COVID-19: How Businesses Can Weather The Economic Storm And Come Out Stronger
Businesses that navigate disruptions better often succeed and come out much stronger because they focus on their core purpose with evolving customers needs in mind. Here are seven steps that businesses of all kinds can take during the COVID-19 pandemic, particularly as customers’ changing preferences are not likely to go back to pre-outbreak norms. These are only guidelines and by no means exhaustive or detailed enough to substitute for a thorough analysis of a company’s particular situation.
The COVID-19 crisis has been emotionally challenging, changing day-to-day life in unprecedented ways for individuals and businesses alike.
Many jurisdictions have mandated working from home to reduce the spread of COVID-19. Technologies such as Zoom, Slack, Microsoft Teams enables employees to work remotely. Where the nature of work necessitates working at a business location, make changes to your processes to ensure physical distancing guidelines.
Set up processes for employees to express if they are feeling unsafe at work for any reason, as well as monitoring adherence to updated policies.
2. Demonstrate purpose with social responsibility
In times like these, go back to the business’ core purpose and figure out how to serve existing customers and develop new offerings while supporting community response efforts. In doing so, consider whether your business needs a tweak or a complete pivot.
For example, many apparel companies are shifting production to create medical masks and clothing; others such as engineering and devices are transforming to produce ventilators and other medical devices.
Customers will remember businesses that provide solutions to their problems during times of social change. Social responsibility, therefore, ought to be part of the purpose and in times like these consider turning up the social purpose over just profit.
3. Reimagine the business model
Digital revolution has already been disrupting business models, but COVID-19 is fast tracking it.
While consumer demand is down, it has not disappeared. People have dramatically shifted toward online shopping for all types of goods, including food and groceries. Businesses should invest in online distribution and reconceive their supply chains accordingly.
For service providers, moving to a remote service delivery model using technology provides a unique opportunity to expand their geographical reach as more and more customers will be willing to access talent and expertise through remote service providers.
The Canadian government has put in place several measures to assist businesses weather the economic impact of COVID-19. These measures are primarily designed to help with cash flow and liquidity crunch. For details on such measures and how to apply, please refer to Canada government website.
5. Optimize costs; use zero-based budgeting
Have a line-by-line review of all costs. The focus must be on which cost items are essential for business continuation during the short-term while establishing a structure to anticipated demands of the future once the pandemic is over. Such a cost structure review is best practice during normal times, but a crisis like COVID-19 brings further clarity and sense of urgency.
Make zero-based budgeting process part of your business’ DNA to be better prepared the next time a crisis like this comes along so it doesn’t jeopardize survival and profitability om short- and long-term.
Businesses need to define scenarios tailored to their specific situations, identifying variables that affect revenues and costs. Businesses should model their financials (particularly cash flows) in each scenario and identify triggers that might significantly impair liquidity. For each such trigger, define moves to stabilize the organization in each scenario.
Your customers and suppliers also have people and businesses at risk. COVID-19 brings about an opportunity to work with them in renegotiating contracts and service levels to ensure mutual survival. Such a collaborative approach will garner respect and build an eco-system of supportive businesses for the long term.