We all breathed a sigh of relief as 2020 came to an end and had everything crossed that 2021 would bring smoother sailing.
But now the dreaded words ‘Community Spread’ dominate the headlines again - It seems that we’re always just on the precipice of an alert level change.
There’s wide variation in just how badly COVID alert level changes hit small businesses, and much of it is sector dependent. For those in the travel and tourism, hospitality and entertainment sectors, the lack of clientele and the effects of social distancing can be devastating.
Exporters and businesses reliant on imported goods are already feeling the squeeze with supply chain and transport issues, which only get worse when regions - or a country - is locked down.
While it can be largely business-as-usual for information-based businesses and professional services firms, the disruption, uncertainty and distractions that lockdown brings can make a big dent in productivity, damage organisational culture, and make it hard to keep on top of everything that is happening.
Experts tell us that COVID is with us for the foreseeable future - and even a vaccine won’t be a quick fix, or a permanent one. So it’s incumbent on all of us to do what small business does best: accept the situation, adapt, and make practical moves to limit the impact as far as we can.
So how ready are you for another lockdown? What you’ll need to think about will depend on the kind of business you’re in, but here are some ideas we’re thinking about, and you should be, too:
Stay on top of cashflow - it can be hard to conserve cash, but cashflow is critical to weathering the disruption of another lockdown. Stay on top of your debtors, watch your expenditure and see whether there are ways to trim the fat.
Make sure your IT system is watertight - there’s been a noticeable increase in cyber-attacks over the past year, and it’s not just large businesses that are getting caught unawares. Remote working makes systems even more vulnerable, so make sure your software is up to date and you have good advice from an IT specialist on securing your systems, no matter where you or your staff are accessing them from.
Take a look at your online presence - is your website up to date? Is it easy for people to contact you, buy from you, track their purchases? Are there things you are doing manually that could be moved online to make them faster and more efficient and the experience better for your customers or clients? Are there new markets you could explore that are digitally driven? COVID has sparked big shifts not only in consumer behaviour, but in business-to-business interactions too - make sure you’re keeping up, because chances are good your competitors are.
If you have time - take a look at your internal systems - often when we are busy we ignore inefficiency. If you believe in your future, invest now in systems and processes that you can scale up easily when business returns. XERO is great for giving you this opportunity as functionality and subscription levels go up and down as you need them. Its Cashbook subscription is designed for small businesses, While the top end Premium package caters for larger ones, even those that trade internationally. The beautiful part is that you don’t need to replace your software and disrupt your processes as you grow.
Strengthen relationships and communities - lockdowns create isolation and distance, so it’s important to do whatever you can do to keep your customers, clients and staff close. Whether it’s upping your social media presence, creating a digital newsletter with genuinely useful information, or scheduling regular remote check-ins with the people who matter to your business, there are things you can do to keep those relationships going. Keep talking to your OneTeam advisors as they are up to date with the business environment, opportunities and pitfalls.
Know where to go for help - the government has already detailed the support small businesses will get if there is an alert level shift. The eligibility criteria has changed, but there are a number of measures that will come into effect this month, including a new Resurgence Support Payment that kicks in if we’re at level 2 for a week or more, Short Term Absence payments to cover staff waiting at home for COVID test results, the Small Business Loan scheme, Wage Subsidies and now an expansion to the Flexi Wage scheme.
Think outside the existing model - so many businesses have taken the disruption of COVID as an opportunity to reduce their dependence upon a business sector or client or industry. Is this an opportunity to embrace change and opportunity?
Minimise your risk - protect your assets and the wealth that you have already accumulated. The only certainty is uncertainty - lock up your assets and protect your family with the right structures.
Other sources of help:
Budgeting and Cashflow planning - your OneTeam advisor can help you take a look at the books, create a forecast, preempt any looming financial risks, and make a plan to grow the resilience of your business. You may be eligible for some or all of the costs to be covered under the Regional Business Partners programme - talk with your OneTeam advisor for more information.
Your bank - It’s important to be in touch with your bank through these times. They need to be approached early and kept up to date with your plans and forecasts. The good news is that if you own property it’s likely gone up in value over the past 12 months, and so may be a source of working capital, should the business require it.
Government funding - as they have in the past, the government will be providing financial support to small businesses in the event of alert level rises. Details can be found here.
Other Professional Advisors - your lawyer, your business coach, your marketing guru, your HR specialist. OneTeam has access to qualified resources if you don't have these at hand.