Shelter-in-Place, Stay-at-Home, Essential Workers vs Non-Essential Workers – words which strike fear in the heart of any business owner as you watch your business grind to a halt while the government works to flatten the curve in the COVID-19 pandemic. But as many say, this too shall pass and the economy will slowly start to re-open.
Most likely, there will be regulations associated with re-opening your business which will impact your day to day operations and your supply chain has seen significant disruption. Business owners need to look across all functional areas of their company to ensure a synergistic re-opening plan is developed. Not everyone is going to make it – you need to be ready. Here are tips to ensure your business is ready to reopen.
- Liquidity and Cash Flow – All decisions should be made based upon how they impact your liquidity and cash flow. A 13-week cash flow with information provided by operations is key to evaluating your liquidity, need to access additional capital and ability to perform scenario planning based upon changing variables in your operations. Now is also an opportunity to find ways to turn your balance sheet into cash, negotiate discounts with your suppliers and renegotiate your customer contracts. Watch Adamy Valuation’s Tactical Tuesday webinar on March 31, 2020 for ideas on how to Sustain Your Core Business Processes.
- Evaluate your Customer Requirements – Depending upon your business, listen to industry experts about customer demand for product or service or talk to your customers about their needs over the next three to six months and even for the long term. Then keep assessing your customers’ requirements as needs are going to change as consumers make different buying decisions in the post COVID-19 economy.
- Materials Planning – Evaluate your current inventory levels as well as your supply chains’ ability to provide products and services to your business at the level needed to meet your customer requirements. Your supply chain may struggle due to finances or workforce challenges so carefully evaluate their capabilities as if they were a new supplier to your business. Now is not the time to make assumptions of your supply chains’ capabilities.
- Scheduling – Develop a schedule for your business to provide the goods or services needed by your customers while keeping in mind your organization needs to remain nimble and flexible as customer demand and supply chain viability shifts and changes. Consider that you may not need all of your employees to return to work at once so you need to determine how, who and when you will bring employees back to work.
- Focus on Building Flexibility into Your Business – We have yet to see if consumer confidence will return once the economy reopens for business so demand could be erratic in the beginning as your customers find their new normal. In addition, this may not be the last shut down due to the COVID 19 virus so you need to stay on top of all areas of your business. Evaluate the business metrics you review regularly to be sure you are tracking the leading indicators your business needs to make proactive business decisions.
- Reinforce a LEAN Culture – Throughout the organization look to reduce waste (time and material) and improve operational efficiencies by simplifying or automating processes, redeploying resources or re-configuring your supply chains.
- Consult Human Resources and Legal Counsel – Work closely with your human resources team and legal counsel to determine employee return to work criteria. Keep in mind that some employees may not be able to return to work or need flexible hours because they or a family member became ill or someone now needs to stay home with their children because they lost daycare or school options. In addition, you need to understand and implement government regulations required in order to reopen. Examples include protocols around sanitizing, physical distancing, use of personal protection equipment and visitor/contractor screening protocols. Your experts can guide you through these requirements. You can refer to DWH’s recent blog post with Barnes and Thorburg for additional information.
Sales & Marketing
- Focus on Customer Relationships – On an ongoing basis, reach out to your customers to understand their unmet pain points and collaborate with them on solutions. Not everyone is going to make it through this and there will be opportunities to fill customer needs.
- Improve Sales Processes – Now is the time to improve your sales process including filtering out leads which are low margin or have low potential, focusing on product aligned with your strategic plan, and the evaluation of your win rate to improve your customer’s experience with your business and your ability to accurately forecast your pipeline.
Leadership and Organization
- We cannot stress this enough. Create a plan, communicate your plan, evaluate your plan, and modify your plan regularly! Your bank will want to see it if you need to ask for assistance but more importantly it will provide leadership and the rest of the organization a guide to move from surviving to thriving.
You are not alone. At DWH, we are here for you, even remotely. Let us know what we can do to help. A lot of our clients have questions about what this all means for them, what options and conditions for support or exemptions apply, what implications are for employees, how to mitigate business value erosion, how to manage communications with banks/creditors/vendors/customers, etc. Although we don’t have all the answers, we are here to help you. Please feel free to reach out.
Authored by: Heather Gardner, Senior Director