How to mitigate the economic effects of Covid-19 on your business

As the pandemic continues to spread, and the DOW and the FTSE experience their biggest falls since 1987, we are increasingly facing a significant economic fallout.

This is likely to create great financial consequences for businesses around the globe. A recent study by the ONS has shown that an incredible 24% of UK businesses surveyed had temporarily stopped their business services or closed. Of the businesses questioned who have continued their services, 93% have already reported their turnover lower since the onset of the pandemic.

While the most impacted sectors seem to be in travel and manufacturing, all industries should be prepared for the greater implications of disrupted business operations, and the likelihood of a recession.

We dive deeper into how to reduce the economic impact of Covid-19 on your business.

Review your financial processes

Perhaps the most significant area of your business to review is your financial processes. There are several measures that you can take to reduce risk in your business, during such fiscal uncertainty.

• The first step of the process would be to conduct extensive analysis of the current and potential operational and financial impacts of Covid-19 on your business.
• This includes a comprehensive review of your cash flow forecasts, to discern areas where cash can be maintained for the short-term.
• You may need to consider adapting your supply chain. To ensure that your chain of business operations is still intact, it may be necessary to find alternative suppliers if your key suppliers are liable to risk in this uncertain period.
• It’s then essential to continuously review your business operations and finances, so that you can adjust plans accordingly. In such a changeable time, it’s crucial to have a robust, yet flexible plan in place, in order that it can adapt to unpredictable issues.
• If the pandemic continues into your medium-term plans, and liquidation could be on the horizon, turn to options such as mergers, leases, and credit instruments. It’s always advisable to consult financial services providers, as they can provide you with a range of options applicable to your particular situation.
• While reviewing your own processes and financial situation, it’s also worth exploring government support measures that you may be eligible for. The UK government has dramatically increased funding and lessened restrictive measures to help companies stay afloat in these unprecedented times. You may be entitled to government grant funding, business rate holidays, and you can also benefit from the Coronavirus Job Retention Scheme to keep your employees in jobs.

For more information on this, consult the financial support page on the government website.

Work with your employees

To ensure business continuity, productivity, and efficiency, it’s crucial to keep an open line of communication with everyone that you are working with.

• Wherever you can, set up your employees to work from home. In doing so, ensure that they have everything that they need in place to continue to work effectively. With the right hardware, software, and access to information, you can keep some sense of normality intact, essential for business continuity.
• With the majority of your workforce working from home, ensure that these systems encompass antimalware software, to protect your company’s data. Particularly if employees are using their own devices for work purposes, you’ll need to ensure that all devices are best protected from cyber threats, and that your workforce are well trained on how to detect and prevent malware attacks.

Read on for more on how to mitigate cybersecurity threats while working remotely.

• Not only is it important to ensure that your employees have the equipment they need, but also all of the tools and resources necessary to keep your employees well and working efficiently. Implement processes which help employees manage worry and anxiety, in such a stress inducing situation. Whether it simply be an open line of clear and consistent communication, a more compassionate leadership approach, or even resources such as online meditation and exercise courses, your employees’ health and happiness is the engine driving your business.

Implement a Business Continuity Plan

A business continuity plan is an essential part of your strategic toolkit. Put in place to mitigate the effects of any natural disasters, technical incidents or economic fallouts, it is absolutely critical for the current global pandemic. A business continuity plan sets out a systematic and comprehensive set of processes to prevent, protect and prepare businesses for their continuity, as well as recovery during an incident.

If you already have a business continuity plan in place, make sure to adapt your procedures in line with World Health Organization (WHO) and UK government guidelines.

For guidance on implementing a business continuity plan, and advice on enhancing an existing one, work towards the ISO 22301 certification. The ISO 22301 standard provides a framework to help you create or improve your business continuity plan, as well as enhance resilience and minimise disruptions to business performance in this period of uncertainty.

While the pandemic’s consequences are largely unpredictable at this stage, you can ensure that you have a clear plan in place to significantly mitigate financial risks to your business. Ensure that this plan is resilient, yet adaptable, and reviewed on a frequent basis.

To find out more about an effective business continuity plan strategy and the ISO 22301 certification, you can request a free consultation with one of IMSM’s experts here.