When normality is replaced with uncertainty, it’s easy for panic and fear to set in.
In times like these, leaders with courage, empathy and agility are needed. Your team and clients will look to you for stability and assurance so now’s the time to be the leader your business needs.
There are many aspects the business leader needs to think about when operating in a state of flux like we’re seeing with coronavirus (COVID-19). Tenfold’s Managing Director, Ashley Thomson, coached his clients through the GFC of 2008 so he has first-hand experience in steering businesses through instability and significant economic downturn.
(Read how a Tenfold client was able to weather the storm of the GFC and come out ahead: excerpt at the bottom of this email) (And yes, he’s still a client of ours!)
There will be an upside for businesses on the other side of COVID-19
There are always cycles in business. It’s hard to imagine, especially when every news article about business and coronavirus is doom and gloom, but there will be a time in the near future when the worst has passed and the next upwards cycle starts.
During the later stages of the downturn you’ll want to be looking towards preparing your business for the up-tick because, as we saw coming out of the GFC, when it does happen, it happens fast!
In the meantime, stay focused and keep looking at your business financial model. Think about what opportunities this may present for your business. (No ambulance chasing. Ever.)
Past events have shown that a significant downturn like this clears out the dead wood – the price grabbers, the poor operators, the corner-cutters. If you can implement good (and ethical) business management, communicate well and stay positive, you’ll be in the best position to survive and then thrive when the economy picks up again.
Focus on what CAN be done and what’s in your control. Here are some practical tips to help position your business to get through the tough times and be in a good position for when the up-tick comes.
Communicate – in a crisis (like coronavirus), you can’t over-communicate
Communicate regularly and clearly with your team
Provide daily updates to your team (preferably at the same time every day – consistency is key). Even if the update is the same on Tuesday as it was on Monday, communicate that to your team. It’s important to be upfront and avoid sending mixed signals. Tell your team what’s going on with your business; what the current workload is, what’s scheduled and what’s changed, what your plans are to manage a down turn.
Inform your team about what the plans are to manage a quarantine event; how you’ll communicate with them, what the expectations are for working from home or taking leave.
Be open to questions, be honest when you don’t have answers, be positive.
Communicate regularly with your clients
Clients will be wondering about how any impacts from coronavirus to your business will flow on to them. Wondering can quickly turn into worrying so get on the front foot and proactively communicate with your clients. Let them know of any issues with the delivery of your products and services, what you are doing to manage through this time and what contingency plans you have in place.
Businesses’ Responsibility for Staff Health
For employees who feel unwell, particularly those that have been travelling, the priority is for them to get checked out. If you suspect a staff member has Coronavirus you should immediately advise them to call (not visit) their GP or ring the national Coronavirus Health Information Hotline on 1800 020 080.
Ensure you are familiar with your obligations as an employer to provide a safe workplace. If you’re not sure, speak to your coach or an HR advisor about how best to handle an unwell staff member (things to consider are; when you can ask a team member to be tested for COVID-19, when you can request them to self-quarantine and/or work from home, and which leave entitlements are appropriate).
For the latest medical advice, please head to the Department of Health website, for regular and timely updates: https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert
For travel advice, head to Smart Traveller website: https://www.smartraveller.gov.au/news-and-updates/coronavirus-covid-19
Business Continuity During Uncertainty of Coronavirus
Assess which company operations are business critical and which are optional. Business critical operations need contingency plans so that they’re safeguarded in the event of close down.
In the situation of a quarantine event, you may need to have your team work remotely. It’s best to get prepared now:
- Make sure your IT hardware and systems are set up so that your staff members can work from home.
- Look into systems that will enable your team to work remotely and collaboratively. Consider chat platforms, project management dashboards and other platforms that are online or on the cloud. Meetings can be done over Skype, Google Hangouts, or Zoom. (Read about more collaborative tools you can use here and here.)
- Set up a WhatsApp group so that you can communicate with your team as a group.
- Ensure that people working from home have access to the internet.
- Prepare to divert your office phone to your mobile.
