Small and medium sized businesses need to implement a range of key measures which can greatly increase their chances of surviving the coronavirus emergency said Hayes Knight chairman Greg Hayes.
Mr Hayes said strategic planning, leadership, communication and risk management were essential factors in preserving small businesses, in what is a tough period for many SMEs.
The first crucial step is to take an honest and objective analysis of how the business could be impacted by coronavirus, which is also called COVID-19.
Have a plan – break it up into various stages.
Stage 1 – assess where the business is now.
Stage 2 – what will happen if business conditions continue to deteriorate – That might be considering how you deal with a further 10 per cent drop in revenue, for example. Should you encourage staff to take some of their leave or perhaps job share?
Stage 3 – where conditions get even worse and what you would need to do to handle that, which might include looking closely at the funding of the business.”
The key is to react but do not overreact. Once you have assessed your position, if you need to make changes, our best advice is go hard and go early.
Mr Hayes said that a strategic plan can probably be drawn up in a couple of hours, especially if an experienced adviser is involved to assist. It will identify a staged approach and the triggers for your business that move you from one stage to another.
Strong leadership becomes even more critical in challenging times. Staff are looking for business owners to provide a calm, measured response to what can be an unnerving times for employees.
”Business leaders should be communicating with their staff regularly, to assure them there is a plan to deal with the coronavirus,” said Mr Hayes. ”It is important for staff to feel that everyone is on the same path.”
Many organisations have opted to allow their staff to work remotely due to coronavirus, which can a sensible approach. However Mr Hayes said staff needed to be aware of all the implications of working from home.
For example, privacy and data integrity need to be maintained when staff are working remotely. Simple things like closing their computer so no sensitive client documents are open is important. The business needs to ensure that all remote computers have appropriate virus and malware protection on them. With all that is going on you don’t want to introduce a ‘bug’ into your data system.
Constant communication with customers and suppliers is crucial, said Mr Hayes.
”A business probably needs to be talking to its key customers more than ever, to gauge how they are going and to give them confidence about your business continuity plans.
With suppliers, it is asking whether they envisage any difficulties in supplying your business in the next few months.”
An SME also needs to have strong risk management protocols. For example, debtors need to be watched closely, particularly if a big client is taking longer to pay than normal. That in turn might trigger a business to rethink its financing mix, perhaps going to its bank and seeking additional funding to address a potential future shortfall.
Both federal and state governments have acknowledged the depth of the coronavirus emergency. While some details are still being finalised, there is likely to be substantial assistance on offer for many small businesses. Stay connected with this and ensure that you maximise your entitlements.
”Coronavirus is affecting industries and individual businesses in very different ways, ” said Mr Hayes. ”But there are plans which a small business can put in place which can make a huge difference.”
Hayes Knight has experts who can advise SMEs on strategies to assist in dealing with the coronavirus emergency.