Dealing with COVID-19 as Privately Owned Business
As we all know, the Covid-19 pandemic is a very serious threat to the health and wellbeing of people throughout the world. The spread of the virus, as well as efforts to contain it, are now significantly impacting our daily lives. The priority must be to take all actions required to mitigate the effect of the pandemic and protect our people. We must also acknowledge the inevitable knock-on effect of major economic uncertainty, which hugely impacts privately owned businesses.
Operating in unknown territory, leaders of entrepreneurial and privately owned businesses must proactively deal with this crisis by focusing on their exposure to risk, their interdependence and their eligibility to receive government support.
Government & Funding policy supports
Fearful of a global slowdown, policymakers have been quick to react, however, the specific supports available will differ according to location. In the UK, for example, £330bn of business loans have been made available, while the US government – in addition to a raft of business loans – has prioritised massive bond purchases, aimed at reducing long term interest rates.
Prioritising if and how your business can benefit from government interventions, as well as newly introduced bank facilities, is key. As the landscape of government support and bank policy changes frequently, talk to someone who can help you understand how this may help your business.
- Clear communications
Voluntary or enforced isolation of teams demands clear internal communications so a remote workforce can be kept up-to-date and morale can be boosted. In the event of a prolonged shut-down, staff may need to be redeployed: you should review your staffing contracts and arrangements to ensure that management is clear on flexibility available.
Spending habits have already undergone massive change. While supermarkets, pharmacies and other businesses linked to consumer demand and the virus have experienced massive spikes, other industries – hospitality and leisure, for instance – have suffered plummeting sales.
In times like these, you will need to review cashflow projections on a weekly basis and run scenario analysis to map the potential performance and cashflow outcomes, modelling varying degrees of business interruption. This will give you the crucial information necessary for honest, useful conversations with your key stakeholders and funding providers.
- Speak to others in your ecosystem
A black swan event of this size, which impacts so many, allows us to become more open and franker in our discussions. There is a growing sense that all businesses are in this together: do not adopt a bunker mentality. If your business is exposed because of low reserves then aim to defer large outgoings, discuss your arrangements with landlords and where necessary, increase debt with lenders. If you don’t ask, you don’t get.
B2C and B2B priorities
B2C demand over the next weeks and months is difficult to predict – but given so much uncertainty it is likely that most customers will not commit to large financial outgoings or events. You need to adapt, and be able to keep adapting, projected demand for your products and services in order to stay on top of sales and contingency plans. Again, this information is critical for conversations with key stakeholders (creditors, landlords and others.)
If your business serves B2B markets, you need to establish how exposed the customer base is – the reality of events like these are that while many organisations will suffer, some stand to gain. By focusing on those who need support, you can strengthen relationships and lay the foundations for sustainable, if not immediately lucrative, sales pipelines and payment.
The full consequences of COVID-19 – for society and business at large – remain to be seen. This article is intended to help with business critical conversations and provide a level of guidance to those struggling to determine their next step.
Of course, this may only go some way in helping privately owned businesses take on the daily challenges that the pandemic is creating. If you require assistance on the matters mentioned above, get in touch using the links on the right.