The following covers seven areas in your business that will be impacted by the COVID-19 pandemic, along with some strategies for mitigating its negative effects. As you read through this article, keep in mind three things:
- As you consider how you will address a particular scenario, think about whether you need to be proactive or reactive. Do you need to put programs or mechanisms in place to prevent things from happening? Or do you need to have programs or mechanisms in place to ensure you react appropriately to certain happenings?
- Think about the mission-critical functions of your business and who on your staff is responsible for seeing they continue. What are the key functions, or people, or commodities that need to be maintained for you to weather the storm?
- What are the breaking points and what will be triggered when you reach them? In other words, how will you know if and when it’s time to act?
We’ll cover seven functional areas for business continuity:
- Operations: How will your day-to-day activities be impacted and how can you adapt the way you deliver your products and services?
- Sales: How can you modify your sales processes and prepare your team so that lead and revenue generation can continue?
- Finance: What’s important to keep an eye on right now?
- Client Services: What can you do to make your business and your product or service more valuable and accommodating?
- Human Resources: How will you deal with the health and welfare of your team while still delivering for your customers?
- Marketing: How is your business being perceived by your various constituencies in this time of crisis, and what immediate changes should you be making?
- Tech: Are your systems prepared to handle big changes, and if not, what can you do now?
Let’s dive in…
The first thing to consider is the potential for significant supply chain disruption. The biggest concern here is that your business could be starved out of crucial materials. One of our newest clients is currently facing this dilemma. This business facilitates deals between overseas manufacturers and companies in the US that purchase component parts for their own manufacturing processes. They’re an established company with a stellar reputation, but most of their overseas relationships are based in China. Many of those manufacturers have been shut down due to widespread quarantines, so our client now faces challenges securing alternative manufacturing relationships, all while many other companies are doing the same.
The lesson here is that if you know you have limited options from where you source your products, you need to have a Plan B in place. Look into alternative products, from other manufacturers, possibly from other countries, that may be able to satisfy your demand. Leverage any and all relationships you may have with referral sources or others in the industry to get introductions to new manufacturing resources.
And know that if your business doesn’t purchase directly from China, it doesn’t mean your supply chain won’t be affected. Where do your suppliers or distributors get their products? This is obviously a global concern and the sooner you find those alternative sources, the better your business will be able to weather this disruption.
Besides finding alternative suppliers, look for alternative resources. Focus on building up stock on whatever resources you might need to produce the products you sell, or to complete the services you provide. For example, if you are a manufacturer of food products in the US and rely heavily on imported garlic, you should be out there right now exploring new local sources of garlic.
Just-in-time inventory processes can offer your business maximum profitability, but such processes only work if and when your whole system is running perfectly. Right now, that’s likely not to be the case. If your operational model is very linear, know that you’ll likely need to revamp your entire model to address those challenges you face tomorrow, then will revamp it again to address the challenges you will be facing next month…and next year…and beyond.
Consider the additional unexpected economic side effects that may affect you as well. For example, gas prices are falling as the Russia and Saudi Arabia oil price war continues and global travel demands decrease. Gas prices affect all of us in some way. How will gas prices impact your business?
Finally, it’s not just manufacturers who are facing these challenges. The ripple effect of this pandemic will impact every business in some way. If you’re in B2B, your clients are also being challenged. If your clients are out of business, you won’t be getting paid either, so do what you can to help you clients stay in business.
Closing new business is always challenging, even in the best of circumstances. The biggest issue your sales team will face is that prospective clients are going to be distracted. They’ll be inundated with calls and emails from employees, government officials, other service providers, and just good old-fashioned spam. So, getting their attention at this critical time will be difficult, if not impossible. Keep this in mind as your sales team settles into a new way of reaching prospects.
Businesses and consumers alike stop spending in times of uncertainty. So, it won’t be any easier to close new business when prospects are keeping a tighter grip on their purse strings. Work with your sales teams to come up with some creative ways to close business faster. Offer discounts if they close before the end of the month. Be willing to adjust your normal terms. Consider extended or delayed payments. Even when offering all of these options, be prepared for a dry spell.
Next, take steps to minimize travel or in-person exposure. Consider how your sales teams normally function. Are they out in the field? Do they conduct a lot of face to face meetings? Are they flying across the country? Be prepared to have fewer in-person meetings and look at alternatives. Zoom Video Conferencing, Cisco Webex, GoToMeeting, and others are safe, reliable platforms for staying in contact, reading body language and enabling human-to-human interaction while practicing social distancing. Make sure your salespeople do a few trial runs before using them with an actual prospect. And if the sales team is accustomed to distributing printed materials, make digital versions available for sharing via screen-share or as attachments in emails.
Lastly, It’s not all bad news. There may be silver linings in the midst of this crisis if you think creatively. Consider how your goods and services could benefit your clients, given they too are having their own COVID-19 challenges. What can you do to help your clients navigate them? Could you encourage customers to stock up on the necessary goods you supply? If you’re a business services provider, could you provide remote workplace solutions? Could you help your e-commerce customer ensure their shopping carts are functioning properly? Could you innovate new products or services today that would help your clients stay in business?
How’s your cashflow? Could it be squeezed if customers delay payments due to COVID-19 related stresses? Could credit sources be restricted if your creditors have unexpected losses? Times like these are likely to put a strain on your financial situation.
As the old saying goes, cash is king, so think about how you can get as much cash in your reserves now. As mentioned earlier, you might want to consider adjusting your terms, or offering discounts for upfront payments. If you struggle with collections, it’s time to get caught up. Can you shorten the time you allow for invoices to be paid? The goal is to have as much cash as you can and to speed up your receivables while reducing your payables.
