The novel Coronavirus has and is continuing to hurt businesses in many ways. Most governments in developed nations have been at the forefront of developing fiscal measures to cushion businesses and individuals during these tough economic times. In developing countries, however, most governments run on fiscal deficits, and taking drastic fiscal measures to cushion businesses may not be an option for such nations. Despite any fiscal measures put in place by the government, businesses can take a couple of steps to try and cushion the blow of the hard economic times. Some of the ways in which businesses can adopt to cope with the tough economy include;
- Protecting their Cash Flow
Cash flow is the life of any business, it allows businesses to cater to their short term obligations without having to disrupt core functions. Although policies such as employees working from home may save businesses some expenses in terms of utility payments, flat rate expenses such as office rent still need to be paid regardless of any decline in business revenues. During a pandemic, therefore, businesses should endeavor to preserve as much cash flow as possible. To increase cash flows, businesses can take measures such as encouraging prompt payment by customers by sending overdue notices or offering slight discounts for customers who clear their payments promptly. One can also negotiate with suppliers for extended credit terms allowing you to keep the money in your cash flow pipeline longer. In the event that expenses may exceed the expected revenues, businesses can negotiate with banks to give concessionary loans at low rates as well as provide moratoriums on loans that are already due. Any capital spending plans that were underway must be put on hold where possible to conserve any cash in the short run.
- Switch to Online Sales Strategy
During a pandemic such as the COVID-19, person-to-person and bricks-and-mortar retail is often severely restricted with most employers allowing their employees to work remotely in a bid to stop the spread of the virus. Working from home may however prove difficult for businesses in the service industry as most employees in this industry need to physically be present to offer their services. Businesses can, therefore, take the pandemic as an opportunity to develop their online sales strategy. For employees involved in sales and customer service, companies may ensure continuity of businesses by creating online platforms where customers can still interact with the employees virtually and get clarification on anything they may need while still maintaining social distancing. During this period, businesses can take the opportunity to improve their online presence through marketing and offering great customer care services through such platforms.
- Having a Business Continuity Plan (BCP)
Most businesses often collapse during a pandemic due to the lack of a long term plan. As much as businesses need to survive during this period, it is also equally important to ensure that you lay the groundwork for business continuity after the pandemic. A business continuity plan (BCP) is a plan that outlines the necessary steps a business should take in case of a crisis. With the Coronavirus affecting all businesses in the world either directly or indirectly, BCPs will come in handy in ensuring that the firms withstand the tough economic times. Businesses need to outline all the risks they may face and how they will affect their operations. Coronavirus has affected the global supply chain leading to loss of revenue, and consequentially reducing profitability. During a pandemic, businesses should also assign some non-essential personnel to clean up any system errors that have been in the business. This would be the appropriate time to correct any underlying issues with business systems to ensure that once the crisis is over, the business can bounce back and offer its clients exceptional services.
- Develop a Hands-on Approach to the Business
During times of a pandemic, the executive members of any business or company need to constantly keep in touch with the business model. It is of great importance to keep an eye on the performance of the different services offered to focus any marketing strategy on services generating the most revenue. The management of any company or business should also develop a succession plan in case an essential employee falls ill. They also need to ensure that the employees remain all-rounded and can handle any function if a colleague may need to take time off to recover.
- Communicate Transparently with Customers and Employees
In a crisis, it is hard to find clarity but businesses must be able to communicate openly to both employees and customers. A good way to give employees clarity is, to be frank about the situation and explain what new strategies have been put in place to ensure continuity of services during the crisis period. Employers could also source for ideas from their employees who are in touch with customers on how best to position the business to ensure continuity and prosperity even after the crisis. Employers should also communicate the business plan openly to customers to avoid panic. Creating such an open communication line with employees and customers will prove to be an asset to any business since both employees and customers will remain loyal to the business once the pandemic clears off.
The five ways explained above can be useful to business owners who had not prepared for a pandemic or an economic crisis well in advance since they are slight measures one can take to ensure survival and continuity. Preparing for a crisis or a pandemic well in advance is often the ideal way of cushioning businesses through the tough economic times and where possible business owners are often encouraged to set aside emergency funds that can be used to cushion their business during any future pandemic or crisis.