When you run a business, the threat of insolvency is a concern that you may have even at the best of times.
And in the ongoing wake of COVID-19, it has probably jumped to the front of your mind. The pandemic has created a shockwave through the global economy, with the United States estimated to have lost $16 trillion according to a recent study conducted by Harvard economist David M. Cutler.
So, with such a dramatic impact on the larger picture, it can be an intimidating prospect to try and protect your small business at such an uncertain time. Especially if your business already had outstanding debts when the pandemic began.
Assess the threat
Here is where you can truly show some managerial and leadership skills.
Regardless of your business size, when it comes to assessing the threat that COVID-19 may have, it is important to be as broad as you possibly can. The first task may be to contact all your high-level staff to assess the risks posed; if you have an accountant, ensure that they are actively involved too. It may also be prudent to assign a member of staff to keep on top of all COVID-19 related news.
You will want to focus on the following areas; staffing, cash flow, suppliers, transportation, business associates, partners, stock-holders (if applicable), communication, shop rental prices (if applicable), and customer attraction and retention. This is a simplified list and depending on your business type, you may need to look into other areas such as delivery options to customers’ homes and even advertising.
What’s your plan B?
Having a thought through and workable back-up plan will be an invaluable asset if things should go awry.
During the assessment stage, constantly ask yourself ‘ What will we do if this happens?’ and then, list the answers and discuss it with staff.
Of course, depending on the type of business you run, this can be easily accomplished or not; for instance, hospitality has been badly impacted by social distancing. If you run a restaurant, you may want to look into the home delivery options, or allowing only so many people into your establishment at one time.
If your business is online, do not be tempted into thinking that you are immune; as many other companies switch to online sales, you will need to assess your competitors and come up with a solution to keep yourself afloat. It may be time to invest in new website design, new stock, or even an advertising campaign.
Develop new policies
OK, so if you are one of the lucky few who have been able to stay open during the pandemic due to the necessity of your business, you may need to develop some new policies.
For instance, as of yet, there is no nationwide stance on what business owners should do if one of their employees isn’t comfortable coming into work. What if they are in the high-risk group? How will you manage employees that can come into the workplace?
And if your business has customers coming into your shop, how will you maintain their safety?
This is another reason to keep in regular contact with higher-level staff and your accountant, who can assess and contribute to cost-effective and safe solutions.
If you have been able to run your business from home, then it is important to maintain contact with your staff. Perhaps, you may want to send out a daily email and conduct a weekly meeting via a computer meeting app? That way, you can answer any questions that they have while also keeping a tab on how they are performing.
Concerning customers, it is important to not over-communicate- they know that most businesses will not be operating correctly during the pandemic, so send updates on when you plan to open shop doors or information about your upcoming website. This is a great time to send out newsletters! If you run an online business, ensure that customers are aware of the delays that may come with ordering, due to restrictions around movement.
Unless the products you sell are handmade, then you will need to keep in regular communication with your suppliers or vendors. Plan ahead and prepare for the unexpected; due to restrictions on travel, it is harder to move goods from country to country in the same timespan that many grew accustomed to in 2019. Ordering in advance is a great way to bypass this issue, but it may also be a time to begin looking for the same products you sell closer to home.
Keep in touch with your accountant, your banker, your attorney, and your insurance companies at regular intervals. This will help you to assess how well your business is performing and will offer you an invaluable insight into any potential upcoming issues.