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  • Writer's picturePeter Wesley

COVID-19 Business Response A How-to Guide - What to do if you are a business owner or leader

COVID-19 Whole of Business Response 

A How-to Guide - What to do if you are a business owner or leader

By Peter Wesley - Dad-CEO/COO-Mentor-Author-Sailor-Mountain Biker

Introduction

I started jotting down a few pointers for friends who are operating their own businesses or are in positions of leadership and ended up with this paper. Last week in my role as a CEO I met with my team to devise our response and work out what we needed to do as a business. Of course my ideas are limited and are a result of my own context, which is this: I operate a B2B business, in the construction sector; we have Quality and Safety systems in our business; we have a strong, capable team; I am an ex-Navy Officer - I had the benefit of some amazing defence force training and had this crisis response stuff burnt into my brain. Some of you will have people in your business who can help and some of you may be on your own. The best ideas have come from my team, make sure you engage the right people (Internal or tap into any external advisors), friends and industry bodies.

In a fast-moving crisis, as leaders we have to move fast. We can make decisions in our business a lot more quickly than the government. We don’t have to consider the impacts of everyone in Australia when making decisions. To this point I believe whilst our Government is doing an amazing job they will always be a bit behind in decisions and advice to us due to the friction of democracy.  

My priority has remained the same now as it always has been - the health and safety of my team, the business and the customer - in that order. 

Where Do I Start? (P.S. There is a one-page checklist at the end)

An oldie but a goodie - I refer to the Balanced Scorecard framework by Kaplan and Norton, although I turn it upside down (people on top). Having a framework through which to view your business is not just management speak but a very useful place to start when making a plan. We started with PEOPLE first thing on Monday morning last week (16th March). I gathered our management team together and we discussed the first level of response required for us - how do we keep our team safe in the field and in the office? We then moved to Operations, then our customers and last but not least Financials. By the end of the week we had covered off the entire business - of course this will all change come next Monday morning as the environment changes.

People

Firstly we developed our COVID-19 Pandemic Management Plan. A shout out to Ben Knox at ComplianceOH&S who prepared a draft plan for all his clients, us being one of them. (Thanks Ben www.complianceohs.com.au) We reviewed this first draft and edited it to suit our business. If you don’t have OHS support and you have to develop this on your own keep it simple - here is what ours covered:

  1. COVID Management Policy

  2. COVID Pandemic Preparedness Plan

  3. Isolation Guidelines

  4. Work

  5. Cleaning

  6. Hygiene

  7. Travel Guidelines

  8. COVID Response Plan

  9. Monitoring

  10. Consultation

  11. Emergency Contacts

  12. Self Assessment

There is plenty of advice at the moment on what measures to take for personal safety so I won’t go into too much detail here. Check-in with your industry body or government websites such as: https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov-health-alert for information and advice.

We then developed a new risk assessment protocol for our work sites. We published our risk assessment via our audit app which all our field staff have access to (we use iAuditor). Once we had the risk assessment back we were able to update our Safe Work Method Statements and re-train our field staff, issue updated SWMS, provide PPE. Self-assessment checklists for individuals were easy to deploy with an audit app such as iAuditor. (There are a few different solutions on the market such as Donesafe and Assignar) 

Action Steps:

  1. Document your COVID Response Plan

  2. Integrate this into your Safety System

  3. Re-assess your risk assessments

  4. Re-train your staff

  5. Provide new PPE required

Operations

How would this pandemic affect our operations? It’s difficult to say what is ahead as far as lockdowns or further forced isolations go. There are 3 main areas to look at: Labour, Suppliers, and Customers. 

Labour

We could lose a large percentage of our workforce to illness. Without our staff, we can’t deliver for our customers. We started to look at a few scenarios and consider what are the top priorities and what can wait. At the moment we are able to get everything done for our customers as we have only lost a few staff to isolation but this could change very quickly and will require assessing every day. 

What are our obligations if we have to stand down staff? Here is a good reference from the Fair Work Ombudsman for information about what you need to pay if you have to stand down staff. https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws We have decided as a company we will work with our employees on a case by case basis to use up leave, try job sharing and redeploying to other similar businesses if possible. Open communication will be key in keeping the staff informed and up to date. Every business will have different responses depending on the industry, we are already seeing some sectors devastated like the airlines. 

Once we got our heads around what we were dealing with, the easiest thing for us to do was to move our office staff to work remotely. Fortunately, we had already invested in the technology to allow for this. No longer was a cloud-based operating system a productivity tool but now an absolute necessity. Here are some of the business tools we use to allow us to be able to work anywhere:

ACTION STEPS:

  1. Simulate - run scenarios of losing 25%, 50%, 75% of your workforce

  2. Know your obligations for paying staff

  3. Check all your employee leave entitlements 

  4. Have a plan for how to manage stand-downs

  5. Plan for a complete lockdown of all nonessential services (hopefully it doesn’t come to that but we should all be prepared) 

Suppliers

We rely on our suppliers to be able to deliver materials as and when we need them. We have been spoiled in Australia to have such a reliable supply chain but this is now being disrupted on many fronts and suppliers will suffer from reduced workforce, tighter border controls, contraction of manufacturing and the slide of the Australian dollar. 

