Making Most of Your Un-Busy Times in Business
With supply and demand slowing down drastically, here are some tips to leverage the corona crisis to your benefit. Read on for a full corona business continuity plan.
Beginning in February 2020, the world as we know it came to a grinding halt due to the coronavirus outbreak. The virus which infected close to half a million people and claimed more than 21,000 lives was declared a global pandemic on 12 March 2020. A day later, the Dow Jones registered its biggest one-day decline since the Black Monday crash of 1987. We got to see the dark side of globalization as the virus spread throughout the world like wildfire.
Twin Slowdown of Demand and Supply
Governments across the world took unprecedented steps to break the coronavirus chain. International and domestic travel was restricted in more than 100 countries, followed by total lockdowns and curfews in many regions of the world.
The world came to a standstill and the economic momentum started to wane off. Stock markets across the world were on a free fall and central banks of more than 50 countries lowered interest rates to historic lows to buffer the effect of a slowdown. Policymakers scrambled to announce relief measures sand stimulus packages to keep business afloat.
With a collapse in logistics and operations, business across the spectrum started to face the heat of cash flow shortages. The first sector to face the heat of the coronavirus pandemic is the aviation industry. The International Air Transport Association (IATA) estimated a global revenue loss of up to $63 billion due to the ongoing Coronavirus crisis.
Hotels and restaurants have become ghost towns as cancellations reach 100%. Event firms also have to bear the brunt of zero income as public gatherings get banned in corona-hit regions. Various other sectoral reports paint the same grim picture-a standstill demand with low chances of a near-term recovery. With such low demand, global crude oil prices also corrected sharply to reach 2002 levels.
The collapse of this magnitude has brought in testing times for business. While big corporations are cashing in on the corona trend by reaching out to support communities, medium and small businesses are finding a lot of free time on their hands.
You can utilize this time to your benefit by planning your future projects, auditing past performance, streamlining processes, and more. Here are some ways you can leverage the corona virus crisis.
Form a Business Continuity Plan
Every business needs a business continuity plan (BCP). If you don’t already have one, it is a good time to chart out a strategy to smoothen out the near-term slowdown. Ideally, your BCP should involve emergency backups, ensuring enough liquidity to survive at least 6 months of business operations, renewing licenses, keeping clients/customers informed of delays, leveraging work from home, reviewing workforce productivity, automation of repetitive work, setting up multiple supply chains, developing alternative communication/delivery channels.
Invest Your Time in Future Planning
There are two stages in the evolution of every business: potential and kinetic. These cyclical phases are essential for the consistent growth of a business. While in kinetic mode, the business runs on the resources gathered during the potential building stage, aiming to achieve targets and expand its outreach.
In the potential building stage, businesses should audit past performance, study markets/products, build capacity, prepare taxes, and plan future course of action. The coronavirus pandemic gives an excellent opportunity to pause your processes and conduct a thorough business appraisal. This planning will help you achieve your goals smoothly when the economic engine starts off again.
It’s a Great Time to Go Digital
Companies that have crossed the digital divide are facing relatively lower difficulties during the coronavirus crisis. Many companies are working with full efficiency since their business ecosystem allows employees to work from home. If your business is yet to go digital, now is the time to take the leap of faith.
You can invest your time and resources into branding your business, growing your social media handle, undertaking SEO/email marketing campaigns, etc. You can also convert most of your business data into the digital mode for easier future analytics. One prime example in this regard is the restaurant business. While table reservations were down significantly, there has been an equally sharp rise in the food delivery segment.
Don’t Underestimate the Corona Virus Disruption
According to the Mc Kinsey Corona Virus Impact report, the supply side disruption caused due to coronavirus should not be underestimated. If the corona crisis extends beyond 6 months, it is likely to affect consumer behaviour and market sentiments in the long term and dampen any chance of demand recovery.
The possibility of a recession-induced by the coronavirus crisis isn’t ruled out. Mc Kinsey also states that the incoming recession could hit small and mid-sized companies more severely than enterprise-level organizations. Hence, this can be a good time to hunt for better insurance policies, realign business processes, establish long term contracts with multiple suppliers, cut costs at each level, reach out to new customers, and chart out plans for improving cash flows.