The COVID-19 pandemic caught the world by surprise this year. This resulted in business leaders and entrepreneurs striving to make decisions to adapt and navigate the effects of the pandemic and build resilience for their businesses.
The pandemic caused and continues to cause numerous disruptions including; on and off border closures, trade and travel restrictions, cash flow problems for most businesses, supply chains disruptions forcing suppliers to operate on force majeure clauses to excuse or delay performance, inaccessible markets for traders, remote work and physical distancing that a majority of companies were not accustomed to and an overall decline in the workplaces productivity as a result.
Further, the pandemic has decimated jobs and continue to place millions of livelihoods at risk.
Without the government’s adaptation of emergency response measures such as tax reliefs and restrictions of movement, there would have, undoubtedly, been many more immediate business casualties.
As countries race towards attaining a vaccine for their citizens, the effects of the pandemic are bound to be felt long after this. Businesses that have been in good financial standing this year may not be able to stay that way for long if the pandemic persists. The challenge for business owners’ entails mitigating and getting solutions to curb the long term effects of the pandemic.
While your business may have survived this year, there is a likelihood of it becoming a statistic in the next wave of business causalities if the right strategies are not implemented.
Based on our experiences, we share the following five key action points that business owners can continue to adapt to build agile pandemic response plans to deal with the long term disruptions and outages experienced in this pandemic.
1. Review the current business continuity plans and their capability
As the year comes to a close, every business should review its continuity and contingency plans put in place for this year and assess whether they are able to carry the business through for the next 6-12 months. This is because the effects of the pandemic are still fluid as health officials and global health bodies continue to warn of subsequent waves.
If there has been a gap in the plans you incorporated this year, research on new practical ones that can cushion the business amidst a global slowdown and a possible recession
Key focus in your business continuity plans are the potential risks that the business is likely to face and how these can be mitigated.
2. Cash flow management
Cash flow has been a major challenge for many businesses and was a key differentiator between those businesses which survived and those which failed.
The key tool in cash flow management is cash flow forecasts. Put together and review 3, 6 and 12 month cash flow forecasts. Monitor cash positions by regularly updating the forecasts to reflect actual cash positions. Determine steps and measures to increase cash coming into the business and reduce cash going out of the business. Enter into payment plans with your customers and explore potential for cash sales to enhance cash inflow. Reduce outflows by reviewing costs, negotiating extended payment terms with your suppliers, renegotiating loan repayments and deferring capital commitments. Lastly, consider need to access funding such as overdraft facility to meet projected cash shortfalls.
3. Remote work and reimagining the post pandemic workforce
As companies adapt to the new normal, remote work and or a combination of remote and on-site working has become the new normal. Remote work has proved to lower costs for companies and increased employee working flexibilities. However, there are debates on whether the overall employee productivity has increased or decreased. This, however, depends on each individual company.
The key take away to enable your company reimagine the post pandemic workforce would be to choose the model that will help improve your overall company’s culture, productivity and safety of your employees.
Your challenge is to fashion the best method that fits your company, and let it give birth to a new shared culture for all your employees that provides steadiness, social cohesion, belonging, whether your employees are working remotely, on premises, or in some combination of both.
4. Traditional Brick and Mortar Businesses Versus E-commerce platforms
At the height of the pandemic, the gap between brick-and-mortar and online commerce was widened. Consumers were pushed to rely on e-commerce platforms as because the access to physical stores was limited.
This is a trend that is bound to stick and gather momentum in the future and as such, understanding and deploying online sales through the website and social media channels will go a long way in mitigating the impact of the disruption.
5. Technology and IT related risks
Most companies have experienced incidences of Cybersecurity and other IT related risks due to gaps in their technology deployments arising from shifting their workloads to the cloud, extended work from home by their employees, deployment of video conferencing and remote collaboration tools, upgrading of their available network access and buying additional license’s all of which have made work easy but increased the chances of cyber-attacks.
Companies need to enhance their technology risk management and technology audit functions to mitigate and identify these vulnerabilities in an informed and timely manner. The functions should be such that they are focused on identifying and instituting control measures to combat existing and potential IT related threats.
It is Covid-19 pandemic this time but we do not know the timing, nature and extent of the next big disruption. What is clear is that the business survival strategies that businesses adopt and embed in their operating business models will be of great value not only in navigating this pandemic but also in the event of future disruptions.
We are available to assist in establishing and implementing your business restructuring and turnaround strategies.
For more information regarding this alert, please contact;
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