It’s clear at this point that the coronavirus epidemic will impact your business.
Supply chains are disrupted, manufacturing is stalling, and purchasing has come to a near-standstillin some sectors. SMEs will be among the hardest hit by the economic turn but that’s not necessarily a death knell.
If you’re well-prepared and work on strong continuity planning measures, there’s no reason why you shouldn’t expect to weather this storm.
There’s still a lot of uncertainty going around, but here are some likely outcomes for your business.
Among the most affected sectors will be logistics and supply chains.
The Chinese economy sustained a gutshot that’s difficult to recover from. Partial shutdowns across the country will ripple out to almost every industry. Electronics, in particular, will be strongly affected by the interruption in supplies.
Apple contractor, Foxconn, was forced to partly shut down its production, which resulted in shortages of iPhone supplies.
But the supply chain interruptions won’t stop with companies that rely on Chinese goods. China was just the beginning.Now it’s apparent that the epidemic will have global ramifications.
Another important consequence of the epidemic is the loss of business which many are starting to experience. The travel industry is already heavily impacted on this front. In addition to general anxiety about travel, federal lockdowns are threatening to scuttle even large travel companies without substantial intervention.
Even conservative estimates place airline losses in the dozens of billions for the 2020 fiscal year.
Moreover, simple foot traffic is declining significantly as a consequence of social distancing guidelines. For many brick-and-mortar stores that means a large portion of their business is all but gone. Restaurants and retailers are especially vulnerable to this.
Businesses that rely on tourism are in the same boat. Since fewer people are traveling, tourism-based businesses have no reliable source of income. This has already caused significant unemployment and will likely lead to severe unemployment in some areas and for some time.
Workforce and staffing will also likely be impacted for most businesses. As the threat becomes more serious, businesses that can’t operate with a remote workforce are going to have trouble staying productive.
Even a short period of cessation could be enough to tank a small business.Therefore, it’s important to take any potential measures to prepare.
And all that doesn’t take into account the impacts of employees actually contracting the virus itself. Another important factor to consider.
School closuresleave many parents without a caregiver for their children. Female-dominated industries are likely to bear the brunt of that as more women are forced to stay home to take care of their kids. That will also translate to a reduced workforce and a general slowing of operational efficiency.
In spite of an aura of uncertainty, there are also some potentially positive consequences of the coronavirus outbreak.
Some industries are much better positioned to weather the outbreak. That doesn’t mean it won’t catch up to most businesses in the long run, but short-term boosts are predicted.
Consulting is an area likely to see an uptick in business. The sad fact is that very few businesses have great continuity planning in place for an event such as this. The lack of planning will send a lot of them running to consulting firms to figure out how to stay productive, revamp their marketing, and stay afloat through the crisis.
Digital media providers are also likely to see a boost in traffic. As more people are forced to stay in their homes, they’re more likely to seek out sources of entertainment. Digital media providers such as Netflix, Amazon Prime, and Hulu are in a great place to supply that demand.
The adoption of more digital media, along with recommendations by the WHO to avoid handling physical currency, could lead to increased adoption of cashless payments. The growth of eCommerce, in general, will also be a factor in this regard. eCommerce operations everywhere are well-positioned to reap the benefits of people staying indoors as much as possible.
As a small business owner, there’s also potentially good news in the form of easier access to cash advances and funding through government intervention too. Bills to support small businesses have beenpassedas the impact of the coronavirus crisis is being addressed at both the federal and state levels.
The Federal Reserve also cut rates by one percent and has announced it will take other monetary measures to relieve the severe stress on our financial system. These measuresare expected to make capital more easily available for businesses that need it to get through the slump. On March 6th, eight billion dollars of funding was made available.
What You Should Do
To make sure your business is prepared for upcoming events, there are several things you can do.
Remember that your most important resource is your people. Do whatever it takes to keep them safe, and if that means shutting your doors, that may be preferable to putting them in harm’s way.
Review your sick leave policies and make sure people aren’t afraid of losing their jobs if they need to stay home. Also, institute remote work policies for any operations that can be done remotely. Anything you can do to reduce contact between your employees is going to be a valuable measure.
Most importantly, make sure there are open lines of communication throughout the chain of command. The last thing you need is rumors and hearsay getting out of hand and causing more anxiety.
Tighten Your Belt, but Don’t Give Up
The impact on your business from the coronavirus epidemic is inevitable. But how you deal with it is under your control.
Focus on the things that you can do to manage the fallout. Create a strong business continuity plan, communicate with your employees, and use any available resources in terms of capital facilities.