Don’t let the virus kill your business
As of the time of writing there’s a lot of business disruption in Hong Kong and around Asia because of Covid-19 also known as the Corona Virus. Current mortality rate seems to be about 2.5% which is significant but not the purpose of this article. It is an unfortunate situation that in places such as Hong Kong and Singapore there may be more businesses that are killed because of this virus than people.
Whilst societies have gone into protection mode to ensure the safe well being of friends and loved ones the real sufferers here, outside of those who caught the virus, are small and medium sized businesses.
How Would it Affect Businesses
People are working from home, not going out shopping except for essentials, not going to restaurants to eat, not travelling overseas unless essential and not staying at hotels in case they get quarantined inside one.
All of these lead to businesses in all sectors suffering from a significant downturn in business which is only going to get worse over the next few months.
So how do you protect your business and ensure it does not die because of the Virus. Here are our 10 ways:-
10 Ways to prepare your business from a virus outbreak
- Prepare for the worst. Hopefully it never happens but what if you need to scale back? Do you know what expenses you need to cut? Will you give everyone a pay cut or will you terminate some employees contracts? Do you know which employees to let go first? You need to ensure you have a documented plan that you can follow that you and your managers have all agreed on prior to implementing. That way it can be discussed calmly and in a focused way.
- Help your employees. Offer the opportunity to work from home if possible. Be flexible on working hours. Have conference calls instead of face to face meetings. With schools closed etc give consideration to those employees with children. Pay attention to those employees who need to travel long distances to work. Remember your employees come first and foremost in any business so make sure you keep them happy even in times like this.
- Help your business. If necessary, reduce working hours. Give staff extended time off. Consider implementing unpaid leave. Ask if any staff would like to take their annual leave now rather than later in the year. Make sure you have legal advice on these options to ensure you are within the law. Consider modifying your product or service offering. Is there something you can do to make your offering more relevant for the current situation. An example of this is with no-one eating at hot pot restaurants in Hong Kong one innovative restaurant has started offering full service hot pot solutions delivered to your home.
- Speak to your landlord. Assuming you don’t own your office speak to your landlord and see if you can get a reduction in rent or a deferred payment for a few months. You may be surprised how accommodating the landlord will be.
- Review your clients. Go through your client list and see which ones you think are ok and less likely to be impacted. See if there are any where your relationship is not as strong or you think their business may be affected. Talk to these clients and see if there is anyway you can help. Do you need to change the contract you have in place with these customers for the short term. Clients will appreciate this flexibility from you.
- Talk to your creditors. Look at your accounts receivables and make sure to keep on top of anyone not paying. Talk to them to see if they can agree when to pay. If they are struggling offer them a payment structure where maybe they pay a little more if they pay over a longer period. A client that goes bankrupt is unlikely to ever pay you so it is in your interest to help where possible.
- Talk to your vendors. Look at your vendor list and see if you can negotiate payment terms with them so you can pay them a little later. From 30 to 45 days for example. It all helps.
- Talk to your banks. If you have any loans with banks see if you can pay interest only or defer payments. They may accommodate you especially if there are schemes in place from the government as there are in HK. Make sure you have sufficient credit and overdraft facilities before you need them. Banks are unlikely to give this to you when you are desperate so get it before you need it.
- Look for relief measures. In times of crisis there are often relief measures implemented by governments or the private sector to help SME’s. See if any are applicable and apply for them.
- You cant over communicate. You will see with the above 9 points that many of them refer to talking or communicating. This is critical in any times of difficulty. The more you communicate the more people understand your true situation. Companies that do not communicate are often considered to be hiding something bad.
Implement the above 10 points the best you can and you will give your business a fighting chance of not succumbing to the virus. I wish you, your family and friends as well as your businesses the best during these difficult times.
If you have a business in Hong Kong or Singapore and would like to discuss any of these points in more detail or in fact ask me for any advice please contact us at firstname.lastname@example.org.
Written By : Phil Aldridge