COVID-19 – Business Planning
We are receiving a number of enquiries from clients worried about what impact COVID-19 will have on their businesses.
You may find the following information and ideas helpful in navigating your way through this period and as always we are here to assist you with your financial affairs.
Consider adopting a TCUP mantra – "Thinking Clearly Under Pressure" and remember "Worrying is not Thinking". (reference https://www.inc.com/business-insider/13-secrets-to-performing-well-under-pressure.html)
Consider your purpose – generally this would be to keep your business running normally through the crisis and beyond.
Consider your strategy – what is your strategy for keeping your business running.
It may be useful to understand that there are four possible stages that business owners will go through in the current crisis.
Stage 1 - Denial
- Being cynical or believing the whole thing has been blown out of proportion and is overdone.
- As business owners we need to accept that there is a crisis and therefore consider what a worst case scenario might look like for our businesses.
Stage 2 – Recognising there is a Crisis
- Identify the current conditions and parameters that your business is operating in.
- Review your obligations including:
o Government Requirements, i.e. what limitations and restrictions are being forced upon your business by Government.
o Understand your obligations to employees.
o Do you have contractual obligations to customers and/or suppliers eg provision of goods and services, leases etc.
- What are the supply and demand implications for your business.
- Where appropriate keep your employees and other stakeholders informed about the steps you are taking to minimise interruption and harm. Experts generally agree that open communication is advantageous in times like this.
Stage 3 – Planning Stage
- Scenario planning – what do your best, worst and probable scenarios look like.
- Review financial modelling.
- Prepare "What If" scenarios.
- What is the likely timeline for the business interruption events.
- Consider employee issues including, what are our leave obligations, do we need to stand people down, can we job share, can we make employees redundant, etc
(reference www.employsure.com.au/coronavirus and https://www.fairwork.gov.au/)
- Will you need to fund business interruption – do you need to be talking to your financiers.
- Do you have ATO debt and if so what is the strategy for dealing with the ATO.
- Can technology be better utilised in your business.
- Generally do you have a business "Continuity Plan".
Stage 4 – Once the Threat has Passed
- There will be opportunity for entrepreneurial thinking.
- If you made changes through the crisis can any of these changes be used to your advantage going forward eg staff working from home with less requirement for office space.
- Are there ongoing benefits of using different technologies after the crisis.
- There may be less competitors in your industry, if so do you have strategies to attract potential new business.
- What lessons have been learnt from the crisis and what "risk mitigation" strategies can be implemented in the event of future catastrophic events.