Due to the pandemic and social distancing, businesses are either closed or adopting the new normal. No matter what business you belong to, survival is the ultimate key. You have to preserve your business until the lockdown lifts. It is a unique and challenging time for everyone, including business owners, workers, suppliers, and customers. It is essential to understand the problems, look for viable alternatives, and implement them practically to survive in this challenging period. So, here is a quick reference to some insights to tackle this unprecedented time and situation.
Survival strategies for businesses in COVID-19 lockdown by Robert Trosten
There is no specific prediction about when the pandemic will pass. While some are skeptical about the future of the business, others believe that planning and preparedness can take them to the other side in the long run. The plan can be for three to eighteen months based on the nature of the business and tenure of economic recovery. You can make a rough estimate of the continuation of the pandemic to devise your strategy. According to some people, a crisis can stay for three months. After this, you can stop hiring, marketing, and travel expenses with immediate effect.
However, if it takes six months, you will need to relook into your strategy and pay more attention to the essentials. You can emphasize online sales, renegotiate rent, salaries, equipment rentals, and so on. In case the situation stays the same for over one year, your focus should shift to survival. If you are a developing company, you will need to be more careful. Everything will require revisiting, right from revenue goals, production deadlines, and operations. No matter what decisions the management takes, you have to be transparent with employees and investors.
One of the first things to get the worst hit is your revenue. Hence, you have to keep an eye on all types of expenses – fixed and variable. It will help you understand the position of your company and design a strategy for it. You can continue this practice even when the Coronavirus days are over. It will help you be on your guard and prevent your business from an unexpected downfall. Since it is an uncertain time, you have to take a good look at your business model for its feasibility. Maintain your financial metrics and bandwidth so that your business remains afloat. Just make sure you don’t lose sight of any potential bad debt, credits, revenue earning, and new sales.
The leading financial advisor Robert Trosten believes every business runs on capital, and in this crisis, the main challenge can be sourcing the funds. While some companies can have sufficient liquidity at their disposal to operate for the coming years, others can find it difficult to manage. Right now, venture capital and other funding may not be available. Investors may also be extremely cautious with their funding habits, and many like to wait before infusing investments. In essence, they can put a stringent diligence process to release money. If you take a look at the historical records, you will realize that economy rebounds after the crisis is over.
However, if you still need it, you can ask your existing investors for an additional amount to ensure you can run your business without any hassle. You can expect them to help you because they already know you and your business model. Anyway, in this lockdown phase, you have to patiently wait for the storm to pass and travel past it smoothly.
It is an unequivocally rough time for everyone. As a business owner or stakeholder, you have to make sure you don’t leave your customers clueless or helpless as they are the driving force behind growth and sustenance. So, you have to maintain the highest level of transparency and inform them of the developments from time to time. If you are clear in your messaging, your customers can feel empathetic for you and understand your issues.
Partners and vendors
When business is closed or partially operational, it can be difficult to pay suppliers and vendors for you. Since everyone is going through a rough patch, you need to give all of them and other partners sufficient notice to arrange for their resources. It is critical to building a healthy and trustworthy ecosystem even more during the crisis.
If you are a large company, you may have to make many bitter decisions about the workforce. For instance, you may have to lay off or cut their wages. Or, you can also furlough some as a cost-cutting measure. No matter what decision you make, you should be compassionate. Don’t forget to check government directives around such actions. Also, if you can compensate extra, you should make an effort. When you follow this cost-cutting measure, make sure to implement it at one go rather than doing it phase-wise. It can be extremely stressful for your people.
You are a team leader, and in difficult times, teams look up to their leaders for guidance. You have to engage all the groups and ensure productivity. Due to lockdown, many of them can be having mental health issues. You have to infuse confidence in them so that their morale remains high. For this, you need to interact and collaborate with them more through any virtual platform, such as Google DUO, Zoom, Skype, etc.
Whether a crisis results from economic turbulence or pandemics, every business has first to ensure its survival. Standing united with team members, stakeholders, partners, and others helps create a more profound and trustworthy environment where everyone can thrive once normalcy returns. So, use this time to be more thoughtful about your measures. Once everything resumes, normalcy will also creep in. However, until then, you need to practice patience, planning, and thoughtfulness. Also, try to be as agile as possible. Agility can bestow you with flexibility, due to which you can adjust to the new situations well.
Hence, the primary survival strategy for your business at this time has to be staying afloat. Look for means and avenues that can make this possible for you.