As a business owner, it is important in this time of uncertainty to stay calm and find light. If you are fortunate to be able to help, help other people. If you need help, do not be afraid to ask for help. Coronavirus is a people virus that does not discriminate and affects all of us, therefore people need to help people and realise that it’s not about them. Finding positives is key as business owners, human beings and advisors. Anxiety feeds anxiety. Fear feeds fear.
If you are a business owner that employs staff, you are responsible for the wellbeing of not only the individual that you employ but also inadvertently the wellbeing of their family and household. If this hasn’t dawned on you before then I’m sure it is now.
What can we do:
- REACT NOW: This doesn’t need to be perfect, but you need to take immediate and important action to protect the safety of your employees and keep your business alive. Some of these are:
- determine a plan for your staff to keep working while abiding by government guidelines and social distancing
- determine the measures that need to be taken for your business to practice good hygiene to reduce the risk of spreading the virus to staff and customers
- communicate the first two dot points above effectively
- prepare financial forecasts with ‘what if’ scenarios and a worst-case scenario to determine how much cash flow you will need to survive. If you aren’t able do this yourself, speak to your advisor
- based on your financial forecast, determine ways you can spread the cash burden and conserve cash, some ideas are:
- speak to your bank to see if you can have support on reduced or deferred repayments for a period of time. It is important to understand the short and long term impacts of taking this on, speak with your bank and ask how this option might affect you or your business in the future
- speak to your landlord to see if you can have some assistance with rental payments
- speak to your advisor about the government stimulus packages on offer and also determine with the ATO if any tax liability payments can be delayed or paid off over a period of time
- determine any other large fixed costs that will not stop if you have zero revenue and seek assistance from the supplier. Remember the suppliers are in a tight spot as well so it’s important to be understanding if they can’t help.
- KEEP GENERATING REVENUE (KEEP YOUR BUSINESS ALIVE): Do whatever you can to keep your business alive through the coming days, weeks and months ahead. If your business can adapt to these challenges you will be a stronger business at the other end of these difficult times. By reacting now, you stand to be in the best possible position to weather the storm. An important thing to remember is that how your business behaves now will be remembered in the future when all is calm.
Here are some examples we have seen when speaking with clients and businesses over the week:
A finance team that has made the decision early to have 50% of the team work from home:
- The evaluation of who is most appropriate to work from home was based on the risk to the employee and their family, who drove to work and who used public transport
- They didn’t have enough laptops, so they packed up the desktop computer and sent that home with the employee. Dual screens and the box with keyboard, mouse and all of the cables.
- Remote access tools were tested from the office before they went home, so problems could be quickly sorted from the office rather than over the phone
- The employees working from home also took their office chairs with them as working from the couch wouldn’t help them remain productive for long
- Microsoft Teams was installed (and tested) for internal communications and Skype for Business for external communications (could be other remote working software such as Zoom, GoToMeeting, Hangouts etc
- Business critical processes were reviewed and people trained as backups to do that process (payroll in this case). The process was roughly and quickly documented (pen and paper!) to be able to refer to by a 3rd backup person.
- Mangers communicated clearly and empathically to staff on what was happening, including that not all answers were known, but assured staff they were working on the issues.
- Stayed in touch regularly using the remote working tools to ensure the team still was a team. Eating lunch together virtually.
A manufacturing firm that has:
- Split shifts with time in between shift changes to help with the ’social distancing’.
- Hand sanitizers not only near time clocks and around machinery panels, but in walkways so people can ‘pump and go’ as they move between factory areas as they perform their normal day to day tasks
A professional services business that:
- Introduced a no public transport policy in conjunction with work from home.
- Spoke to their landlord for temporary rent payment relief
- Rather than cancel external meetings, contacted a client and changed it to video conference
- Had their sales team proactively call all customers to keep communication going
Cafes that have
- Changed payments to totally contactless
- Changed their product offering to take away coffees, and sealed packaged sandwiches and cakes that customers can ‘buy and leave’ quickly
A construction industry business that
- Prepared several very quick financial models to ‘what if’ analyse (without overanalysing) 3 scenarios enabling them to make better decisions based on facts rather than emotion
- Kept their people focused; still allowing discussion and addressing issues, but then carrying on business as normal. After all, customers still needed them.
You will notice in the examples above, a lot of the actions focus on protecting the health, well-being and trust of staff members and customers. This is extremely important: without staff and customers, we don’t generate revenue.
The examples also show a focus on keeping revenue coming into the business and reducing cash going out of the business. If your business is affected at this time, we don’t need to make record profits or any profits at all but we do need to keep money coming into the bank to pay the bills, staff and keep the business alive.
Whilst the above suggestions and examples are based on situations and measures we have seen implemented this week, we acknowledge that there is no perfect solution for any one business with much changing each day. It’s important to note that the suggestions are general and some may require discussion to determine whether there are any potential adverse consequences in the future for your business. Please call to discuss if you need any help or guidance in measures you can take for your business
Please remember at this time to maintain optimism, respond to facts not opinions and ask for help when needed. Speak to your accountants and business advisors, they are there to walk through this with you.