Since the onset of the coronavirus pandemic, statistics have become part of our daily life. We watch daily updates, hoping we will find ourselves on the right side of the numbers. This is patently true for businesses, large and small, who may find themselves suddenly, severely and unfairly impacted - through no fault of their own. The unfortunate reality is that some will not survive: but is there a way for a vulnerable business to beat the numbers?
We’re in this together.
As enterprise owners or leaders, our mindset in this dire situation is probably our most important resource. Entrepreneurs already have an advantage here.
The first step is to accept that we are facing a new way of life, and to find a way to embrace this. This may involve letting go of some hopes and dreams that were founded on the old reality, which will inevitably engender a sense of loss. Taking a step back and asking the following questions could lay the groundwork for turning the pain into opportunity:
- Is my business model right for this new reality?
- Can I succeed if I continue on this path?
- What is my sphere of influence?
- How pliable can I be?
Innovation is now non-negotiable, and can take infinite forms. The faster you can react the better. Some pivotal considerations could be:
- What new distribution and marketing channels can I use – or create?
- How can I take advantage of online interaction (the new default)?
- Will it make sense to partner with a similar, complementary of alternative business?
- What skills, materials, knowledge, supplies, expertise, wherewithal or specific experience can I use as a resource right now?
Safety, Safety, Safety
The primary consideration for any business at the moment should be safety. This involves several aspects:
- Staff: how can the physical and emotional wellbeing of my workforce best be served?
- Premises: what needs to be done to enable staff to work safely and productively from home or the office?
- Industry-specific regulations: what new protocols need to be in place (these are constantly being updated - see the link below)?
- Customers: how can the customers of my specific business be assured that they will be safe?
- Suppliers: how can I interact safely with my suppliers?
- Sustainability: how does my thinking, as well as my process, need to change – to give my business the best chance of survival?
- Additional policies: what is my comprehensive, detailed COVID Policy?
See the summary of workplace precautions in the block.
Raising funds via debt or equity is particularly complex at this time, given the volatile economic climate. It may be important to check:
- What options can I explore with my existing funders?
- With equity funding, what anti-dilution provisions need to be taken into account?
- How will the long-term impact of short-term debt funding play out?
- What COVID-related financial aid is available to me, and are there any options specifically for my industry? (A summary of some of the options is included in the link below.)
Read the post-webinar write up
Expense and cash flow management
Nice-to-haves are no longer an option, and efficient cash flow management is paramount. This may be an evolutionary process, and can make the business stronger in any circumstances, good or bad. When negotiating with counterparties, it is important to bear in mind that everyone is impacted by the pandemic in some way, so this is a two-way street. Discussions may include:
- Rent: would a reassessment of the terms of my lease help my cash flow?
- Bank: do I need to make any special arrangements with my bank?
- Suppliers: could suppliers who may be less affected by the current situation give me easier terms?
- Staff costs: in what ways can the workforce help in cutting employment costs? Downsizing should be the last resort. Employees may have some creative and useful solutions to offer: it may suit some to work shorter hours, for example, or some may rather “share” a job if that means staying employed.
Some additional ideas are included in the links below.
COVID-19 has happened. It has shocked every part of society and the world economy. Clichés abound on how this is an opportunity to re-set our lives. However, many practical tips are also available from a variety of sources, including some of our investee companies. A sample is offered for further reading below. One maxim is increasingly proving its worth: that we are definitely in this together, and will definitely be stronger together. Talking, sharing and collaborating must be part of the new way ahead.
WORKPLACE PRECAUTIONS AT A GLANCE
For further information, please see the following: