There’s a famous tagline that if you do not manage risk 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 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 keep afloat. Businesses are actually having to think about their revenue streams and how they can generate revenue while still complying with 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 to online learning platforms and continue to execute their mandates. This is the time to innovate and stay in business or otherwise close shop forever.
There are businesses that sell their goods and services on credit. They are, therefore, owed 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 so 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 be 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 has issued instructions to commercial banks to undertake loan restructuring for business that can prove that due to the Covid-19 pandemic they are not able to operate and generate revenue. Businesses should provide evidence to this effect.
Businesses should analyze their liabilities and make strategic decisions on how to cater for them in the next 90 days.
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 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 which 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 a suitable payment plan 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 consumption of electricity and water. The business should analyze all its liabilities and make strategic decisions on how to cater for them in the next 90 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. This 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. These 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 those that shall thrive and take an upward trajectory; t while other business will emerge and stand the test of time. This will 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.