Coronavirus: coping strategies for small businesses
As small businesses brace themselves for the full impact of Coronavirus, we’ve been finding out what they can do to stay afloat.
Many cafes, restaurants and shops are already suffering because fewer people are going out. But what happens if the government forces them to close, as has happened in Italy? And, if they stay open, what steps can they take to cope with the inevitable downturn in trade.
Below are seven strategies for coping with Corona.
1. Make a continuity plan, adapt your offering where possible.
Basil Fansa, a former government economist and founder of the Local Buyers Club, said: “Times are hard enough for independent businesses and some of the firms we’re hearing from say being forced to close even for a short period could be the final straw. Small businesses should act now – preparing for staffing issues, communicating with suppliers and customers, increasing their online presence, offering new products or services, if possible, that customers might now need.”
For those in the food and beverage industry you may find the following guide helpful:
It includes information on reducing risk and ways you might want to change your business operations to adapt.
Craig Beaumont, External Affairs Director for the Federation of Small Businesses, told the Local Buyers Club every business should think about their continuity plan and talk to suppliers and customers to find ways of adapting. Those that can, should prepare to work from home. Additional advice from the FSB here.
2. Check your insurance policy: are you covered for closure due to a ‘notifiable disease’?
Standard insurance policies don’t offer businesses any economic protection in the event of disease outbreak. But some commercial policies offer Business Interruption Cover for loss of income following a disaster – this was relied upon by businesses forced to close temporarily following the London Bridge terror attack.
The Government has declared COVID-19 a ‘notifiable disease’, so businesses which have this included as an insurance extension could be covered if the government advises them to close for a period.
3. Negotiate with your landlord and suppliers to temporarily ease business costs.
Some businesses are already negotiating rent free periods with landlords, putting large orders with suppliers on hold and spreading the costs of invoices to better manage cash flows.
Businesses need to have a clear picture of their cash flow and how a dip in revenue could impact their ability to pay invoices. Making predictions about what could happen will enable you to have frank discussions with suppliers, negotiating more flexible terms until things pick up.
Even if they remain open throughout this pandemic, most businesses face a temporary decline in custom and negotiating down operating costs during that period, will be essential.
4. Understand your supply chain.
Corona is a global crisis; if your product or service relies on parts or components from China, or other nations most impacted by the virus, you’ll need to explore alternative supply chains. You may need to scale back sale of some products and focus on others.
5. Freshen up your marketing.
Think of ways you can change customer behaviour until the crisis passes. Remind customers of the value small businesses bring to communities and highlight the ways your business is adapting to continue to best serve customers. If folks insist on stocking up – urge them to do it with you!
6. Prepare for staff shortages by cross training staff to manage other aspects of your business.
With the public urged to self isolate for coughs and flu-like symptoms, COVID-19 is already having an impact on staffing levels for many businesses. Now is a good time to make your employees more adaptable – so those who stay well can work effectively across different areas of your business, filling in when workers call in sick and preventing a decline in customer service.
7. Find out what government support is available.
In the recent budget the Chancellor unveiled a package of measures aimed at supporting businesses affected by the COVID-19 outbreak. These include Business Rate Relief for small businesses and pubs, small business grant funding and a Coronavirus Business Interruption Loan Scheme. Details HERE.
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