how to use lessons learned from COVID-19
It may be tricky thinking about the future right now, but in time the economy will improve so it’s worthwhile to consider what steps you could put in place to prevent or reduce the impact of a repeat situation.
It’s not just for Covid-19 either, as there is always the possibility of a ‘black swan’ event (recession, natural disasters like floods or earthquakes, loss of a key customer or supplier).
Take these steps to permanently future-proof your business.
1. Check you have the right team
Now is a good time to ensure you have the right team. With employees self-managing you will see who you relied on the most, which skills were missing (hire them in) and which did you not need (remove them).
You may have also found certain staff work better from home. Keep them remote if they’re not needed for direct customer contact production. This could reduce office costs.
2. Remove bottlenecks
When you consider what you needed to make your business work in times of stress, identify any bottlenecks or issues - such as one key customer for most of your revenue or one major supplier for the majority of your raw materials or supplies.
Other actions you can take include:
- Reduce the length of your supply network or at least have alternatives that don’t require materials to come from outside the country or state
- Identify any critical supplies, raw materials or ingredients and have an extra month of inventory (without unnecessary stockpiling) to keep you going if supply suddenly ceased
- Document any lessons learned that will help you run a better business and then implement
3. Seek wider insight
It’s often in times like these that you’ll find you can’t do it all on your own. Identify who you can call on to gain advice about growth and future strategies. Some sources include:
- Trusted advisors such as your attorney, accountant, banker or mentor
- Market research feedback from your customers, your suppliers and other stakeholders
- Speaking to other small business owners
- Up-to-date information on your industry including research and development breakthroughs, particularly on what your competitors are doing
4. Update a one-page SWOT plan every quarter
Most businesses either don’t write a business plan or create it once and then never touch it again. To keep ahead it's better to have a plan that you review on a regular basis during which you look at the most critical questions including:
- Strengths: what you’re good at and what you’re doing to protect these things from competitors
- Weaknesses: what isn’t quite working that well and ways to eliminate them
- Opportunities: what new products, services, customers, markets, technology, or trends could change the way your business works
- Threats: the events outside your control that you need to mitigate
5. Focus on cash flow
If the current crisis has taught us anything, it’s the importance of having enough cash reserves without having to close the doors to outlast a dramatic fall in sales. Decide how much working capital you need and then outline where this may come from when you really need it (business savings, access to loans or your own capital).
Need help planning ahead? Don’t hesitate to reach out to one of our business relationship managers.