No one could have prepared for the COVID-19 outbreak. Period.
Most business continuity plans fell flat in the first week of lockdown. Not even the Great recession could have prepped us for this global pandemic, that was completely out of the books.
Now, it is absolutely important to come up with a lifeboat strategy for your business. Ready to know how you can go from surviving to thriving in these times? Let’s dive in.
How does this pandemic affect businesses at different levels?
Well, there’s only one straight answer to this – re-prioritisation of needs.
And nothing explains this better than Maslow’s hierarchy of needs. The businesses that will show resilience in these trying times are the ones that fulfill the most basic human needs & that of safety & security.
Surely you would be happy with a stocked up pantry and a safe stay at your home rather than an international trip or a fancy spa treatment for this year’s anniversary.
The shift to normalcy & the immediate revenue impact that every business is bound to see will depend on the basic needs that they serve. Adding on, the pace at which these businesses bounce back will also differ a great deal from the Great Recession. And one of the key factors driving this will be the change in consumer spend, sparked by the fear of the pandemic.
There are businesses that will see a surge during these times – like your local grocery shop, digital payments & essential commodities. And then, there are other industries like travel, hospitality, event management, aviation & real estate – that are bound to be highly impacted. Some have already come to a grinding halt.
Few businesses will even see a complete shift in consumption patterns. For example, we are already seeing a wider adoption of online stores for essential commodities retail & online learning.
Is your business ready for the shift?
This question is all that matters right now. Every business needs to alter its Business Continuity Plan & rein in the ‘new normal’.
A temporary or permanent pivot from your core business & reinventing a new business model is the need for the challenging times that lie ahead. With everyone buying essentials online, if you own a retail store, this is the time to take your business online & set up a delivery facility.
Now, this might sound like an unrealistic goal to set out for, on your own. The only way is to collaborate with other businesses, leverage their talents & expertise to not only uplift your own business but to also help other struggling businesses out there.
The only thing on everyone’s mind – Runway
Runway is the period upto which your business can stay afloat with your cash reserves. Now, with the economic crisis around, it is vital to plan for a minimum of 12 month survival period for your business. This would revolve around evaluating your available cash resources on the grounds of the most conservative cash inflow that you could expect in the next 12 months.
Business decisions that are the need of the hour
Let’s have a look at some of the other decisions that you should be taking to boost your business runway:
(1) Prioritise collections
Do whatever it takes to keep that steady cash flow coming in. If discounts do the trick for the business, go for it. Profits can take a back seat for now. It is highly critical that you maintain your receivables.
(2) Build new revenue streams
It’s time to take a seat back & reassess your core assets & revenue streams to a T. For example, you can fuel up your amazing engineering team to execute some kick-ass independent projects on their own. Already own a delivery fleet? Share them with businesses that are struggling with last-mile delivery of essential items.
(3) Mindful spends
All discretionary spends need to be put to a stop right away. Surely the new store in your dream city can wait for now. Instead, you should focus on renegotiating rentals for the existing 3 stores. Another factor that needs careful planning – inventory. Avoid spending on any non-moving stocks in the current Covid-19 situation.
(4) Be on the lookout for additional capital sources
It’s necessary to be on top of any financial aids that are announced by the government to uplift SMEs, MSMEs & startups to battle COVID-19. You know you can get your hands on new credit lines from banks & other financial institutions, right? Not just that, to survive the ‘new normal’ equity infusion is a great option if you tap into the right channels.
(5) Don’t lose out on your employees
There’d be tons of people who’d advocate firing your employees as one of the go-to cost-cutting measures. I strongly believe in just the opposite of this. You cannot bounce back in the ‘new normal’ conditions without the strength & support of your team.
If needed, go ahead & have a joint discussion on minimum pay & promise ESOPs post the COVID-19 times. Rather than letting go of your employees, find projects where their skill-sets can be put to use with sufficient earnings.
We are in this together
The only way out to win the war against COVID-19 is for businesses to have each other’s back. It’s vital that businesses of all shapes & sizes, be it Startups, SMEs & local businesses come together.
Think you have an amazing bunch of engineers, marketers etc.? Now’s the time to join hands with the local shops to fulfill the most basic needs of your customers.
The only smart way to boost your business runway is to stand together as a community. Let’s embrace this chaos & come out thriving.