220px-2019-nCoV-CDC-23312_without_backgroundIt’s very early days since the new measures of protection were introduced by Boris Johnson and the team on Monday evening. Social isolation, no non-essential travel and not visiting events or hospitality venues all have had a massive impact on the business community.

At this very early stage I am profiling three types of business position in terms of impact of CV-19 and the measures of our defence.

 

  1. Businesses that have seen an immediate downturn in demand. In many cases revenue has fallen 60% or more with orders being cancelled with immediate effect. These businesses have immediate concerns about cashflow and survival. You might think this is the in gig or hospitality sector but the effect is much broader than that.
  2. Business that are not facing an immediate concern with demand, but are aware that may happen. The more pressing concerns are one of practicality in terms of continued business operation. Colleagues working from home, illness, IT infrastructure etc.
  3. The third type is less known but I am convinced they exist and these are businesses where the leadership are putting heads in the sand hoping things continue as usual.

If you’re seeing something else please comment below.

So what to do?

Let’s start with businesses in category 1.

Here there is a simple 6 point plan in my view.

1. Don’t panic. If you are running a successful business you are likely it’s greatest asset. 

2. If you’re seeing a downturn in demand already produce 3 revenue forecasts. A best case, worst case and most likely case. This should give you three possible monthly incomes assuming nothing else changes. Do this for a maximum of next 6 months

3. Look at your existing monthly spend. Eliminate non-essential expenditure and then get a monthly on-going spend figure without taking any drastic action. If you have included any tax / VAT payments remove them for now. Likewise max 6 month period

4. Evaluate if there is anything you can do to increase you’re revenues by either pulling forward business from later in the year or winning new clients in less effected sectors. If cash is a concern DO NOT offer to do work for extended payment terms but you could offer to reduce rates

5. Review Government support websites. Here’s a good place to start. It is incredibly likely you can access cash very shortly via one or more of these schemes.

Screenshot 2020-03-18 at 10.20.42

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19

6. Reach out to professionals. Your accountant, your tax advisor, your bank manager and talk. Reach out to me. If you have the above information in place I will walk you through some actions and options you may have and recommend others that can help where needed.

scenario-and-contingency-planning-819x400Businesses in Category 2

Planning and Communication is key. There are five key areas you should be considering.

 

  1. Health and Safety. How can you business look after your staff, minimise risks of infection and cross contamination from visitors or to customers?
  2. HR. Planning for changes in colleagues working practices and roles. Cross skilling and considering mental health impacts and more.
  3. IT. Implementing technology to support working remotely if you haven’t already. testing it to make sure it works before its needed.
  4. Management. Scenario planning and risk mitigation. planning the ‘what do we do if….’ in terms of capacity reduction, demand reduction
  5. Communication. Internally and externally. Key messages to clients, colleagues and supply chain are key at time like this.
  6. Finance. Making sure you know what support is available and how to access it as and when needed, before it is actually needed.

Thinking about these in advance will keep you ahead of the curve if you aren’t already as well as making staff, customer and other stakeholders have confidence which is key.

I’ve put in a panel I place that can support this process either collectively or as individuals.

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A team that can support planning and manage risks

If your business is part of a network such as Inspire, a Chamber of Commerce or a LEP reach out to your contact there. Business support organisations are all rallying behind their members needs and getting in contact sooner rather than later would be my suggestion.

If you’re a business in Category 3…. 

 

Get yourself into category 2 quickly. I can’t think of a business type that will not be affected by this situation. It is a question of when you see the impact, not if. If it’s not today then make the most and plan for possible impacts. Not discussing and not planning is really not an option.

Published by Ashley Hutchinson, A&S Business Consultants on March 18th 2020.

Useful Links:

http://asbusinessconsultants.uk/coronavirus/

http://asbusinessconsultants.uk/coronavirus-statement/