How Not to Waste a Crisis in Your Business

We use a famous tag line that if you do not manage risks you manage a crisis. But what do you do when a crisis presents itself? I would say do not waste a crisis! It is a time of confusion and unprecedented time that no-one could have accurately predicted.

A pandemic that has stalled the world and we have all to adjust and do things differently. Many analysts have cast doom to the business sector, in fact, one of the analysts once said that there are businesses that will shut the doors forever while others will thrive during this time.

The actions or inactions of businesses will directly impact their closure or their survival. The strategic decisions made by businesses will spell doom or success. One would therefore ask, what are the things that one can do to stay in business during this time?

Businesses are struggling to be innovative during this time to generate revenue to keep afloat. Businesses are actually having to think about their revenue streams and how they can generate revenue while still complying to the working guidelines issued by governments.

When everyone is now at home, they are in the online space; they have time to go through several chat platforms. It is high time to take goods and services where the people are.

We have supermarkets who have designed marked lines on queuing rows and provided one-meter distance to comply with the social distancing rules.

Supermarkets are also delivering packaged food and shopping to homes. They have strategized on how to still do business and become more creative to stay afloat.

All other businesses need to become innovative to stay in business. Schools have created or adopted online learning platforms and continue to execute their mandate. This is the time to innovate and stay in business or otherwise close shop forever.

There are businesses who sell their goods and services on credit. They are therefore owned money by businesses and individuals. 

These are also known as debtors or payables. A business can be very profitable but runs the risk of liquidity and eventual closure. This is the time to collect the debts and do as fast as possible.

Any business that is experiencing liquidity challenges now will need to craft a good strategy to collect debt, otherwise the risk of closure is very eminent. It is time to enhance their debt collection activities.

The money the business is owed will facilitate the business to stay afloat during this period as well as able to craft different strategies to stay in business. Being proactive is key at this stage.

In circumstances that the business is financed by loans, they face a real risk of inability to pay based on the schedule of payments agreed upon with the financial institution.

The Central Bank of Kenya (CBK) has issued instructions to commercial banks to undertake loan restructuring for businesses that can prove that they are not able to operate and generate revenue due to the COVID-19 pandemic.

Businesses should provide evidence to this effect. This is key for future survival; businesses cannot assume that banks will provide a blanket waiver due to the pandemic.

Banks are commercial and have to also make prudent decisions to continue being profitable. Businesses should therefore prepare adequately to convince the banks that they are actually affected by the current directive in order to restructure their facilities. Adequate documentation and preparation to illustrate this is critical during this meeting with the financial institution.

Every business incurs operational costs; these are costs that have to be incurred to conduct business, they include rent, salaries, electricity, water amongst other such costs.

These costs are necessary to hold the business in place with or without revenue. During this time every business has to make a decision on how to cater for these costs. Businesses should understand that we can control some of these costs: salaries can be negotiated with employees based on the level of business being generated.

The business should hold candid conversations with the staff members while making these decisions. The rental costs can be discussed with the respective landlords.

Businesses can opt to take small spaces or retain their spaces as they renegotiate suitable payment plans for rent arrears once the situation is resolved.

The costs of electricity and water are totally in the control of management. There should be measures to control the use of electricity and water on a need to use basis.

The business should analyze all its liabilities and make strategic decisions on how to cater for them in the net ninety days. Critical thinking and analysis are key to ensure that these costs do not affect the survival of the business in the future.

There are those businesses that are able to continue operations remotely. These means that their staff members are able to work while at home.

The business is supposed to craft ways of managing these staff and the deliverables. The business should provide the necessary tools to their staff members to continue with daily operations.

These tools include laptops, data, access to information required to perform their tasks. There is a real risk of data security, especially while working offline.

The business should think about data security and how it can enhance these even as the staff work online. These would include signing a non-disclosure agreement by all staff, securing the office laptops with access times that these tools can be used to enhance surveillance remotely.  

There should also be provision of secure internet provision to staff members to secure data for the organization. Organisations should also schedule frequent online meetings with staff members to ensure that work is understood and done based on the standards provided.

A morning roll call and an evening review meeting would be good to keep things in check. This also enhances good communication and review of Key Performance Indicators during this time.

This is the time to take this crisis, analyze the opportunity and run for it. There are businesses that will shut their doors forever, there are business that shall thrive and take an upward trajectory, there are new business that will emerge and stand the test of time.