- Prepare to update Google My Business with your opening hours and details.
For roles that must be done on site, take sensible measures to minimise the risk of infection. Use face masks and hand sanitisers and maintain good personal hygiene.
Australian Federal Government Financial Support for Small Business
The Federal Government has announced an investment package to support the economy. For businesses, the Government is proposing:
- Cash flow assistance for employers with tax-free payments up to $25,000;
- Increasing the instant asset write-off to $150,000 per asset, and making it available to businesses turning over up to $500M;
- Accelerated depreciation deduction;
- Wage subsidy of up to 50% of an apprentice or trainee wage.
For more information, go to: https://treasury.gov.au/coronavirus
Finance and Cash Flow Management During COVID-19
Review your financial reserves and projections. Your Tenfold business coach will prepare financial models for different scenarios. Having up to date information is the best way to make informed decisions and reduce the risks of consequences from knee-jerk reactions.
Apply for extra credit now. Think overdrafts, credit cards, lines of credit. Even if you don’t need the extra funds right now, it’s better to have access to money and not use it, than wait until you do need it. Lenders are still lending now but they will tighten the reins; it’s only a matter of time.
Review your debtors; consider offering discounts for early payment.
If your customers are asking for a refund, offer to postpone. Avoid refunds. Check your terms and conditions policies and make sure you’re complying with your own T&Cs.
Be upfront with your creditors (including lenders and the ATO, SRO, etc) about your ability to make payments. The more you are able to demonstrate sound management practices during this period of uncertainty, the more likely your creditors are to feel comfortable with your ability to repay. Maintaining good relationships with your creditors will support conversations about repayment terms and possible payment plans.
The first step is to assess your current stock levels and requirements. Communicate with your team so they can be aware of the need for sensible stock allocation and management. Err on the conservative side of frugal. Production from China is improving every day but there are many moving parts in the logistics of supply.
Look to stabilise supply chains by using safety stocks, alternative suppliers, and working with suppliers to solve bottlenecks. Where rapid solutions are not possible, collaborate with your suppliers to develop interim plans and timeframes.
Other tips to protect your business
- Stop shaking hands.
- Cross-train your key staff so that your business can continue to function if there are absences.
- Look at your business insurance: Check with your broker or insurance company if you can make a claim on your business continuity policy for any financial losses suffered.
- Look at which businesses and sectors are thriving: pharmacy, cleaning, hygiene. What opportunities may be there for your business to service those businesses?
- Stay smart. Think through all financial decisions carefully and use your coach as a sounding board – they have a view of how other businesses are faring and how you can use that insight in your business.
Do plan, do not panic. Stay safe.
Mobile Electrics – Survived the GFC in 2008… and thrived
In 2016, director of Mobile Electrics and Mobile Automation, Brian Emberson, reflected on his experience with coaching before, during and after the GFC.
Brian said, “When the GFC hit in 2008, there was a massive slow down across the economy. Some of the industries we service were hit hard, such as mining and second-tier automotive. Many businesses in our field did not survive however we identified niche markets that would be sheltered from the downturn. We aligned ourselves with those to ensure our prosperity.
With our business coach’s guidance, we targeted those businesses. That allowed us to achieve higher prices for our work with acceptable margins. This strategy not only helped us weather the storm but also put us in a positive position as the economy started to pick up again.
Of the competitors we had at that time, I’d say 2 out of 3 are no longer in business. The decisions I made with our business coach at that time meant that we survived the GFC and then thrived. “
Read Brian’s full story here: https://tenfoldcoaching.com.au/testimonials/brian-emberson-mobile-electrics-2016/
Ashley Thomson is the Managing Director of Tenfold Business Coaching and is a multi-award winning business coaching and member of the Global Coaching Hall of Fame. Ashley authored the white paper, ‘Increasing Profits in Uncertain Times’ in 2009, referencing the results he had achieved with clients during the height of the GFC. For a copy of the white paper, please contact Tenfold’s office. He also wrote an article: 10 Strategies to Recession-Proof your Business (Feb 2019).