Coronavirus has impacted virtually every business, and many would have been significantly underprepared. It’s essential owners put in place plans to cope with future disruption, says Penelope Rance.
The situation many small businesses now find themselves in is unprecedented, but that doesn’t mean it won’t happen again. Business owners need to enhance their continuity planning to ride out any future waves of lockdown, and keep trading in a responsible way.
“Covid-19 will impact us in multiple waves and ways,” says Rob Walker, founder of business optimisation firm Green Robin. “Any business that doesn’t have a business continuity plan (BCP) should prioritise putting one in place; and those that have one and have enacted it should perform a ‘lessons learned’ session. Most small businesses won’t have ‘pandemic’ in their BCP, so the plan needs to be updated.”
Scenario-based planning will help SMEs flex operations and finances as the pandemic plays out, says Gareth Jones, partner and Global Head of Privately Owned Business at Mazars. “Measures should be drawn from four areas: ensuring the business has sufficient profit levels and cash flows to continue day to day; keeping commercial relationships going; asking stakeholders if and when they need additional co-operation; and re-forecasting the financials and tracking performance.”
Central to futureproofing a business against further lockdowns is the welfare of staff, customers and suppliers on your premises. “This could include cleaning and disinfection practices, installing low-touch doors and switches, and access and delivery control measures,” says Dr Sandra Bell, founder and CEO of the Business Resilience Company.
“Check HVAC, fire and safety systems before the workplace is reopened, and carry out a deep clean. Institute a clean-desk policy, so workers do not share equipment.”
Facilitate home working, stagger arrival and departure times, and specify workstations. “Shared occupancy of small rooms and in-person meetings should be discouraged,” advises Ms Bell.
If possible, ensure cash flow is robust enough to cope with prolonged lockdown. “Most businesses have seen a fall in sales,” says Mr Jones. “Estimate the reduction and plan to deal with decreased profit or loss-making. Most businesses will have already entered cost-reduction mode, and should also explore the relevant Government-backed support.”
Some businesses will need to find new ways of working. “A proactive measure is pivoting to respond to the crisis,” says Mr Jones. “We’ve seen restaurants become delivery services, security businesses move into the delivery space, and GPs offer remote appointments.”
Identify clients and contracts that will not expose staff to risk. “Small businesses should not assume customers will stop buying,” adds Mr Jones. “Speak regularly with clients to understand their current demands and needs. Then plan how the flow of sales can be delivered.”
Contracts that can be delivered remotely are less likely to endanger employees. “Organisations are finding innovative ways to deliver services that are normally face-to-face,” says Ms Bell. “The world has had a crash course in social media and collaboration tools, and online creativity has become the norm.”
Moving online and employing more virtual services could provide access to new customers, as well as allowing SMEs to continue trading. “Taking a business online usually involves months of deliberation,” advises Riki Neill, Director of RNN Communications.
“We’re not in normal times – if you have an offering that can translate to online, do it now.”
Not everything can be done virtually, and issues with shipping goods and receiving stock have impacted many sectors. “Consider using a third-party logistics company that has the social distancing protocols, PPE and vehicle cleansing regimes already in place rather than your own fleet,” suggests Ms Bell.
More home working also means additional cybersecurity measures may be needed. Keep staff up to date on threats and prevention measures, advises David Perry, MD of FSB Insurance Service.
“This includes spotting phishing emails; validating requests for sensitive information or money; strengthening passwords and introducing multi-factor authentication; only activating webcams for teleconferences; and remembering GDPR responsibilities.” And, he says, put an incident response plan in place.
The lockdown also has insurance implications. “Keep essential insurances in place, such as employers’ liability insurance – a legal requirement if you employ anyone, even if they are furloughed,” says Mr Perry. “You also need to make sure you’re complying with the insurance policy conditions to keep your property protected – both your workplace and employees’ homes.”
If there is no choice but to cease trading, draw up an action plan to restart as soon, and as strongly, as possible. Mr Walker recommends an impact assessment to understand what shutting down will mean. “Is there a risk that your customers will find an alternative and not come back?” he asks. “Will ceasing trade put the business in breach of contracts?
Have those who owe money paid it, and has the business paid its creditors?”
Seek legal advice before deciding to cease trading, adds Ms Bell. “The number of companies that have been unable to pay suppliers, and thus become insolvent on a cash flow basis, has prompted the Government to introduce legislation to suspend wrongful trading provisions so directors can keep businesses going without threat of personal liability.”
Effective communication is essential. Map stakeholders to identify who you need to communicate with: employees, suppliers, customers, shareholders. Clear information should be issued to all of these parties, tailored to their perspective. “By taking control of the narrative, you are leading the communications, keeping your most important contacts updated and instilling confidence,” says Ms Neill.
Businesses that have developed an ecommerce offering or changed practices to adapt need to communicate this to their customers. “The post-pandemic business plan should include a full marketing calendar,” suggests Ms Bell.
“People need to know you are open – and if you have changed direction, they need to be introduced to the new you.”
Tell staff how they will be supported. “Employees may have been ill themselves, or lost a loved one or a colleague,” says Mr Walker. For staff affected, give them the time to process, and signpost them to support channels or financial assistance.
If a company is forced to suspend trading, the downtime should be viewed as a chance to develop a bounce-back strategy. “This crisis is an opportunity for business owners to kick the tyres and check the roadmap ahead,” says Mr Walker. “Step outside the business and to review which bits work, which don’t, and what should you be doing differently.”
Riding out the storm
Doug Johnson is founder and director of Mesh Energy, which designs low-energy solutions for the construction industry. Founded in 2015, the company has seven full-time employees, and has taken a proactive approach during the pandemic.
“We’ve taken a good, hard look at our numbers to reduce overheads and make our emergency pot as deep as possible,” he says.
“Businesses should be focusing on their people: they are our most important asset. I’ve been upfront with staff, giving presentations running through our plans, and reassuring them that we had enough reserves to keep operating.
“We’ve shifted client communications online,” he says. “We have had projects stopped or delayed, but a number are carrying on. Our mindset is how we can help clients get through this period.”
Staff skills are also paying off. “We have developed a shared pool of talent, with at least two people who have the same expertise,” he says.
“We have one staff member on furlough, and she is spending the time on essential education. We also applied to the Coronavirus Business Interruption Loan Scheme. The loan will give us a cushion to continue working through any future lockdowns.
“This situation has shown that our business model works, and we are going to maintain many aspects of it,” he adds. “The whole world has become accustomed to using online collaboration tools, and I hope we take that forward with us.”