This shall all depend on how creative or not business owners will be during this time. It is time to do critical thinking and fast action.

The choice is ours to take.  

CPA Caroline Gathii, IRMCert, is an International Certified Risk Expert with FirstIdea Consulting Limited

She can be reached at [email protected]

See Also>>>> 4 Simple Steps Your Business Can Take to Retain Top Talent

Latest

Kenya Re New Awards to Stimulate Swift Premium Payment

The Kenya Reinsurance Corporation (Kenya Re) has launched an award scheme to recognise insurance companies that remit premiums on time. T

NSE Gets New CEO As Geoffrey Odundo Exits

The Nairobi Securities Exchange (NSE) has appointed Frank Mwiti...

Uhuru’s Newspaper Dresses Down Ruto, Calls Him ‘Small-minded’

People Daily newspaper criticises President William Ruto and his administration, arguing “the disdain by the Ruto administration for the media has never been disguised.”

Kenya’s Minimum Wage is the Highest in East Africa

Kenya is putting many thousands of shillings in the pockets of those at the bottom end of the pay scale than any of her counterparts, Uganda and Tanzania, in East Africa - it has the highest minimum wage.

Follow Us

Newsletter

Don't miss

Throwing The Girls Into Deep End: Single Kiasi S3 First Look

Nairobi’s dating scene is about to get messy: Single Kiasi...

Win New Year Crossover Mugithi Tickets With Odibets

The event has attracted prominent Kikuyu musicians who will be headlining the event including Samidoh and Muigai wa Njoroge.

For Coloured Girls is Theatre Production of the Year

The play ‘For Coloured Girls (who have considered suicide/ when...

Tusker Oktobafest Rolls East African Cultures into One

From regional events across Kenya to inaugural gatherings in Uganda and Tanzania, and the Tusker Oktobafest grand finale in Nairobi, the festival harmonized traditions, celebrated diversity, and highlighted the rich cultural tapestry of the East African culture

Lupita’s Little Brother Junior Nyong’o Charting His Own Path in Acting

Junior Nyongó, who is also a musician and a DJ and now a graduate of UC San Diego with an MFA in Acting, is crafting his own solid path in the world of acting with roles in major theatre productions.

Safaricom To Power Tusker OktobaFest Beer Festival

Safaricom’s involvement in OktobaFest as a technology and payments partner will focus on fostering seamless in-festival connectivity, empowering the youth and Gen Z community through Safaricom Hook, and powering digital payments through M-PESA.

Music Producers Launch Organization To Streamline Recording Industry

Recording Industry of Kenya (RIKE) was launched on 9th October 2023. Registered in 2022 as a not-for-profit organization, RIKE aims to promote the collective interests of producers of sound recordings in the country.

Nairobi’s Hero Bar Listed Among World’s 50 Best Bars

World Best Bars: Hero Bar in Nairobi continues to climb the list, moving up six places to No.62 and Johannesburg’s Sin + Tax comes in at No.94. Dubai new entry Ergo is at No.69 and Melbourne’s Byrdi has re-entered the list at No.61.

Kenyan DJs Face Off In Smirnoff Battle Of The Beats Season 3

The Smirnoff Battle of the Beats Season 3, a DJ competition, is poised to unleash an unprecedented musical frenzy countrywide.

The Highs And Lows Of Betty Kyallo, Sisters Show As Season 2 Ends

Kyallo Kulture has always been, above all, about sisterhood, and in Season 2 we have witnessed the charm of it - the ups that gave us wholesome moments as the sisters led by Betty Kyallo spent time together.
CAROLINE GATHII
CAROLINE GATHIIhttp://www.businesstoday.co.ke
CPA Caroline Gathii, IRMCert, is an International Certified Risk Expert with FirstIdea Consulting Limited. Email: [email protected]

Kenya Re New Awards to Stimulate Swift Premium Payment

The Kenya Reinsurance Corporation (Kenya Re) has launched an award scheme to recognise insurance companies that remit premiums on time. T

NSE Gets New CEO As Geoffrey Odundo Exits

The Nairobi Securities Exchange (NSE) has appointed Frank Mwiti the new CEO effective May 2, 2024, to replace Geoffrey Odundo who exits the bourse...

Uhuru’s Newspaper Dresses Down Ruto, Calls Him ‘Small-minded’

People Daily newspaper criticises President William Ruto and his administration, arguing “the disdain by the Ruto administration for the media has never been disguised.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here