Businesses in virtually every industry are seeing financial and operational effects on their company because of the global coronavirus (COVID-19) pandemic.
From global corporations to local nonprofits (and every type of business in between), businesses everywhere are feeling widespread impact and uncertainty when it comes to what’s happening around the globe—and down the street. And unfortunately, it seems as though we’re only seeing the beginning of impact within the United States. Consumer activity and corporate operations will likely be significantly altered by a ripple effect for months to come.
Even amidst uncertainty, we encourage businesses to avoid adopting a doomsday mentality and opt for making strategic and informed decisions that can support their company, their customers and their employees in a time of crisis. Below, we’ve outlined some things to consider in order to foster a strategic mindset that’s based on facts—not fear—to guide your business in the immediate future.
Review or Document Your Business’s Disaster Recovery or Continuity Plan
Each business needs a disaster recovery plan or business continuity plan. Though the specifics of plans will vary depending on your company’s industry and operations, each business should specifically consider your insurance, communication plan and technology situation.
In global cases like the COVID-19 pandemic, it’s important to also think even farther down your company’s supply chain to consider your critical vendors’ processes as well, how they may be impacted (or have been impacted) and what those ramifications may mean for your business.
Businesses that produce and sell goods should identify your critical products and procedures that may be affected in the global supply chain. Businesses that provide services should consider how their interaction with their customers and consumer demand might change.
If your business hasn’t created a disaster or continuity plan, the first step is to document it and communicate it with your employees. If your business does have a disaster plan, now is the time to review it, refresh your employees about what it may mean for them in light of COVID-19 and prepare to act on what you’ve set forth.
Support Your People
Despite concerns about business uncertainty, profit and sustainability, businesses should acutely consider the personal and human-centric impact this pandemic is having on people across the globe. All businesses should particularly consider the impact on their own employees and what factors are at play from a human capital perspective.
Consider what long-term, work-from-home options may look like for your business and your team. Depending on your operations, you may even need to consider which of your employees are crucially essential to sustaining your business in times of disaster so that you can make informed decisions about their interactions with your business and workplace. Evaluate your sick leave and paid-time-off policies to consider how your people will respond, and if they will feel compelled to come to work even if they or a family member are ill.
Once you’ve identified what remote work might look like for your team, it’s important to test it early, especially if it’s a new concept for your company, so that you can confidently make agile technology decisions.
Thanks to today’s technology, most businesses can make connections within their team, regardless of location, without physical contact. In stressful times for companies, it’s important to remember that your team members and customers are likely feeling a personal burden and stress in response to COVID-19 as well. Connect with your team personally and communicate about how you may address concerns in order to decrease fear and stress within your team.
Consider Cash Flow
It’s always important to know and understand your business’s numbers. In times of economic uncertainty such as these, it becomes increasingly important to have confidence in the timeliness and accuracy of your financial data.
Businesses should ideally understand the profitability of each of their products or services so they can make informed decisions about the future of their business in a crisis situation—in the days to come and into the future. Knowing where your business stands now, and has stood in the past, can help you craft the most effective strategies for the future.
While sustaining profitability and buoying sales is vitally important, it is even more important to consider the ramifications of your business’s cash flow as well. In times of distress, whether it’s in response to COVID-19, a natural disaster or otherwise, businesses should shift their mindsets to consider more of what their balance sheet indicates, as opposed to only considering the numbers on their profit and loss statements. For example, businesses should evaluate the effects on their cash flow if their customers delay making timely payments and the effects of fluctuating inventory levels.
Businesses should develop a plan to educate their leaders, understand their specific financial situation and project their needs into the future when it comes to maintaining cash flow in times of distress. Understanding these concepts will afford business leaders with the ability to make confident business decisions that are rooted in accurate data.
Connect with Your Advisors
Consult the vendors and professional advisors who you trust to give insight to your business, especially if your business is struggling with how to prepare and react to COVID-19. In today’s rapidly-changing environment, many business leaders are faced with making hard decisions quickly, so it’s important to seek guidance ahead of time and gain outside perspectives about how your company should respond and react.
The more prepared and informed you are, the stronger your business can be.