How Small and Mid-Sized Businesses Should Deal with Coronavirus
There is a lot to do, but the first steps are making the hard decisions and having a technology plan in place.
The outbreak of COVID-19, known to most as Coronavirus, has hit the markets and global economy almost as fast as it has infected citizens throughout the globe.
Fears regarding the virus have resulted in huge market declines, volatility, and now, multiple halts in trading. The business world can, and seemingly will, unravel quickly.
In the days and weeks since the spread of the virus, COVID-19 has transformed what many investors considered a bull market into one just that’s trying to keep its head above water.
“That’s why businesses need to be ready with a disaster recovery plan at the drop of dime,” says Mike Boyle, a business transformation coach and division president at RCM technologies.
Being hit hard are sectors ranging from retail to technology to manufacturing, and as the virus picks up steam, a recession is likely coming that could extend into 2021.
Under even more strain than those large conglomerates, small to mid-sized businesses are going to be affected tenfold; they don’t have the same economies of scale and resources as those larger corporations.
According to Boyle, this is a huge hit to the economy, especially considering his estimate that small to mid-sized businesses make up 80 percent of all businesses in North America.
Boyle, who is an expert at transforming under-performing companies into thriving businesses, recommends taking the following steps to prepare your company for this difficult time
Make the Hard Decisions Immediately
While most experts expect the global economy to eventually recover, conditions are not expected to get any easier in 2020.
Businesses have already or will soon be cutting revenue projections for the year. Whether they want to or not, companies will need to make the difficult decisions right away, and that means taking a hard look at their general expenses as well as those for sales and administration (SG&A).
“Do you lay off employees?” said Boyle, considering one option business feel they may need to contemplate. “There is so much uncertainty businesses need to be prepared for and we need to take a hard look. If there are too many people on the bench and not enough revenue coming in, companies seriously have to consider it.”
Another option to consider is potentially furloughing employees, keeping benefits in place while paying a portion of an employee’s salary until the outlook improves. People may consider it an overreaction. But for small and mid-sized businesses, a few months can devastate the entire year.
“Companies typically don’t pivot quickly enough in a situation like this,” said Boyle. “In 60 or 90 days, when you are keeping overhead and inventory, and you’re ordering more supplies and still paying vendors and all these employees, 90 bad days could financially crush your business for the rest of the year.”
Technology and Analytics
If COVID-19 had struck in the 1980’s or 1990’s, it is tough to imagine how the business community would have responded. After all, the internet had nowhere near the capabilities it does today, lacking even the most basics like e-mail or video conferencing.
But even in today’s world, with all this new technology, there are still many obstacles.
“It’s not as if your computer has a virus — now it’s a contagious virus that’s affecting lives, people can’t be working in the office, so offices are shutting down,” said Boyle. “H1N1 didn’t really hit us to our core. This is shutting down schools, businesses and events. Technology has to be at the forefront to sustain your business going forward.”
Today, services like Slack and Zoom make staying in contact with co-workers and working remotely available to a broader range of employees, without hindering productivity. Our laptops and cell phones grant many in the business population the accessibility to work from anywhere. 2020 is seemingly built for the remote work life.
Unfortunately, it’s not so cut and dry for smaller and mid-sized businesses that may not be as technologically advanced or operate fully on the cloud. In order to be successful during this time, companies have to ensure that data remains secure, employees need to have access to VPN (virtual private network) connection, and remote IT support so they can work efficiently and effectively.
Another part of running a business is having the access to the information you need to make important decisions quickly. “In a time like this, you can’t be looking at data or projections on a standard monthly basis,” said Boyle. “I am looking at it on a weekly basis, or even daily in some cases, because we have to be prepared.”
There is still a long way to go before things settle down with Coronavirus. It’s important to be realistic and adequately prepared. Utilize technology and analytics to mitigate the negative effects, but also be ready to make the hard decisions.
Those include limiting travel, putting a halt on hiring, making layoffs as necessary or furloughing employees. Some of those unpopular decisions in the short-term can benefit long term.
Remember, as Boyle said, a few bad months can make or break a company’s fiscal year. The most important thing during a time like this is to know your business inside and out. That will justify every hard decision you have to make.