The reality of COVID19 has finally hit us hard. It has now hit more than 195 countries and the total case number stands at more than 400000 . Its impact on businesses (irrespective of scale) is immense. News of job cuts, pay cuts have already started to pour in from all corners of the world. Businesses are worried about survival. Although it is largely dependent on industry, sector and business, we tried to jot down some tips which might be useful for everyone
Monitor and Forecast your cash flow diligently
Cash is King. As much as this is cliched, this is more relevant today than any other time. For businesses to survive, you will need cash. Keep your financial statements up to date. Cash flow statements would be more useful to assess cash in hand. Forecast the expenditures and working capital requirements for at-least an year. This will help you to be better prepared. Even if the markets open up, it will take 6-12 months for things to get normal in most industries.
Get Aggressive with Collections
While some might understand the impact on business now, some might do it later. If you have any pending payments, it is better to collect now. Keep pushing because as time passes, the chances of the payments getting collected are only going to decrease, at-least in near future. Clients are likely to clear payments first for those who are calling often.
Don’t stop looking for new business. Instead, put more effort.
While the general sentiment is that there is less or no business, it’s not the right time to not look out for newer opportunities, aggressively. Most of your competitors might make peace with this time and get slowed down on looking out. This is the perfect time to look out more for even the most minute chance available. Remember, do not sell your product or service, sell a solution. With Empathy.
Firing is Obvious. Rather build a culture of thriving in crisis
Firing is the most obvious solution. It is not the best as we think. You made a lot of effort finding someone who can adapt to your culture, train that person, make that person deliver as per your expectations. Now when a crisis comes, you will fire only to repeat the same process again with someone new when the sun rises again.
Our recommendation is not to fire unless there is any other alternative because
a) In this lean time only quality and quick response will survive
b) Creates an atmosphere of uncertainty in the team
c) Will raise question on your leadership
While you look for more business, ask people to take more duties. Make them understand that these are crisis times, we are in it together and we will pass through. Involving them for policy level inputs on dealing with this is not a bad idea either.
Uncover old contacts, rebuild relationships. Strengthen relationships.
These are unusual times. We don’t prepare for this often. It’s time to remove the dust from your old visiting card holder or scroll the contact list on your phone to reconnect with some old pals. You might not know who becomes your angel at this time. Key point, don’t straightaway ask for help. Listen, empathise, re-invest in relationships.