At present, we are being impacted by the Coronavirus. A few months ago it was drought and bushfires and not so long ago floods. There is always something out there to impact on business. Sometimes we can be challenged by a change in policy, a competitor setting up over the road from us, or perhaps a product scare. In business, to be smart there are a few things you should be doing to constantly mitigate your risk and threats to your business. Here are some of my tips, borne of 30+ years of experience helping Australian businesses and business coaching. No, this is not a blog on where to find a secret stash of toilet paper.
Coronavirus and Other Business Risks
Plan in Advance
We won’t always see something coming our way, but for most things we can plan. For those of you in business, especially small business, have you done a risk assessment recently for your business and identified potential threats? The threats (which are usually out of our control) can be unlikely or varying levels of likely. In Australia, war is unlikely, but a summer thunderstorm is highly likely. That’s why you should have surge protection power boards for all your electrical equipment.
So once you’ve identified the possible risks, then it’s as important to devise and implement plans (in advance) to reduce, remove or certainly mitigate those risks. If having your computer system hacked could be perilous, then what are you doing to protect your systems? The important thing here is to identify the potential problem and have a plan in place to handle it. If one of your critical staff was sick (say with a virus that they had to be self-quarantined for two weeks), would that mean that your business would come to a crashing halt? Does that mean that your payroll or bills can’t get paid? Does that mean leads won’t be handled? What about decisions being made? What if that person is YOU and the entire business revolve around you? If the answer to any of these questions is yes, then what can you plan in advance to reduce that particular risk? Planning always works so much better when it’s done in advance before there is an issue. It’s called being proactive, rather than reactive. Lose the mentality “it will never happen to me!”
I’m a big fan of diversification and not having all your eggs in one basket. Reading or listening to the news this week, a few of our Universities are, well, concerned. A good portion of their students are from China and they won’t be likely making semester one. Having a high contingent of students from one location has ‘put all their eggs in one basket’. Having all your clients or customers from one industry, region or group means that you can be positively or negatively impacted by things out of your control. There are absolute benefits to niching, but a lack of diversification is not a positive to niching. The same can be said for working in a certain currency. If the dollar goes up or down, that can have a huge impact on pricing and costs. Look at the businesses which have all their marketing in one stream. Imagine their website goes down or their Facebook account is frozen and that method is their only source of leads? Well, that’s a problem which will certainly keep you awake at night.
Cash for a rainy day
As a business coach, I’m regularly asking clients if they have a savings plan and money set aside for a rainy day. Some do, but many do not. That ‘rainy day’ may come in the form of a seasonal low, an illness for the business owner, a disaster, or the Coronavirus which is affecting businesses in many ways. It may be that you will have staff sick and will need to pay their sick leave, plus employ a temp to do their job. It might be simply that sales will be down for a period of time and the income is not there. One thing people sometimes forget to save for is their tax bill. What if a large client of yours goes bankrupt and you’re likely to never see the money? Will that be enough to send you into financial distress? We all need to plan for the worse, hope for the best and take what comes in between.
We never want to be carrying so much stock that our money is tied up, however, we also cannot afford to run out of critical stock. If there is a particular item, part, product which is critical to your business, then make sure you always have sufficient stock on hand. I know at present a number of solar panel businesses are struggling because they get stock out of China. Sure, some have been smart and have a bit of a stockpile. This time it’s Coronavirus, but it could be custom holdups, transit delays, bad weather or a lost shipment. Sh*t happens and you need to be prepared for that as much as possible.
Limiting Errors or Mistakes
More of an internal risk is errors or mistakes made by you or your team. Yes, often there is insurance for this, but you also need to try and reduce the risk by having a clear and documented system or process. Checklists and systems will help deliver a better customer service experience. This system or process should ensure consistency and reliability or service. You need to ensure your staff are inducted, trained and reminded on this process. You need to monitor the system that it’s happening and that if necessary it’s updated to handle changes in the business. You want to ensure the culture of the business and its attitude towards preparedness and prevention of issues is strong within the team – which often means cultivating a ‘care factor’ with your team.
Tips to Employers Specifically re Coronavirus
Here are some specific tips for employers:
- Train staff around washing hands as you enter the business, before eating, after using the toilet and reinforce this with lots of large ‘in your face’ signs
- Provide hand sanitizer and disinfectant wipes for team
- Reduce or cut out travel and face to face meetings; go Zoom or similar instead
- Re-educate that handshaking at present is not wise and should be avoided
- Position desks at least 2 metres apart
- Ensure sick staff do not come to work
- Avoid attending in-person large group gatherings like conferences or workshops
- Encourage where possible that teamwork from home and endeavour to facilitate this
- Allow for varied start and finish hours so public transport is not being used by staff at peak times
- Stop hot-desking and ensure there is no phone handset sharing.
So, you’ve read this article and thought, yeah there are a few things we should be doing especially now with the coronavirus outbreak. The next important step is to take action. Firstly, identify the risks in your business, then grade them according to the likelihood of that happening and then put in place a plan to reduce, mitigate or if possible completely remove that risk. Remember in business there are five main areas of risk:
- Strategic – which includes marketing risk, change management, competitive risk etc.
- Compliance – everything from the ATO tax requirements to licensing and more
- Operational Risk – all aspects of the business cycle
- Financial – cash flow, budgets, bad debts, bankruptcy etc
- Reputational – ranging from a poor online review to a full-out “60 Minutes” expose.
If you need any help or would like to talk to me about my Crisis Business Coaching, please give me a call on 0411 622 666. Till then, stay healthy! May we all be safe against coronavirus.