Updated: Jul 31, 2021
The Coronavirus (COVID-19) outbreak is affecting businesses of all sizes on a massive scale. As the pandemic continues to spread around the world, factories are closing down; the supply chain is disrupted, and financial markets are facing unprecedented volatility. The outbreak is posing a challenge to nearly all businesses from commerce and digital media to manufacturing and banking. As the world continues to fight this novel virus, business owners have to take precautionary measures to protect their businesses. We’ve put together some of the practical tips that will help you protect your business during this pandemic.
1. Focus on employee health and wellbeing Employees are a business’s greatest asset, so protecting them from this deadly virus should be your top priority. According to the Centers for Disease Control (CDC), sanitizing your business is one of the effective ways to control the spread of COVID-19. To ensure your business is clean, consider stocking up the workplace with soap, hand sanitizer, and disinfectants. Also, encourage employees to wash their hands and disinfect their desks regularly. If possible, establish a work from home policy to minimize face-to-face interactions.
2. Plan for staffing changes With the economic slowdown the world is experiencing and other inevitable changes, businesses should have a solid plan for staffing changes. Consider hiring professional services firms or contractors as backup for sick employees or those caring for their loved ones. If there is a need to reduce staff hours, it’s advisable to create schedules that will ensure coverage for your business while minimizing the financial impact on employees.
3. Protect/manage your cash flow Maintaining consistent cash flow during this challenging time is the best way to protect the financial health of your business. To achieve a consistent cash flow, you’ll need to assure your customers and suppliers that you’re taking the necessary steps to provide service in a safe environment. Focus on your breakeven point by reviewing your fixed costs and variable costs for all of your items/services. Send your invoices and collect on your receivables. You’ll also have to evaluate your liquidity levels and ensure you have adequate financial resources to protect your business.
4. Identify ways to cut back expenses The best way for businesses to continue thriving in this challenging time is to find ways to reduce expenses. You can start by reducing paper use, adopting energy-saving measures, and reducing supply expenses. Contact your suppliers and let them know that you’re price shopping and opt for vendors with great discounts. Another effective way to reduce expenses is to harness virtual technology to minimize travel expenses and eliminate the need for physical space.
5. Forecast and budget the future Forecasting and budgeting allow a business to predict its financial future and plan accordingly. Gather your financial statements and project your income, cash flow, balance, and expenses. Decide whether you’ll use your financial history to plot the future or you’ll use research-based forecasting. Complete the process by preparing pro forma statements. If you’re unable to meet your debt obligations due to the economic slowdown caused by the COVID-19 outbreak, you may want to consider negotiating with your creditors for forbearance until you have the capacity to continue repaying your debt.