Coronavirus has already had a devastating effect on firms across the globe. As the crisis continues to develop, how businesses respond now is the difference between weathering the storm and sinking the ship.
A distinctive feature of enduring companies is the way their leaders manage crises in times like these. False optimism and actions that arise from panic are not your friends. Bold decisions and contingency plans are.
Recovery will be a slow (and likely, frustrating) process. Ultimately, no one knows how long the country will take to contain the outbreak. However, we’re sure you’ll agree that flexible businesses are likely to fare best. In the words of Darwin, survivors “are not the strongest or the most intelligent, but the most adaptable to change.” Here are some measures that business owners can take to mitigate the effects of the crisis:
More efficient tax models
During global uncertainties, more agile tax models are needed. Minimising taxable income, obtaining available refunds and reducing required tax payments will cut the amount of tax you’ll need to spend during a period where it might be hard for your business to cover these expenses.
Supply chain management
The ripple effects of the COVID-19 pandemic are likely to cause supply chain disruption in some way. If you operate on an international scale, you could identify alternative supply chain scenarios as periods of mass-disruption affect different territories.
Even if you don’t think your business is directly affected by the COVID-19 outbreak, the lockdown situation we are seeing is likely to cause people to change their spending habits en-masse. The whole playing field might change during the crisis and in its aftermath. The key is not to be caught flat-footed.
Crisis management and response
Your existing business continuity plans may not be adequate for an unanticipated crisis as fast-moving and unknown as COVID-19. As in all crisis situations, effective communication is essential. If you haven’t done so already, develop incident management and scenario plans that are specific to this crisis and make sure to regularly update important stakeholders.
Reassess capital spending
Look closely at your spending plans and assess whether they are still sensible in this changing environment. It could be that there is no reason to change plans. The changing situation may even present opportunities for your plans to accelerate. What’s important is that any action you take follows proper deliberation. Knee-jerk reactions often damage long-term prospects.