Managing a business in times of uncertainty
Borders are getting closed and stock markets plunged again this week due to the global Coronavirus scare. Hopefully this will pass relatively soon, however It looks like world markets will be difficult for at least a few weeks longer. Here are some ideas to help you manage this time.
Taking care of your staff. Leadership (or lack thereof) becomes clear when crises occur. Employees will have worries with the business as well as concerns with family, safety and personal finances. Understand that they will likely be distracted from their daily tasks and responsibilities. A first step is to simply verbalize this and let them know they can take some breaks when they need to. Lower their sales targets for a week or two, announce an "open door" policy for anyone that needs to speak with you. Communicate what you are thinking to your employees clearly and frequently, they will want to know you have a plan.
Providing a "daily update" to your staff will help alleviate concerns and stress, even if you don't have new information to share each day. If staff are working from home, they could feel "cut off" from the business and co workers. As a simple remote work solution, set up a "group chat" where all staff can share concerns, ideas, or even ways of working more smoothly together. Your actions will impact relationships in the company, staff will remember what happened during difficult times and whether they were supported.
Providing a "daily update" to your staff will help alleviate concerns and stress, even if you don't have new information to share each day.
Cash flow review and planning. When sudden stops occur in a business or entire economy, expenses keep running but revenue freezes or becomes uncertain. Yes, business will return soon enough however your goal needs to be minimizing potential losses in the short term. You'll need to plan weekly and monthly cash flow even more carefully. Know What is your monthly "break even" sales revenue target? I.e. What revenue achievement will allow you to break even and yield at worse a zero monthly loss. You need to know your numbers inside and out, especially in critical moments. If you are not already doing so, using a simple EXCEL sheet you can plan out these numbers to create a simple view of weekly, monthly and quarterly numbers with various scenarios. Estimate sales under the categories "best", "expected" and "worst" case scenarios, and then model these sales results out to see how much "runway" you have before cash flow gets tight. If necessary have a plan for emergency financing, and plan what costs could be cut quickly if the business situation extends longer than initially expected.
Managing stress. Stress is often caused by a feeling of not being in control of a situation. A simple way to alleviate this is to write down the problems, make lists each day and tackle them one at a time. Making detailed "contingency plans" will also help you relax a bit more , knowing you have a plan if you need one. Talk to peers, family, friends, share ideas and gain perspective. See our article on "Stress Management for Business Owners" for more on this.
Offer for Free Consultations to support the Japan business community:
Our team at New Frame KK have managed businesses through the great financial crisis, "Lehman shock" (2007-2009), Tohoku earthquake and tsunami (2011) and many other ups and downs in the Japanese economy. We are offering free consultations for business owners and managers looking for advice, strategies, or just someone to speak with, to better manage the current disruptions. Please contact us at firstname.lastname@example.org to arrange a call.