The topic undoubtedly on everyone’s lips at the moment is the Coronavirus.
I don’t intend to add to the noise but if this develops in the UK anything like it has in Italy or in South Korea, then the effect of the pandemic on industry and the wider economy will be severe.
This is not about scaring the living daylights out of businesses, rather to consider the likely outcomes and try to be prepared as best we can – in particular for SMEs.
1. In the first instance, focus on the safety and well-being of your staff and colleagues. Follow any relevant Government advice and use common sense.
2. As in all crises, conserve cash initially in an effort to weather the immediate storm. I realise this has a knock-on effect on the economy as a whole as less money is in circulation, but there are certainly going to be redundancies and bankruptcies as a result of this pandemic.
Your job, for your business, is to limit the former and avoid the latter. Place the business on pilot light flame until you can figure out what’s likely to be happening in April/ May/ June in your industry.
If your business is heavily leveraged, talk to your bank – traditionally not that much use to SMEs – but they are being encouraged to relax debt repayments, at least in the interim.
3. The food and drink industry (where I come from) is likely to fare better than some others – think of the situation facing the tourism, hospitality and travel industries! Ultimately, people will still have to eat. At the moment, consumers seem focused on staples like dried pasta and canned goods. They are likely to soon tire of this however and return to their normal buying patterns.
4. Then do some scenario planning. Think through the likely positions come Summer when we are hopefully coming out of the first wave of disruption (like China appears to be now). What will likely have changed? What will you need to do to get back to where you were before all this happened? Will it ever be possible to get back there?
5. As with Brexit, with uncertainty comes opportunity. We may well be facing a new economic reality when we come out of this. Some avenues may be then closed to us, others may open up. One of the great strengths of start-ups or early-stage growth businesses is their agility.
Opportunities to pivot may present themselves, but only if we recognise them. I heard so much from businesses over the last 2 years that they couldn’t really prepare for Brexit as they “didn’t know what it would look like”.
This is a fallacy on both counts.
With coronavirus, we certainly know what it looks like – again, see Italy and South Korea. We have real-life case studies currently running approx. 15-30 days ahead of the UK.
We can learn from how they have responded and the challenges and opportunities that are likely to develop over the coming months.
6. I said I wouldn’t add to the noise on what we as individuals should do to help stem the spread of the virus. However, I heard a medical expert speak on Irish national media recently and what he said made me think.
When asked what we should all do differently, he said: “Well, nothing much really. I mean, we’ve always been washing our hands, haven’t we?! It’s less about what we do and more about how we think.
“If we all had the attitude that each of us is already infected and our actions are more to do with protecting others – i.e. those who aren’t, rather than protecting ourselves, then we’d have a chance of halting this virus before we have to encounter a drastic loss of life.”
If we’re equally smart about our attitude to economic survival and later returning to growth, I feel we can also avoid a drastic loss of businesses.