The news is full of coronavirus stories these days. It is difficult to know what impact if any that it will have on our community and businesses. But the time is now to prepare for possible impacts on your small business.
Here are five key things that small business owners can do today to prepare for the possible spread of the virus in our community.
The first is to put together a written contingency plan on business operation, considering how to serve customers and support employees. These plans now need to include the possibility of the spread of communicable disease in our community. Customers remember suppliers that take care of them through difficult times. This pre-planning sometimes is thought of as a waste of time if not needed but actually reflects good leadership and prudent business planning. This plan needs to be in writing, prepared along with key employees and communicated throughout the organization. The time to plan for the storm is when the sky is blue.
Secondly, review your supply chains for critical inputs. You MUST have more than one supplier for each of your critical inputs into your business. Diversify sources and origination points if it is economically feasible. If you don’t, it could be only a matter of time before your operation is impacted by supply interruption. Get this done as soon as possible to support your business in the future.
The third is to have a thoughtful plan on how you will support your employees if our community is impacted by the virus. At SCORE it is clear to us how critical it is to employ and keep skilled, engaged employees. This is perhaps the greatest small business challenge we routinely hear. Your approach must balance the welfare of the employee with the interest of your business. You need to educate your employees on safe work and sanitation practices. You need to be sure they know to stay at home if sick. Work at devising flexible work schedules if possible. Travel policies must be reviewed and revised for the new paradigm we are facing. Cross train your employees so you can keep key positions filled if you begin facing staffing reductions. And most importantly, be sure you are providing a safe and clean work environment. The standards of cleanliness are changing as we recognize new risks in our environment.
Fourth, review your financial projections and cash flow requirements. We are used to a degree of seasonality in our local economy. It is possible that revenue may be delayed or even lost through changes in shopping and consumption habits. Consider delaying expenditures or capital investment that could be deferred. Manage expenses carefully and move to preserve capital. Marketing approaches, seasonal discounts, prepayment offerings and down payments for contracted work are examples of what can positively impact cash flow. These should be reviewed and used to support revenue receipt.
Lastly, put a proactive communication plan in place that allows your customers and employees to understand the current dynamics of operation of your business. You want to reflect your thoughtful consideration and planning as a business owner and dependable supplier. None of us today know what exactly is going to happen in the future, but that should not keep you from taking steps to manage whatever it is and how it impacts your business and employees.
If you are thinking about starting your own business or have a small business that you need help with, come and see us at SCORE. We provide free and confidential business mentoring.