Next, let’s consider credit. Credit sources have the potential to be restricted, particularly if your creditors experience unexpected losses. Think back to 2008, when banks went looking for money wherever they could find it and they would, in some cases, single out their financially healthier customers to recover cash. So, don’t be surprised if lines of credit are affected. You could actually be penalized for having a strong cash position or a good credit rating. Talk with your creditors, explore your options, and make sure you have a full understanding of the terms of your existing credit lines. You don’t want any surprises.
Lastly, evaluate your expenses. What can you cut or reduce? Where can you find savings? What payables could be delayed? If you have debt under favorable terms, you might consider reducing those payments. Once again, hold on to as much cash as you can, at least until this crisis passes.
What help will your clients need, and how can you become a resource to them? Some clients will be better prepared than others to deal with the change and uncertainty that a crisis like this presents. For your prepared clients, they’ll likely already have their crisis plans mapped out. Make sure you know those plans so you can adapt your own way of working with them.
Unfortunately, many of your clients will not be adequately prepared. They will be reacting in the moment and reeling from the chaos. Help them by providing perspective and a sense of calm. Make a list of the potential problems that they are likely to run into and work together to build their plan of action. Be available. Give your clients your cell phone number and invite them to contact you anytime. This is an opportunity to be more than just a vendor to your clients – be an invaluable asset.
One of our clients had spent a significant proportion of their marketing budget preparing for an annual trade show that was just cancelled. A pre-show marketing campaign was already underway, sales meeting appointments had been made, and marketing collateral was produced. In the interest of partnering with our client, we immediately helped them enact an alternative sales and marketing plan so they could mitigate their losses while maximizing opportunities to build relationships with those would-be show attendees. We’ve jumped right in there, alongside the business owners and their sales teams, to help them navigate these unprecedented circumstances. Not only does our client appreciate our partnership and expertise, our team gets great satisfaction from helping others meet these COVID-19 challenges head on.
Let’s remember that when all is said and done, COVID-19 is a human problem. Lives and livelihoods are at stake. First and foremost, consider how you will protect your team. What healthcare resources can you provide? What must you do to prepare for large numbers of your staff to become ill? What will you do if you lose a member of your staff who is responsible for a critical function that keeps your business running?
Let’s begin with what we refer to as “mass outages”, where a significant portion of your workforce is unable to come to work. Meet with your leadership and department heads now to decide what needs to happen under what circumstances. Determine the trigger point for taking action. Is it when 10% of your workforce is out? 20%? Identify those scenarios and know what you’ll do when you reach them. Make sure your leadership team knows who is responsible for making those determinations and when to put your plans into action.
Also consider “micro outages”. You likely have at least one person or team through which one key function flows. Every business has at least one of these rock stars and their value is hard to measure. This person or persons may be solely responsible for a crucial function that keeps the wheels of your business turning. Document their tasks and major responsibilities and cross-train another person (or two or ten) to complete those functions in case your rock star is out. The same holds true if you have a lot of specialization on your team. Have at least two or three people trained on that job or function.
Most importantly, consider the actual health and wellbeing of your employees and their families. Begin by providing some basic education for your employees: proper hand washing techniques, how to keep a social distance, how to recognize symptoms. Ask your health insurance provider for information about wellness services, hotlines and other benefits your plan may already provide. And examine your policies regarding sick days and PTO and make adjustments, if necessary, to accommodate extended periods of time off work due to illness.
Lastly, familiarize yourself with all available resources from your local, state, and federal governments, including the CDC. Bookmark those websites and keep yourself – and your employees – up to date on the latest news.
While these are uncertain and chaotic times, consider how your image will be affected by this crisis. Your customers and employees and their families will be looking for sources of calm in the storm, so how you handle this crisis today will affect their perception of your business after it has passed. Times of crisis are actually opportunities to build genuine relationships, so use your communication channels to show your true colors – to clients and non-clients alike.
This is also the time to review your content strategy. Messages promoting your services to leads, prospects, or active clients who are in the throes of a crisis will likely come off as insensitive or even offensive. If you have a scheduled or automated marketing campaign already underway, edit those messages or suspend them altogether. Think about what concise messaging you can offer your audience that demonstrates empathy and support.
School closures, quarantines, social distancing, and caring for sick loved ones will mean even your healthy employees will have to remain home. Security is the number one concern here, as you’ll be more vulnerable to cyber theft, scams, and loss of data if you’re not prepared for your business to operate remotely. If you don’t have IT capabilities in house, find a local IT services company and get help from professionals.
Make sure your email servers and company networks are protected and ready to be accessed remotely. So that you can stay in touch with your teams in real time, adopt a secure instant messaging platform – Slack, Google Hangout Chat, Facebook Workplace, Trillian – and put protocols in place for what kind of information should be communicated over IM.
On a positive note, your IT department is probably best equipped to handle any type of crisis. They usually have a lot of documentation, phone trees, and plans in place to deal with any IT disruptions; such a mindset is part of their day-to-day operation. So, look to your IT providers as a model for how to adapt and prepare other areas of your business, particularly when it comes to communication.
At Civilis, we have a crisis preparedness plan that we can easily “pull off the virtual shelf” and activate. It outlines who’s going to contact whom under what circumstances, and how we communicate with our clients in different scenarios. It is a step-by-step process that is already prepared and ready to be launched. Ideally, you’ll have something like that in place, but if not, contact us – we can help!
Keep Calm and Carry On
In times of crisis, your clients, employees and family members will be looking to you for perspective and comfort. So, give yourself and your people frequent breaks. Go outside and get some fresh air. Meditate. Go for a run. Call one of us if you just need a little pep talk. Spring will arrive. Flowers will bloom. The world – and we – will survive.