During an outbreak of infectious diseases, such as the ongoing COVID-19 outbreak, small business owners must be ready to handle the uncertainty in their business, as well as be prepared to protect the health and safety of their employees. Corona Virus outbreak has affected several small businesses. In activities ranging from functioning to hiring to production, it has changed the economy and workforce. Approximately 23 per cent of the industry worldwide is said to be facing Corona Virus side effects. Some of the companies have seen their profits drop significantly. Not just that, it has influenced even the supply chain of several businesses.
Effect on Small Businesses
Here are some of the significant effects of Corona Virus on small businesses.
Events may strain the financial ability of a small business to make payrolls, maintain inventories and respond to market volatility (both sudden declines and demand surges). Companies should plan themselves by researching and checking their access options to capital, so they have what they need when they need it.
Incidents influence your employees just as much as they do your clients. It's critical to ensure they can fulfil their duties while protected.
Inventory And Supply Chain Shortfalls
It is a prudent readiness measure to ensure that you either have sufficient product supplies for a prolonged period or diversify your distributor suppliers in the scenario when one supplier is unable to meet an order request.
Depending on the current situation of coronavirus, there may be a need to improve customer and workers safety by increasing the efficiency and frequency with which the company carries out cleaning of regularly infected surfaces by occupants and visitors. Check your service contracts and the cleaning supply materials to ensure they can meet increases in demand.
Issues With Insurance Coverage
Many companies have insurance interruption; now may be the time to contact the insurance provider and review the policies and clarify for what you are and are not protected in case of a prolonged accident.
It is essential to freely communicate with your customers about the status of your activities,
what protective measures you have put in place and how customers will be covered when they visit your business. Promotions can also be helpful in encouraging clients who may be reluctant to patronize your company.
Tips To Handle The Epidemic
Based on our analysis and support for our clients around the world, we have distilled the following six lessons for responding to the present situation.
1) Carefully Use The Experts And The Forecasts
Experts in the fields of epidemiology, virology, public health, technology and other backgrounds are essential when analyzing sophisticated knowledge and moving it. But it is evident that opinions of experts vary on essential issues such as optimum containment policies and economic impact, so it is essential to consult various sources. Each outbreak is unpredictable and unique, and we are still learning the crucial characteristics of the current one. We need to use an iterative, analytical approach to understand what's going on and what's working.
2) Always Reconsider Your View of What's Going On
A description of the situation and a strategy to deal with it until recorded on paper may become a source of inertia in itself. A Chinese proverb tells us that morning orders are to be given by great generals and modified in the evening. Yet, seldom are large organizations so versatile. Managers also avoid the distribution of proposals until they are sure. They are then hesitant to change them for fear of appearing indecisive or uninformed, or of causing organizational uncertainty. In a rapidly changing environment, a living paper, with a time-stamped "best current view" is essential to learn and adapt.
3) To Guard Against Bureaucracy
Senior management, public relations, administrative, risk management and a variety of other roles may usually attract contentious, critical, or high profile cases. Each may have ideas about how best communications can be constructed, leading to an excessively simplistic or conservative viewpoint and a long, complicated process. It is essential to assemble a small, trustworthy team and allow them enough leeway to make swift tactical decisions.
Communications poorly controlled can be harmful if primary new knowledge is brought to light every day. Using the clock speed of external events to direct the internal cycle, instead of beginning with the latter as given. A living digital document can increase the pace by removing the rigamarole of authorizing and approving several documents, and it also reduces risk, as it can be quickly modified or removed when necessary. Besides, clearly distinguishing between facts, theories, and speculations can help to portray a more full and detailed image.
4) Focus on The Lessons You Learned
Instead of sighing relief and returning to regular activities when the situation subsides, attempts should be made not to waste a valuable opportunity for learning. Also as the crisis progresses, reactions and impacts should be reported for analysis and lessons to be refined later.
Rapidly changing circumstances reveal inherent vulnerabilities in the company, such as an inability to make difficult choices or an unconscious tendency against consensus, which are opportunities to improve. Airline health, for example, is one of the most potent global learning systems that we have in this regard. Every time an incident occurs from minor mishaps to catastrophic events resulting in lives being lost, the root causes are investigated forensically in compliance with pre-agreed protocols, and formal recommendations are made. It's not shocking that flying has become one of the safest forms of travel, thanks to cumulative learnings and adaptations from previous misfortunes.
5) Get Ready For a Changing World
We should be expecting the Covid-19 crisis to change our businesses and society drastically.
For example, it is likely to fuel areas such as online shopping, online education and public health initiatives. It is also likely to change how businesses structure their supply chains and accelerate the movement away from reliance on only a few mega-factories. When approaching the urgent part of the crisis, companies will understand what this crisis is evolving and what they've learned so they can represent them in their plans.
6) Financial Concerns of Employees
Take other steps to alleviate the financial pressure on employers concerning the job costs. "Gradual" implementation of the following steps to be taken with the employee's agreement.
Introduction of a Remote Working Program
Except for certain businesses in the excluded groups, all organizations are expected to ensure that 70% of their staff does not operate on-site. And for all jobs, the opportunity to work from home will not be realistic.
Provision of Paid Leave or Provision of Unpaid Leave
Give your employees an option to choose for paid leave or unpaid leave based on their circumstances.
Temporary Salary Reduction
The Resolution allows workers to implement salary reductions. Such cuts are to be reported in a "temporary addendum" to the labour contract.The MOHRE has issued a temporary prototype addendum document which both parties must sign and send to the MOHRE upon request. The salary deduction will be eliminated on the earlier of
(a) the end of the addendum term; or
(b) the Resolution's expiry.
Permanent Salary Reduction
Permanent salary reductions must be implemented by the MOHRE's current salary amendment process and require the approval of the MOHRE.
With the current conditions in mind and the difficult times ahead, a business must have a proper and precise budget before starting the business activities.With the industries affected by the global pandemic, there's a vast need to handle the sum allocated to a specific business effectively and efficiently. If the budget is not adequately kept in mind, the company will soon have to face problems.
Being an entrepreneur, if you are looking for a financial consulting firm in the UAE that can take care of the financial aspect of your business and give you practical advice on how to make the best possible use of your company's finances, then it would be wise to look at the services offered by JAXA Chartered Accountants.. For more information on the services offered, contact us. We will be happy to help.