A business guide to surviving the coronavirus pandemic
COVID-19 is as much a public health issue as it as an economic one. As a business owner, you are very aware of this and it might seem like it is impossible to get a handle on the future of your business Everywhere you look, someone has something to say about the virus and what it means for you
and your future.
Here, in this article, we want to put your future back into your hands. We are offering a clear rubric that allows you to distil all of the noise and fear into a path forward for your venture.
So, before you read any further, grab a pen, a jotter and the most up-to-date versions of your venture’s balance sheet and operating model. Once you’ve grabbed those, let’s get to work.
Mckinsey’s Insights team has put together an article highlighting different possible scenarios and their consequences.
Take a look and then build out your own scenarios. What are three or four scenarios relevant to your business context? Build out (and write down) your own clear map. Then step back from this exercise on future prediction and draw a picture of what your business looks like today.
At this very moment. Try to build as complete a picture of your affairs as possible: cash in the bank, clients, orders, suppliers, loans, employees, etc. How do things look?
Once you’ve got both these pictures (scenario models + business situation) clearly written out, you need to take the time to chart your course forward under each of the scenarios you built out in the first exercise.
This is important whether you are a family business, a solopreneur, a startup CEO or someone just hustling to make ends meet. You absolutely need to plan because it allows you to see the possible futures for your venture. If at any point you feel like you are struggling with this process and need help, reach out to us for a free consultation.
We are, as always, keen to work with you.
Each business future map should make it clear to you how all aspects of your business will be affected: salaries, revenue forecasts, orders, client relationships, supply chains, employees, etc. You might need to cut salaries, you might need terminate contracts, you might even need to hire people! Perhaps the team you need for the future of your business is not the team you have now. Perhaps your model needs to change to adapt to our new world order because COVID-19 is here for the long haul. Building this
understanding helps you to take your power back. You cannot short-circuit it; you cannot outsource it and you should not postpone it.
Depending on your business, your interactions with your clients and suppliers (and possibly contractors) may be based on contracts. You probably do not have the power of a full legal team but you can yourself take the time to review your existing contracts and the implications for the prevailing circumstances. Can you fulfil your obligations? Do you have clauses for extenuating circumstances? Do you need to engage a lawyer to help you renegotiate terms and get you more leeway?
Always think in terms of the specifics and remember that because everyone is struggling, many want to offer help so all of us get through this stronger. Some companies are even offering free legal advice and this is a great time to capitalise!
Armed with all of this information, you need to reach out to your key stakeholders. A simple bucketed list might look like: suppliers, clients, employees and shareholders. Let them know that you now have a path
forward that is adaptive to the circumstances at hand. Start with salutations that acknowledge that you understand the gravity of the circumstances and are empathetic to whatever they might be experiencing. Let them know that as a venture you still recognise that they matter even if everything feels like it is in flux.
Be open with your clients about your ability to fulfil your obligations to them and open up the floor for negotiations for them to fulfil their obligations to you. It might be helpful to categorise your clients into buckets (paid, unpaid, high-priority, low-priority, etc.) so you can clearly define their needs and
manage their expectations.
What happens next for clients whose orders are unfulfilled? For clients who have not settled bills, make a collaborative payment plan that manages this. Remember here that people always remember how you make them feel not usually what actually transpires. So, tread lightly, tread carefully and tread
Figure out how your supplier’s ability to deliver on its obligations to your business will affect your operations. That means calling them and asking specific questions about volume, timelines and price point. Do not take anything for granted. You need to understand whether you need to find new suppliers or reconfigure your existing contracts with your current supplier. Again, be open with your suppliers, as you would like your clients to be open with you, so that they too are able to plan and make informed decisions.
Then take a look at the implications of those conversations with suppliers and clients. What does it mean for your team in light of your scenario maps?
Embrace the unfortunate reality that you might have to place some employees on furlough- a leave of absence – and others might have to be let go altogether. You can make these decisions based on your assessment of your client needs and plans for your business future.
Be honest and open with your entire team because everyone needs to understand that it is sink or swim time. You may need to come to agreements with them on salaries, bearing in mind their own financial obligations. Be rational but compassionate, making sure to lead by example. In fact, we highly recommend that your first point of contemplation is whether to do away with you and senior partners’ salaries altogether before you take the axe to the lower members of your team.
As you do all of this, remember to keep things simple; the best solutions often are. The underlying theme here is that you must be proactive about getting information from your stakeholders that will help you
plan for your business. This process, which will likely take several hours, will not be a productive use of your time without focussing on the essentials that matter. Ignore the noise.
We hope this article equips you with the tools to start to move forward. Crucially, remember that we are going through this as a community and so where you have some leeway, be generous with your stakeholders. Help them to see, too, the benefits of adopting the same approach. We are rooting for you to succeed and are available in earnest to get you there.
PS: You might qualify for a loan from NIRSAL and/or a movement and operations
Kristin & Oladoyin
Reach us at admin@spurt.
group if you have any questions