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When a crisis such as the coronavirus hits, having a good business action plan in place increases the likelihood of protecting your business and surviving it.
In normal circumstances, a business would typically plan for crises such as a natural disaster, a cyber attack or a business owner becoming gravely ill. Right now, that crisis is the global COVID-19 (coronavirus) pandemic – something that very few people could have foreseen. Small business owners are being heavily hit by the effects of the nationwide shutdown aimed at stemming the spread of coronavirus, so protecting your business is a key concern. The good news is that it’s not too late to put together an SME action plan (also known as a continuity plan), which can lead your business through the coronavirus crisis. Here’s how to do it.
With so much uncertainty in the business environment, especially during the COVID-19 (coronavirus) outbreak, planning can seem futile. However, creating an SME action plan is a valuable exercise as it will help you prioritise your day-to-day operations while looking towards the future, says Craig Saphin, a Sydney-based consultant who works with small and medium businesses (SMEs). “It's hard to anticipate exactly what the crisis will look like. That’s why crisis plans tend to be general in nature. Detailed plans are a waste of time – you should be able to put it on one page,” he says.
Saphin’s main piece of advice is not to delay putting an action plan together, and he uses two real-life examples to illustrate why. “One of my clients took some hard decisions on cutting costs extremely quickly. They put together a revised revenue plan and set up their staff to work remotely. They are now doing well and meeting those revenue targets. Another client has a more complex business and they're using that complexity as an excuse to drag their heels. They could have saved themselves a lot of money and had the potential to be viable for longer if they had moved more quickly.”
Cash flow is king. Sit down and thoroughly go through your profit and loss statement. Then plan a revised revenue forecast for the duration of the downturn. Be conservative. Think about ways to restructure the business so that you pivot towards ecommerce sales and distribution. The most important thing is to break even, so that you don’t burn through the cash, says Saphin.
“Creating a revised revenue forecast sounds like a basic thing to do but it's surprising how many businesses don’t do it. Running out of cash is the single biggest factor why organisations go out of business,” he says.
New challenges are thrown up by having staff working from home and, due to the swiftness of this transition, businesses now operating remotely have been particularly impacted. Make sure your team is set up to work productively from home. “Quite often it's assumed that everyone will have a desk, a chair and a printer at home to use, but it’s important to check that everyone has the right tools they need to succeed,” says Saphin.
It is also essential to consider the wellbeing and health and safety of your employees. Choose an agreed communication channel and make sure that employees understand what is expected of them. Holding regular meetings will help prevent isolation and demotivation setting in.
While it may not be business as usual, it’s vital not to neglect your clients and customers. Remember, says Saphin, “They still want to hear from you, but it's not about you. It's about them. Tell them how you can help them.”
It’s also worthwhile starting to think about their changing long-term needs. “The first mistake people make is thinking that the business world is going to be the same. It is going to be very different and your clients’ needs will be different. Your competition will change – and so should you,” says Saphin.
If you can anticipate how your customers’ needs will change in your action plan, you are likely to remain ahead of the game.
Make sure to do your research and keep up-to-date with business information and support provided by federal and state governments – especially during the COVID-19 (coronavirus) pandemic. Each state has a small business office with information on help available for dealing with the crisis:
Useful Federal Government business information can be found at business.gov.au and support for business at the Treasury. Also check out free resources like this one from Small Business Australia, which conducts research and advocates for small business, and offers small business support.