It is important to act flexibly and decisively — what should the business do in today’s conditions
The COVID-19 pandemic is pushing the world economy into a deep recession. According to forecasts of the International Monetary Fund, the consequences of the crisis in 2020 may be heavier than ever before. Coronacrisis is already stifling markets, blocking countries, and, according to the World labor organization, could take away 25 million jobs.
Large companies with a global reputation are disrupted supply chains, production stops, small businesses, and even found themselves on the verge of survival. We all understand that when the global quarantine ends, it will take entrepreneurs months, if not years, to deal with its consequences.
Our business, like everyone else, faced challenges. However, we know that difficult times will be experienced by those companies that are already ready to act flexibly and decisively. Here are some personal tips for entrepreneurs on how to prepare a business for a crisis and come out of it a winner.
Create An Anti-Crisis Team
The conditions dictated to the world by “Coronacrisis” are too unpredictable, and Ukrainian business has felt this from the very first days. Some companies had to close down immediately, while others continue to operate even under quarantine.
In order to respond quickly to new challenges, create a multi-functional anti-crisis team within the company, assign roles, set clear tasks, and rules for interaction.
Such anti-crisis teams exist within each of our companies. Now their main goal is to provide the company with the same volume of orders, save jobs, and ensure labor safety for each employee.
The main task of such a team is to constantly monitor changes in the situation, objectively assess how the crisis may affect the company or its individual segments, and make a plan to get out of it.
Think Of A Plan “B”
Make a realistic anti-crisis plan based on facts, reliable calculations, and worst-case and best-case scenarios. No one knows how events will develop further, but your anti-crisis plan should take into account any turn.
For example, our crisis scenario models provide for a 20%, 50%, and 70% reduction in production. We hope that the most optimistic of them is being implemented, but we are also ready for the most pessimistic. We have worked out each model in detail, digitized it, made financial mistakes, and made an accurate plan of action.
If you already have such a plan, update it and review it as often as possible to track all the “blind spots” in the long and short term.
Be Flexible And Determined
Even if a business enters a crisis in good financial condition, it will inevitably have to revise its budgets in the new reality. The main factors of survival during a recession will be competent financial planning and readiness to respond quickly to changes.
Perform stress testing for your financial plans, optimize costs in each segment, create a reserve fund, and set aside all capital investments that are not aimed at maintaining the core of your business.
Keep track of the financial status of your suppliers, contractors, and clients that your income may depend on. Be ready to make difficult decisions at any time.
For example, “Kovalskaya” had to temporarily suspend the work of two of its 12 enterprises, redistributing the volume of orders and personnel to other plants. For us, this was the most difficult decision, but we do everything possible to maintain the optimal level of load, minimize costs, and not let any client down.
In times of crisis, entrepreneurs feel their responsibility especially acutely, so it is always unpleasant to reduce, stop production, and postpone the agreed deadlines. But only those companies that are already acting responsibly and decisively will survive difficult times.
Be Honest With Your Customers And Employees
Create an anti-crisis communication strategy for all stakeholders. Regardless of whether your company has suffered or not, try to look at the circumstances around you through the eyes of your client.
Most businesses are likely to experience disruptions and underperformance during the crisis. If you can’t cope with deadlines and deliveries, gather all the information about how the crisis affected your business, make a plan to get out of it, and show it to your partners. If you continue to meet your obligations in full, please also let your clients know.
For settings from the point of view of importance and significance is equivalent to customers. Therefore, we strive to ensure that every member of our four-thousand-strong team also understands the true essence of what is happening.
Inform your employees about the real state of things. This will keep their loyalty and trust in you as an employer. Make sure that your communication team delivers all the important messages inside and outside the organization on time. Remember that production and sales can be restored sooner or later if you keep your reputation and good name.
Transfer Sales To Online
Flexibility and ability to change modern business is measured by the ability to move all possible processes of the company online as quickly as possible. For many Ukrainian entrepreneurs, the development of digital tools in sales was only a long-term strategy until recently. Now this task has become a priority.
For example, even yesterday, such an opportunity as buying an apartment online seemed incredible to many. But since the beginning of the quarantine in the main business spots, many companies have switched to online consultations about real estate sales, viewing objects, and even the possibility of remote signing of documents.
Take Care Of Your Team
One of the most important things you have to do as a manager during a crisis is to support your team.
Even if you kept your staff and didn’t have to cut your payroll, your employees are still under strain. Uncertainty weighs on them, as it does on all people in our world. Disturbing news and forecasts that come from everywhere can affect their health, performance, and health.
The main asset of any business is your people. Maintain team spirit, even if the team is working remotely, and share your success. Become an example, motivation, and support for the team.
Remember that any crisis for an entrepreneur is not only a challenge and test but also an opportunity to become stronger and more resilient.
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