Planning ahead to protect your business against coronavirus
Businesses will be keen to ensure that their staff, supply chain and customers are protected as much as possible from the impact of coronavirus (COVID-19). With the Government estimating that up to 20% of the workforce could be off at any one time, coupled with decreased demand from customers and supply chain disruption, ensuring you prepare and maintain effective plans will enable your business to be as resilient as possible. So what should you do?
The COVID-19 pandemic is a fast-moving issue, so it’s important to keep up to date with the latest Government advice and support for individuals and businesses and adjust your plans accordingly: See the latest Government advice on COVID-19. There is also advice for employers and businesses.
What is possible will depend upon the nature of your business and your level of exposure to disruption caused by the virus. The plan should cover all possible risks including supply chain disruption, reduction in workforce due to illness and school closures and service delivery capability. Consult regularly with your teams so you fully understand what they are seeing ‘on the ground’ and what impacts they are anticipating. Some points to consider include:
- What would happen if you had to close your business for a period and how will that affect your cash flow?
- Have you tested the ability to set up remote working, both in terms of network capacity and whether you have sufficient hardware to ensure staff have access to everything they may need such as laptops and mobile printers?
- What would happen if customers buy less, start cancelling orders or there are enforced business closures or quarantined areas?
- What happens if you have equipment breakdown?
- Would you be able to take on freelancers or casuals to fill in gaps?
- Can people be reassigned temporarily to different tasks and will extra training be required?
- How might coronavirus affect your customers and what knock-on effect might that have on you? For example, if you work with other small businesses and their accounts team is sick and you don’t get paid at the agreed time.
- What would happen if a key member of staff was to become seriously ill? Who would take charge of business operations in the event that the senior team became unwell?
- Have you got events planned that you are holding or attending? What will happen if you have to cancel or postpone or the organiser cancels?
- Will there be a financial cost to postponing or cancelling overseas buying or selling trips given the current limit on travel outside of the UK?
- How will you communicate with customers if you need to close your business temporarily or operate differently in a way that will affect them?
Once developed, the plan should be communicated to key individuals or teams in your business. Read our guide on how to build a contingency plan.
Employees’ health and wellbeing should be a top priority during this time. Not only do employers have a duty of care towards their employees, but employees may also be concerned about virus-related risks and seek reassurance from their employers. In order to support your staff:
- Make sure all your staff are aware of the latest health advice to avoid spreading or catching the virus. Ensure this information is easily accessible and covers basic hygiene measures such as increased hand washing, not travelling unless essential and avoiding direct contact with people who may have come into contact with the virus. See the NHS advice on avoiding catching and spreading COVID-19. And download handwashing leaflets and posters for your workplace.
- Don’t forget that as well as the illness itself, both you and your staff may also be facing anxiety and mental health issues, worrying about their family, money and how to cope while others may be overworking. It could be useful to share reliable sources of help such as the World Health Organization’s Mental Health Considerations during COVID-19 Outbreak and the BBC’s summary of expert mental health advice.
- Ensure that staff are aware of, and can easily access, company policies relating to time off ill, parental leave or emergency absence. Consider whether you need to create any new policies to help manage the impact of COVID -19 on your workforce.
- If you are aware of any employee for whom the virus maybe high risk, undertake a risk assessment and implement a plan to protect those individuals. Bear in mind, for example, the Government recommendations for at risk groups such as pregnant women being advised to limit social contact.
- Maintain an action plan about what to do if one of your employees suspects they have COVID-19 or may have come into contact with someone who does.
- Develop a flexible resourcing strategy. If a significant proportion of your workforce are impacted, alternative resourcing solutions will need to be considered. This may include:
- Increasing the level of homeworking within your organisation.
- Using technology to limit direct contact e.g. video conferencing.
- Identifying business critical projects or functions and prioritising resource for these.
- Adjusting working patterns of available employees to ensure continuity of service.
COVID-19 presents a significant potential threat to supply chains, which in turn can have a sizeable impact on a business's cashflow. Businesses that use products made in or supplied from China, Italy or other hard hit countries could find severe disruption in production, supply and distribution which may continue into the long term:
- Identify the key dependencies across your supply chain and plan for alternative scenarios as soon as possible.
- Talk to your suppliers to better understand their plans and whether they inadvertently expose you to any potential risks such as raw materials, goods or services not being supplied to schedule.
- Be aware of your contractual obligations and agreements, and how these may affect your business in the event of supply chain disruption.
There are a number of steps you can take as a business to manage your financial risk exposure during the pandemic, as well as a number of additional support measures that have been announced in recent days:
- Re-evaluate any business forecasts and adjust them so that you understand what the total impact may be.
- Be aware of your cash flow forecasts – fixed costs such as wages, rent and utility bills may remain while income will likely be impacted, so consider how to tackle shortfalls.
- Make sure you fully understand the help that is available to you and what you need to do to access that help, from rate relief to recovering Statutory Sick Pay from the Government. Since the 2020 March Budget which offered £12bn in support to companies the Government has also promised a £330bn lifeline for business equivalent to 15% of GDP. The help comes in the form of aid, Government-backed loans or credit on attractive terms to help businesses that need access to cash to pay their rent, their salaries, suppliers or purchase stock. Local authorities also have money that they can offer as grants – so talk to your local council. The Chancellor said small businesses could be eligible for grants of between £10,000 to £25,000.
- Talk to your bank. From increasing overdraft limits to invoice financing, banks can provide a number of solutions to help ease pressure on cashflow during this time.
We are committed to protecting our small business customers from the impacts of the coronavirus and have therefore introduced a £2bn package to help minimise disruption over the coming weeks and months. For more information on the support available please visit our coronavirus business information page.
All lending is subject to status.
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