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Preparing for a changed world
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.”William Pollard
It is undeniable that Covid-19 has, is and will continue to have, a significant impact on all our lives – personally, professionally and in business. Some industries and businesses will close their doors. Some businesses may be able to weather the storm depending on their commitments over the next 6-12 months and the ability to negotiate and navigate through this. If you are one of these businesses who believe they can survive, other than negotiating commitments, and utilising available government assistance, what else should you be doing with your time?
What we are facing with Covid-19 is unprecedented, and therefore uncertainty is high. No one really knows what the lasting effects will be, and for how long they may last. New Zealand seems to be on track to recover faster than many other nations, however we are reliant on trade, and due to the global nature of this pandemic, the global recovery has significant impact on NZ businesses.
Despite the uncertainty, there are some things that businesses can start thinking about.
What will post Covid-19 look like for your business product/service?
Lockdown period consumption changes, impact on people’s financial situations, and an uncertain future may have changed spending habits of your customers. It is likely that majority of people and businesses will focus on essentials and avoid discretionary spend. How will your business respond to a changing customer? What can you do to prepare for this? Consider what products/services may be more relevant and how much you can shift focus. Consider how you market and retain loyal customers.
This may require more of a broad view of your market, your product, your business model and adoption of more of a long term rather than short term outlook.
Maintain communication with essential supply chain
When cash is limited, you need to consider what commitments can be negotiated. Try and pay your essential supply chain at least enough to ensure they can continue to operate. Communication channels must be maintained with all essential suppliers.
Concentration of Supply
Many NZ businesses rely on overseas supply or have concentration of supply. Consider investigating options for local/additional suppliers which you can maintain at some level. This may not be now, but when you are more able.
Look after and maintain your key employees
Consider who your key employees are that will be required to take you through the post lockdown recovery. These will include employees that can execute on some of the other initiatives mentioned in this article if these are applicable (so may not be those employees traditionally considered critical). The additional critical qualities you may wish to look for are driven, optimistic, innovative and tech savvy employees who can execute. If government assistance is not enough, there are other ways you can individually negotiate terms with employees to keep them employed and engaged.
The adage ‘cash is king’ has become so relevant through this experience. It is a lesson to retain a level of cash/liquidity you may normally not have done historically. This may mean taking more of a balanced and long-term view for level of business reinvestment, or in the case of SMEs, reconsideration of the conversion of business cashflow to fund personal/lifestyle consumption.
Consider long term cashflow forecasting and monitoring this on a monthly or at least a quarterly basis as an essential planning tool.
Some businesses and employees would have been forced into this due to the lockdown and pre lockdown periods. It may have been a period of realisation that this works or consideration on how it could work better. If your systems are not cloud enabled or remote access enabled, it may be a time to consider this.
Meetings both with employees and clients are being carried out over Zoom or similar video conferencing tools. This highlights the ease of being able to ‘meet’, catch up or network remotely which opens geographical boundaries both domestically and Internationally, and can increase efficiency (both cost and time) of getting things done without the need for travel.
Remote working may lead to consideration on the type of premises you need going forward (i.e. size, location and period).
Consider if your marketing could benefit from more of a digital presence, and what would be most effective for your specific business.
When unable to see your customers, there needs to be a way to keep front of mind with them, and to be able to communicate.
Consider if you can operate online if required (if you are not already). Being set up for this is useful in these kinds of situations; and there is the potential that many consumers would have been forced to get on board with this type of trading through this experience.
One thing is certain, a post Covid world will be changed one, and viable businesses should be preparing for this change now. We urge you to be proactive in considering the above along with anything else that may be relevant to your specific situation. We are happy to help in any way we can, so please do not hesitate to contact us.