The uncertainty brought by the Covid-19 pandemic has highlighted the immense need for preparedness in business. A sound business continuity plan can mean the difference between keeping your doors open until things go back to normal.
An emergency will look different for each business but you can qualify a situation based on these questions:
- Is this hindering me (and my employees’) ability to earn a living?
- Will this affect mine and other people’s safety and well-being?
- Is this something I want or is it a need?
A pandemic certainly qualifies as an emergency, and unfortunately, a majority of businesses in the Philippines (and the world) aren’t ready.
As the situation unfolds, certain strategies and lessons need to be highlighted:
1. Have an emergency fund. Setting up fund reserves — which is at least three months worth of expenses — should be an S.O.P. for any enterprise, large or small. Keep in mind that insurance mitigation and the arrival of government stimulus packages (if any) will take time. Being financially liquid for the first 90 days can bridge the gap.
2. Secure workers’ compensation insurance. This type of insurance covers expenses for injuries and illnesses while at work. Some also cover their wages while they recover. Check the fine print in your policy and see how you can better protect everyone.
Property insurance for physical assets is also something to consider for businesses that need to maintain inventory, equipment, and other properties.
3. Determine who your skeletal team will be in the event of an emergency. In some cases, cutbacks will need to take place especially with the number of employees under your payroll. Before a disaster hits, have a list of which employees can effectively perform essential tasks to keep operations going while you wait for the dust to settle. Plan how your small team will operate in various scenarios and schedule test periods to patch possible holes.
4. Have varied income streams. Putting all your eggs in one industry or service makes it hard for a business to survive once a crisis hits. Look for ways to diversify the source of your cash flows; you may start with related services and products. You can also invest some of your enterprise’s funds in stocks or bonds. The more legs for your income stream, the better it can stand in the middle of a crisis.
5. A credit line is a must for businesses. The quarantine/lockdown has made it difficult to get to an ATM. Over-the-counter transactions may also be unavailable. Banks have responded to the crisis by offering payment extensions to clients. This shows an added value to securing this type of emergency line for your business.
Ready to invest in continuity plans for your business? We’re here to help you make #TheSmartMove.