4 Brick & Mortar Businesses, None Are In F&B. These Are Their MCO Survival Strategies.

Author’s Blurb: With the MCO in place, only essential service providers can stay operational. While many of us are able to still carry out our day-to-day work tasks remotely, non-essential brick & mortar service providers may not be able to do the same.

This had me wondering: how are these brick & mortar businesses that aren’t in F&B surviving weeks of zero customers, and how will they bounce back from this?

For this article, I
managed to reach out to 4 different business in varying industries.

They include:

How Were They Each Hit The Hardest?

Surprisingly, She Mun
of Colony told Vulcan Post that it wasn’t their revenue from office space
rentals that was suffering.

“Colony has quite a
portion of revenue from renting out event spaces, so we’ve gotten hit the
hardest on our event space rentals
,” she revealed.

Even before the MCO
and gathering bans, almost all confirmed events to be held at Colony were already
being postponed and cancelled.

However, She Mun added
that they were lucky to be in a business where their main revenue stream comes
from recurring revenue from their existing private office/reserved desk rentals.

In a different
situation altogether, Patrick of FoW revealed that, as a wellness hub that
houses multiple services, the lockdown has brought their entire business operations
to a total standstill

The FoW team / Image Credit: Future of Wellness

Ka Wai of Superdough
told us that their main revenue stream comes from foot traffic in shopping
malls such as walk-ins, team building exercises, and tourists.

With everyone practising social distancing, they’ve had all revenue streams shut down, as their 8 overseas franchise outlets (which Superdough gets monthly royalty fees from) have also closed due to COVID-19 lockdowns.

For iConFIT, co-founder
Karine shared that it’s a very bad time for fitness club owners and trainers at
the moment.

“Club closures mean no
business, no income, while rentals and fixed costs remain
. Some of our
contract trainers get paid according to classes conducted, which means they
have zero income until the club opens again,” she lamented.

So, aside from Colony
(who’s mainly relying on office space rentals currently), the other 3
businesses are struggling with their main revenue streams being shut down.

How Will They Stay Afloat?

2 businesses who are
using online solutions to help them in this period are Colony and iConFIT.

Since Colony’s unable to host schedule office tours for interested rentees, the team came up with a virtual tour experience as an alternative so people could still get an idea of what their spaces look like.

Meanwhile, iConFIT has
made their programmes online and free for their club students (along
with their family and friends).

iConFIT’s online programme on Zoom / Image Credit: iConFIT

This was only made
possible thanks to iConFIT’s practice of putting aside 15% of their total
for the benefit of their club students.

This fund, which was
meant to return to students in some form of gifts, recognition, parties, and reward
programmes, has now come to their business’ aid.

Then there are businesses that are offering promo deals, of which
Colony is also one of them.

Colony is providing a better value package for office enquiries interested in starting their rent on April 1, including a 7-day refund as assurance if they find it unsuitable.

Regarding their event spaces, they’re offering a ‘book now at 60% off and use later’ promo, which they believe will benefit event organisers after the MCO period passes.

Likewise, Ka Wai
shared that Superdough is offering promo deals for both Breakout and Hauntu after
launching a campaign called ‘SupportOurGM’ (GM stands for both game master and
ghost master, respectively).

The Superdough team / Image Credit: Superdough

“We’ve set up an e-commerce platform to sell discounted tickets with a 1-year validity to attract customers to purchase them,” he said.

Breakout tickets now cost RM25/pax, lower than their usual student price, and Hauntu’s tickets which usually sell for about RM58 are now RM35.

On the other hand, Patrick said, “As we are service based, there is literally nothing we can do at the moment. Unlike F&B, we cannot offer mobile spa or beauty services on-demand at home.”

However, he also
added, “We are lucky that we have been planning for many months now new
business activities that aren’t restricted by business activities at our
physical wellness hub
. We are hopeful that these may help us stay afloat in
the coming months.”

To help with rental
costs, all the businesses are also in talks with their respective landlords.

What Will Happen To Their Employees Who Can’t Work

Despite their
coworking space still being open for members who run essential services, the
majority of Colony’s team is able to work from home.

For these members, Colony
has allowed their cleaners to continue working for mail and parcel handling
as well as to make sure that the offices are well maintained during the MCO.

The remote team then manages
and monitors the cleaners off-site, and sponsors food to them across all Colony

iConFIT’s online solution
ensures that their trainers are still able to do what they’ve always done at
the club, so Karine has one less worry about their jobs being impacted.

Back when classes could be held normally / Image Credit: iConFIT

On the other hand, Superdough
and FoW have a more sombre outlook on things.

Ka Wai shared, “With the MCO, basically nothing can be done by our on-ground staff. The directors and managers have called them one by one to explain the situation.”

He also added, “We did
a company-wide working hours adjustment and salary adjustment to control
the cash flow for the coming months. However, we’re hoping the e-tickets will sell
well so everyone can remain unaffected.”

Patrick and the FoW team are in the midst of working with HR to see if they can repurpose some of their staff since most of the work at the wellness hub cannot be accomplished remotely.

“We will do our best
to sustain as much as possible, but may have to make some painful decisions if
the lockdown continues,” Patrick said.

How Will They Ensure
A Business Rebound?

Speaking of what will happen if the MCO keeps getting extended, each department of Colony’s already has put together a business emergency response plan, even before the MCO.

Colony’s team / Image Credit: Colony

“We each have leading
indicators to tell us when we need to be aware of what, with activation
triggers, strategies, and action plans already put in place on each level to
tackle the circumstance we’re facing,” She Mun shared.

Also relatively prepared
for a situation like this were iConFIT and FoW.

The iConFIT team had actually predicted that something like the MCO would eventually happen and had prepared 2 weeks in advance to secure their online platform strategy.

“We’ll continue doing
the free programmes, and after new people sign up for it, they can buy our
club pass in advance
if they like our programmes. Our current students who
want to buy more passes will get special promotion prices,” Karine said.

This can bring in advance payments for the club to hold on a little longer until they reopen.

As mentioned earlier,
FoW already had plans for some time to offer wellness solutions beyond their physical

“In fact, we were going
to launch in Q1 a number of O2O initiatives, our digital platform, and
events outside FoW
,” Patrick told us.

“Regardless of whether the MCO will be extended past March 31, we will be launching our digital platform in early April.”

Editor’s Note: Patrick’s statement was given before the announcement on March 25 about the MCO’s extension until April 14.

Some of the solutions they plan to offer on it include home and vehicle sterilising solutions, immune-boosting superfoods, and supplements.

For Superdough, Ka Wai
shared that they’re in the process of applying for a bank loan through the government’s
stimulus package
to support their cash flow in case the MCO gets extended.

Bottom Line: It’s interesting to see how these businesses are handling the MCO, and it seems that technology has definitely played a major role in helping them. While they still function in brick & mortar, the MCO has certainly forced them to advance the digital sides of their business ventures, which may or may not become permanent features if they work out well.

  • You can read more about other Malaysian startups here.

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