The global crisis caused by the COVID-19 pandemic looks like it will be here for a while. While it’s critical we take every precaution to ensure we reduce the spread of infection, there is some other actions we should – or could also be taking. Here’s my take on some key focus points.
- Keep the wheels turning:
- Manage your accounts receivable:
- Use this downturn to build your business:
- Manage your Duty of Care
Keep the wheels turning:
Let’s put this into perspective, it is estimated that 18 million deaths a year are caused by poverty around the world. A global recession will impact everyone, and it will impact those in need the most. Here in Australia, casual employees and the self-employed are at the most risk. Many of these are bread winners for young families living week to week. We mustn’t underestimate how essential it is to keep the wheels turning.
Manage your accounts receivable:
One critical component of keeping the wheels turning is to keep your own business healthy, and in a downturn cash flow is undoubtedly king. Managing accounts receivable is more critical now than ever. Tighten your terms, be strict and make sure you have directors’ guarantees wherever possible. Setup your systems and follow them religiously. Most customers will be more understanding than you would expect, as they want you around to continue supplying in the future.
Use this downturn to build your business:
Yes, that’s correct. A well-run business will always have opportunities to grow in a downturn. The most obvious way will be to benefit from struggling competitors. Keep your eyes open for opportunities to purchase client lists, equipment or failing businesses as well as picking up great staff if they become available. Think strategically if you are buying a business. Do you want to buy as a going concern, via a deed of arrangement, or via a liquidator’s auction? If you’re buying a client list, how do you value it?
Alternatively, is there a product or service shortage that you can address?
Manage your Duty of Care
The most important thing you must do however, both ethically and legally, is to remember your duty of care to your staff, customers, suppliers and the community.
Australia’s workplace safety laws require employers to maintain a healthy and safe work environment (as much as is practicable). Company directors and senior managers have an obligation to make decisions that are financially, ethically, and legally sound. Our advice is to stay up to date with COVID-19 information from the Department of Health and consider the control measures advocated by Safe Work Australia and engage your staff in decision making