching the Velvet Window clothing store in Dallas, Amy Witt was forced to close its doors. She soon realized she’d need to adjust her approach to ensure customers came back when the store reopened.

“The forced closure gave me the opportunity to say, `what’s wrong with my business how do I fix it?”’ Witt says.

Before the outbreak, 85% of Witt’s business came from shoppers coming into the store. With the shutdown, she realized she needed to be more aggressive with social media to draw shoppers to her website; she needed revenue and to engage with her customers. She taught herself and her staff how to make Velvet Window more visible in internet searches. She picked up new customers, including some outside the Dallas area.

As she prepared to reopen May 1, Witt concluded she had to offer more services and accommodations in a retail environment reshaped by the outbreak. So she set up private shopping hours for some customers _ for example, those most at risk for complications if they contract the virus. She’s using video or messaging apps to show her fashions to others anxious about coming to the store. Curbside pickup or deliveries can also be part of the deal.

She sees all these steps as elements in a new business strategy: “It’s something we will continue to offer” even after the current crisis ends, Witt says.

Overhauling or refining a business model should be an ongoing part of running a company; even successful owners often think about making adjustments. But any crisis forces owners to reassess their business. After companies were forced to lay off staffers during the Great Recession, many turned to freelancers when they began hiring again. That saved money on salaries and benefits and gave owners more flexibility.

Business models are likely to undergo significant changes in the coming months given the damage to the economy from the outbreak. A lot of uncertainty remains about how much consumers will be willing to spend, travel, dine out and go to sports and entertainment events _ and when social distancing measures that limit business will be lifted.

Before the outbreak, D’Artagnan sold most of its high-end meats to restaurants where customers might pay $50 for filet mignon or dine on exotic varieties such as squab or quail. But with restaurants closed, half the company’s business is now from people buying meat to cook in their own kitchens or on the backyard barbecue. That means the Union, New Jersey-based company ships smaller cuts and packages of beef and chicken to consumers rather than the larger cuts and whole animals it delivers to restaurants.

“It’s a very different demand in the kind of animals people buy to cook at home instead of ordering in a restaurant,” owner Ariane Daguin says. The changes mean different procedures for butchering and packaging the company’s products.

D’Artagnan’s e-commerce business, which accounted for 10% of revenue before the outbreak, is up five-fold, says company president Andy Wertheim. The company won’t know until restaurants are operating again what their demand will be, or whether people will continue to do their cooking at home. But, Wertheim says, D’Artagnan is prepared to have a different business model going forward and increase its staff to get the work done.

The changes at some companies have come from serendipity rather than crisis. At law firms, shelter-in-place rules have forced attorneys to meet with clients over video rather than in a traditional office visit.

Attorney Katherine Miller’s work includes mediation in divorce and family law cases. She says the virus outbreak has chipped away at clients’ reluctance to hold meetings online. She plans to use that change in attitude to expand her practice.

With the use of video meetings, it will be easier to co-ordinate schedules when all the parties don’t have to travel to her office, and Miller will have less travel time when she attends meetings. And she won’t be limited to her current practice area, New York City and its northern suburbs.

“I used to think, this is going to be an uphill battle to convince people that it’s a good idea. But now because of the coronavirus, I don’t have to do that anymore,” she says.

Sedgwick to acquire Cunningham Lindsey

Source: sedgwick

Sedgwick Claims Management Services, Inc., a leading global provider of technology-enabled risk and benefits solutions, has signed an agreement to acquire Cunningham Lindsey, a global loss adjusting, claims management and risk solutions firm.

An industry pioneer with 100 years of experience, Cunningham Lindsey assists businesses, insurance companies, brokers and policyholders around the world by offering expert support when losses occur, such as during natural disasters. The company’s 6,000 highly skilled professionals comprise local teams in 600 offices across 60 countries.

“Bringing the incomparable talent, expertise and robust global capabilities of Sedgwick, Vericlaim and Cunningham Lindsey under one umbrella is among the greatest stories to emerge from the claims industry in many years,” said Michael Arbour, Sedgwick group president. “This exciting development puts us in an optimal position to meet the increasingly complex needs of clients around the world.”

The Cunningham Lindsey group includes a range of services addressing all aspects of the risk management life cycle, including pre- and post-loss; their specialties in loss adjusting, third-party claims administration, global account management, forensic engineering, and restoration and repair consulting, among others, notably complement the existing offerings of Sedgwick and subsidiary Vericlaim.

“Joining forces with Sedgwick and Vericlaim presents an opportunity to provide our clients an end-to-end service solution around the world,” said Jane Tutoki, global CEO of Cunningham Lindsey. “Our vision is to align our complementary services and further grow the reach to a scale that will help redefine the expertise and talent we can offer. We are excited about the next step in this journey with Sedgwick and Vericlaim to offer a truly global path to transform the way we provide our services together.”

The strategic acquisition of Cunningham Lindsey enhances Sedgwick’s status as the leading global provider of innovative risk and benefit solutions and broadens the company’s international footprint, Arbour said. Following the close of the transaction, the Sedgwick family will be more than 20,000 colleagues strong.

“At Sedgwick, taking care of people is at the heart of everything we do, and we know that Cunningham Lindsey shares our commitment to caring for people when the unexpected occurs,” said David A. North, Sedgwick president and CEO. “Together, we will have the capacity to reach more individuals in their time of need in more locations than ever before.”

The closing of the transaction is subject to customary conditions and regulatory approvals. 

Caisse to invest more than US$400M to acquire minority stake in insurer Hyperion

The Caisse de depot et placement du Quebec has signed a deal to acquire a significant minority stake in Hyperion Insurance Group.

Under the agreement, the Caisse says it will invest more than US$400 million in the company as a long-term growth partner.

Hyperion is an international insurance group including broker divisions Howden and RKH and underwriting division Dual.

The transaction is subject to regulatory consents.

The Caisse joins investment firm General Atlantic as a partner in Hyperion.

Management and employees will remain the largest shareholder group.

 

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest