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Coronavirus necessitates new ways of doing business

Article by Riaan Petersen (Head of Business Banking Segment Solutions, Absa Retail and Business Bank)

Governments across the world are taking drastic measures to reduce the spread of COVID-19. At the time of writing this article, the virus affected 199 countries and territories, 536.6k confirmed cases, 24.1k deaths and 124.4k recoveries. There are now more than 2,400 confirmed cases of COVID-19 across Africa and growing warnings that the pandemic will cause major challenges for the continent’s under-resourced health services.

We are bombarded with statistics and opinions about the disastrous impact of the disease on economies, stock markets and of course humanity as we know it. Panic sets in and we find ourselves behaving irrationally and making uninformed short term decisions that could potentially harm your health, investments and the sustainability of your business.  

The operating environment for businesses are tough and further exacerbated by countrywide lockdown periods, which many countries have enforced as a means to flatten the curve. We need to stay calm and take fast action to focus on matters that are in your control to build and maintain resilience. We’ve compiled a guide on considerations and best practices companies and human resources departments should adopt in earnest:

Your employees and ways of work

Constant and effective communication with your employees is essential. See the wood from the trees though – steer clear from non-factual information and opportunists.

Depending on the in-country policies and guidelines, the following are logical and universally applied pre-cautionary measures for you to adopt in your business:

  • implement flexible working arrangements or Business Continuity Protocols
  • minimize human contact by leveraging technology during work-from-home days
  • adjust leave policies
  • rotate critical staff to ensure continuity and to minimize infection
  • minimise business travel – use technology to conduct meetings 
  • if someone becomes unwell in the workplace with a new, continuous cough or a high temperature, they should be sent home and advised to follow the advice to stay at home
  • employees should be reminded to wash their hands for 20 seconds more frequently and catch coughs and sneezes in tissues
  • frequently clean and disinfect objects and surfaces that are touched regularly, using your standard cleaning products

Communicate and engage with your customers

Customers are, of course, the reason why you are in business and will continue to have needs to be serviced, therefore develop a communication plan with your key messages and updates on the steps your business has taken to protect them from exposure to the virus as and when they engage with your business. Here are a few ideas on how to share them:

  • Update your website homepage
  • Update all of your business listings
  • Send an email to your subscribers
  • Post an update on your social media channels.

Finally, if you have a physical location, put up signage in your storefront with the same information on the precautions you are taking.

Ensure business continuity and start planning for various scenarios

Ready yourself for supply chain disruption. Make sure you have a clear plan with your suppliers and understand similar challenges they are facing due to disruption in global supply and manufacturing outputs. If possible and whether this is in your means to do so, consider using alternate suppliers or perhaps even provide substitute products from areas where infection rates have stabilized. 

Given the potential constraint on sales and margins, you have to be more vigilant on managing day-to-day costs and spending. Work towards gaining an acute understanding of your current cash flow situation, but more importantly conduct regular cash flow forecasts in an effort to understand supply and demand dynamics, which could inform your pricing strategy and ultimately your margins.

Invest in a good accounting package to forecast cash flows accurately and software that allows for effective quoting, invoicing and receipting. Become more stringent on when invoices are due to be paid, credit notes are due to be refunded and how recurring income and expenses are tracked and managed. 

Innovate and diversify your business model

We can only expect consumer buying behavior to morph from a state of touching, feeling and experiencing in the traditional bricks-and-mortar format to one that requires minimal human contact. The extent to which this will happen is not yet fully understood and appreciated, but we can only assume that e-commerce and delivery services will be on the rise. Invest in and explore setting your business up to accommodate online ordering, purchasing and fulfillment if plausible.        

Reassess your business insurance

Now is the time to check your business insurance policy. Does it cover business disruption in the event of an outbreak of a virus? Best you speak to your insurance provider to iron out the terms and conditions of your existing cover.

Absa is a proud Partner of the NSBC