What can businesses learn from COVID-19 to come back stronger

The new work from home culture

Since the country entered lockdown the most notable impact on businesses has been the increased use of IT, remote working and online selling. The situation has forced many businesses, including our own, to allow (and encourage) employees to work from home. Previously there was some hesitation as to how well people could work from home. In reality with the right IT support and infrastructure many businesses can work well remotely.

Post lockdown we expect many businesses will continue to work from home, at least more frequently than pre lockdown. Many businesses in London are already planning for this and even stockbrokers and analyst are realising that working from home is not only possible but in some case preferable. The benefits can be significant and could include:

• saved travel time
• reduction of rent and rates (looking longer term)
• reduction of other overheads including heat and light
• positive impact on the environment.

Remote training and meetings have become more widespread and again seem to work well and reduce travel times and costs. Clearly some face to face meeting are necessary in order to properly engage with suppliers and customers but maybe going forwards we might think twice before driving for an hour to a meeting which could be done via a video conference?

For some this has been a wake-up call to bring forward those IT projects that were being planned and to improve IT systems and controls to aid remote working.

Disaster recovery planning

It was also a reminder that businesses should have a disaster recovery plan in place and ideally a financial buffer whether it be cash reserves or available finance facilities that can be drawn upon in an emergency.

Some of our clients are getting their books in order and dealing with compliance so that they are up-to-date and can focus on their business when lockdown ends. The advantage of this is it also allows you to use the results to produce forecasts for the coming months which will be essential as cash is likely to tighten and having good cashflow forecasts will allow you to plan for pinch points. Remember some of the government support that many businesses have utilised are simply deferring payments such as VAT and tax. It is important to factor in the payment of these and any CBIL/bounceback loan payments which will need to be made in the future, along with the interest after the initial interest free period.

Opportunities that have arisen

Business should also look for opportunities which exist now and that may be on the horizon, for example are there opportunities to merge or acquire other businesses for the good of the combined entity? Are there opportunities to sell more online? Are leases about to expire and if they are does the business really need the same size office or an office at all if home-working has been successful?

Innovating to adapt

Use your experiences, both good and bad, to form a plan for the future. I think it is highly likely that COVID-19 will be with us for a while or something similar could easily evolve. Record where you have found solutions and where your business has struggled, what would you have done in hindsight?

Be as inventive and innovative as possible, it has always been the case that the more agile a business can be, the longer it will endure and the stronger it will be compared to competitors in a time of crisis. Now is the time to review IT systems and improve them, this could be a great investment for the longevity of the business.

Utilise the current webinars to get up-to-date on technical matters and investigate what your competitors are doing. Now is also a good time to try using on-line platforms, webinars and other IT based solutions. If nothing else many businesses are trying these for the first time and customers will be far more forgiving if things do not go smoothly as you like. People are also spending more time indoors, looking at the internet which must be an opportunity for some to sell services or products.

However, one word of caution. Do not change too radically if you had a successful business pre-COVID-19, you should use the opportunity to evolve albeit an evolutionary jump caused by the circumstances imposed on the business. If your business was doing well before the crisis and you can get through the difficulties and learn from them you should have a good business in 12 months’ time, you ‘just’ need to manage your working capital and evolve as best you can and get ahead of your competitors.

Supply chain and customer base

The crisis has also taught us not to be over reliant on one supplier or customer, the more varied your customer base and the more diverse your supply chain the easier it is to adapt. Now is the time to consider this.

Also consider your supply chain and delivery systems. How can you make them more resilient and efficient? Can you use several carriers rather than rely on one? You will need to consider the cost savings that ‘bulk buying’ achieves compared to the cost of not being able to buy or supply goods. Also look at the geographic location of your suppliers- buying locally might not only be environmentally friendly, it might actually be the thing which keeps your business going in the event of future disruptions.

Marketing

Marketing is also important. Although traditionally this is the first area to be cut, if it is managed you may gain ground where your competitors lose out if your marketing is targeted.to reach your audience in the right way. This will be particularly important if there is the predicted ‘V’ shape recovery – you need to be in as strong a position as possible to make use of opportunities as we come out of the crisis. We have noticed lots of companies donating products to the NHS and advertising that they have done this. They may be well meaning, but they are also being shrewd as this is a form of marketing that gets their name in front of people and highlights their business in a positive way, as well as supporting a good cause.

In summary

Overall, monitor and make use of government support. If you can obtain support such as bounceback loans why not take it in case? Hold on to the cash in a ring-fenced account and pay it back when interest starts to accrue - giving you have a safety net which you can instantly access. Better to do this than stretch your suppliers and cause their businesses a problem while potentially damaging your relationship and endangering your supply chain. People will remember how you treated them during this crisis - if you caused them cashflow issues they may be less supportive next time you need help.

The uniqueness and speed of the pandemic has caused many problems for businesses but has also led to businesses developing new solutions to deal with issues and build resilience, perhaps leading to a leap in business evolution.

Find out more about effective business planning in the COVID-19 era by reading our latest insight.