Can your business survive another lockdown?
As we prepare for another period of lockdown in England in the fight against the spread of Coronavirus, I am tempted to issue a strident rallying cry to businesses under the banner of ‘Adapt and Survive’ or ‘Improvise, Adapt and Overcome’. However, I don’t think this would be fair to those businesses who have tried to adapt to change in the first lockdown and have managed to struggle on – only to be kicked in the teeth when they are still on their knees. It is a sad fact that for many businesses, through no fault of their owners and managers, this next lockdown period will be a bridge too far.
Hats off to those business owners in manufacturing who have adapted to survive and are now producing PPE (Personal Protective Equipment) for example, and to the posh restaurants that are offering fine dining take away meals now that they can no longer welcome customers to their premises. There are many examples of businesses that have indeed improvised, adapted and are overcoming the difficulties that they have been faced with over the last eight months or more.
Sadly, however, for some businesses it is not possible to adapt their business model; others have perhaps been carrying too much debt to survive on a reduced turnover and some businesses are simply not in a position to be able to trade through another lockdown – for whatever reason.
It’s time to make a realistic assessment of your options
Now is the time, as a business owner, when you need to make difficult decisions. Do you try to keep trading (if you are allowed to of course) and retain your staff on furlough; perhaps just to lurch from one crisis to another as the government tries to balance the needs of the health service and the economy? Or should you make all your staff redundant and look to rehire when it is viable to do so? Could you just ‘mothball’ your business until this is all over? Not an option for many, unfortunately. If you feel your business is suffering and no longer able to survive, should you do the humane thing and put it out of its misery?
To paraphrase Charles Darwin, ‘It is not the strongest that survives, nor the most intelligent; but the one that is best able to adapt and adjust to the changing environment in which it finds itself.’ So what, you might say, is the difference between this and a strident rallying call to ‘Improvise, Adapt and Overcome’? ‘Very little’, is probably the answer! It’s a bit like trying to decide if a glass is half full or half empty. So what is the message that should be taken from all this rhetoric?
It is a time for decisions.
Be objective with your decision making
As a business owner it is sometimes difficult to take a step back and see the bigger picture as you are totally immersed in the day to day running of your business.
It is therefore harder to make the objective decisions that need to be made in the face of this ongoing crisis.
This is why it makes sense to ask for a second opinion. As a business consultant, I can see from the accounts what has happened historically, can see from the books and records what is currently happening and can apply current and likely future trading conditions to your business to give you a good indication of the likely impact on your business of the new lockdown and future suggested ‘circuit breakers’.
You do not need to be particularly well qualified or experienced to guess that the result, in many cases, will not make great reading. However, it is the decisions that the business makes once armed with this information that will determine how, and if, it is able to survive. This is where objective decision making is essential. The solutions available will depend on each individual business’s circumstances – but there is always a solution; even if it means putting the business out of its misery, leaving its owners free to live to fight another day, with another business perhaps.
Let’s not forget that, although there are many businesses that may not survive, there are actually many types of business that can thrive in a recession – even one caused by a global pandemic. Some of the best known global businesses, such as Microsoft, were founded during a recession. If your business can succeed and be profitable in a recession just think of the money you could make during periods of economic growth!
Of course, it is totally sensible to err on the side of caution in the face of the current pandemic, and the present recession is different from any seen previously, but if there is every prospect of your business being successful there is no reason to wait for life to return to pre-pandemic normal before launching it.
Again, this is where objective decision making is needed and employing the services of a business consultant can help you to make those decisions. I can examine your SWOT analysis, challenge your cash flow projections and profit forecasts, look at your Business Plan (or help you to write one), establish an action plan and help you to implement it.
So, whether you are looking at how your business can best survive, or considering starting a new venture, there are always decisions to be made. When making these decisions you need to be realistic about the prospects for your business and objective in your decision making. Using the services of a business consultant will not guarantee survival or success, but it will probably greatly increase your chances of both!