2020 is a challenging year for businesses due to the COVID-19 pandemic. Not only is it affecting the lives of millions of people around the world, but it is also affecting the global economy, and locally, it will have a significant impact on small business owners as well.
As an entrepreneur, what can you do during these difficult times?
1. Develop a Business Continuity Plan for COVID-19 2020.
What is a business continuity plan? Essentially, a business continuity plan outlines processes and procedures that organizations and businesses must follow in the face of disaster. In the face of the COVID-19 pandemic, a business continuity plan will help you to:
- Protect your employees
- Minimize the risk of your store spreading the disease
- Ensure that you have contingency plans in case any of your employees are infected or quarantined
- Make alternative arrangements with your suppliers, customers, and other relevant parties so your business may continue its operations
2. Identify and list the possible impacts of COVID-19 on your business.
Discuss with your staff, key suppliers, employees, and other relevant parties what the likely impact of COVID-19 will be on your business. The impacts on a business will most likely be significant in the following areas:
- Finance, particularly if you have low cash reserves.
- Supply chains, particularly if you depend on suppliers from badly-impacted parts of the world.
- Staff availability, particularly since people will be subjected to movement and travel restrictions and lockdowns.
- Sales, particularly if you have little to no online presence.
If your business is already affected, start by identifying and listing what those impacts are. If your business hasn’t been affected yet, you should still make some informed forecasts. In identifying and listing those possible impacts, attempt to quantify what those impacts will have on your business and identify possible strategies to mitigate them.
3. Perform a financial health check on your business.
Perform a comprehensive financial health check on your business. Knowing the financial health of your business is crucial to help you determine what you can and must do now to place your business in the best position possible to navigate the COVID-19 pandemic.
Here are some things that you can do to check the financial health of your business:
- Use financial ratios (i.e. profitability: gross profit ÷ total sales, liquidity: current assets ÷ current liabilities, etc.)
- Take stock of your sales pipeline
- Carefully review your cash flow
- Review your debts
4. Establish a work from home option.
With numerous people already working from home, there are a lot of tools business owners can use so that teams can keep working and stay in touch even if they aren’t in the same place. Establish and implement a work from home policy that covers when you expect your team to be available or online, how to communicate (i.e. via email, video calls, etc.), and what deliverables each team member is in charge of completing.
5. Communicate and be transparent with your customers.
Everyone is facing this pandemic together, so be sure to communicate with your customers. Be transparent. Be as honest as possible about what your business is going through. If possible, describe what challenges you are facing and what steps you are taking to mitigate the risks, while still doing your best to meet their needs. As long as you communicate with them properly, your customers can empathize with your business as you face this crisis.
Though China and other economies are already beginning to recover, the spread of the COVID-19 pandemic is still ongoing throughout the rest of the world. It has created a global ripple effect that will impact our lives for quite some time.
Reports show that 27% of businesses expect COVID-19 to have a moderate to high impact on their revenue, while another 30% expect the pandemic to have a moderate to high impact on their supply chain.
Make sure to keep these tips for business success in mind to keep your business out of the red amid this pandemic. It might be a while until your business gets back to business as usual, but it will happen. In the meantime, stay safe and healthy!