We are looking at what materials we can stock up on and what contracts we have that will be impacted by expected delays in supply of materials. There is no doubt that our supply chain will be restricted and our costs of materials will increase. This will impact contract delivery and margin and we need to consider this in our cash flow forecasts. 

ACTION STEPS:

  1. Talk to your suppliers - find out early what restrictions you can expect

  2. Stock up if you can afford it and if you can store it.

  3. Consider other suppliers if your current suppliers are struggling (although I think they will all be struggling) 

Contracts

In our business, we have contractual obligations to fulfill. Every business is different but we all have obligations to our customers, whether there is a written or verbal contract. What have you committed to and do you need to change anything? Have you made promises a few weeks ago that you can no longer deliver such as due dates, quality or quantity of delivery? 

There are a few legal terms you will need to become familiar with now that in the past may have been just words on a page; Force Majeure, Frustration, Extension of Time, to name a few. Here is a link to the NECA website that has a good overview of managing contracts in this crisis. https://neca.asn.au/nta/nta/content/managing-covid-19-workplace

ACTION STEPS:

  1. Review your contracts - be prepared and act early. Many contracts have time bars on notifications. Seek advice where you need it from your lawyer. 

Customer

After we had focused on keeping our staff safe and we looked at the operational impact we were able to focus on our customers. It is clear that all businesses big and small are dealing with something never seen before and we are all making it up as we go. We service some large, sophisticated businesses but they are not COVID-19 experts so we can’t rely on them to provide guidance, we have to be proactive. Some of our smaller customers and subcontractors are looking to us for guidance. 

We went to our customers and gave them our COVID Response Plan and informed them about what steps we were taking. Some of them had requirements for us which we were able to fulfill easily as we had already implemented many of their requirements in our business. 

For anyone in construction, the closure of sites is a huge risk and we will keep communicating with our customers to stay informed. For other businesses the physical space that you trade-in will be affected. The restrictions on size for gathering has already closed down whole industries, others are sure to follow. I am seeing innovation all around this with trainers offering online classes, restaurants delivering to homes and office staff working from home. Rethink your workspace. Is there another way to serve your customer that gets around the restrictions that are in place or may be coming.

Your customers' needs will change as yours have. Is there a different product or service that you could sell? If you’re an accountant, your customer may want cash flow modeling not M&A advice. If you’re a beautician, your customer may want do-it-yourself tutorials online instead of visiting your salon. If you are a cafe or restaurant can you provide quality meals that can be frozen and reheated at home or move to a full takeaway mode temporarily?

ACTION STEPS:

  1. Tell your customers what you’re doing to manage COVID-19

  2. Ask your customers what they are doing

  3. Talk early and often - work together to maintain continuity of service

  4. Rethink where you serve your customers. Can you deliver online, home delivery, different products or services?

  5. Brainstorm other products and services your customer may need now.

Financial

It was Thursday before we got to the numbers. Not because they are not important but because We needed the inputs from the scenarios we worked on in People, Operations and Customer to do any modeling. The question we needed to answer was: Can the business survive? In uncertain times this a question of cash. Never has this been truer.

We currently do a lot of forecasting already so we had some decent tools at hand to use in this case. The difference now was that we were modeling a few different scenarios with so many variations possible. It is important to have the right model so you can change the inputs easily as you get new information. To keep it simple I used 3 scenarios; Bad / Really Bad and Kaput. 

If financial modeling is new to you, then you really need to get some help. Tell your accountant to stop worrying about your tax returns from last year and help you build a cash-flow model. I have traditionally used spreadsheets to help with this as most accounting packages are not great at doing cash flow forecasting. Having said that, I have recently found a new product that does this much better than anything else I have used. It’s called Float App www.floatapp.com Now I have my COVID-19 Scenarios loaded up, I can easily see the cash flow implications. This program pulls out data from Xero so it is always up to date and has the current data. Using this has reduced the time to do a cash flow forecast, by many hours and it’s more accurate, easier to communicate with non-financial managers and easy to change scenarios. I didn’t realise how important a business tool this would become. 

What about help from the government? This will be out of date tomorrow so stay tuned for government announcements. At the moment the assistance available won’t put any cash in your pockets today but there is some assistance for small and medium businesses starting to emerge from the government and it’s changing every day.

NSW Payroll Tax: No more payments required for April, May, June 2020 https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/payroll-tax

Increase Instant Asset Write Off from $30,000 to $150,000 until 30 June 2020 - Turnover less than $500 million.

PAYG Relief - Upto $25,000 back to business with a minimum payment of $2000 for eligible businesses. The amount of payment is 50% of the PAYG withheld from salary and wages as reported on BAS or IAS from 1 Jan - 30 June 2020. Turnover less than $500 million

Supporting Apprentices - upto 50% of the apprentice or trainees wages. 1 jan - 30 Sept 2020. Business with up to 20 full time employees. Maximum $21,000 per apprentice/trainee.

Payment to Social Security, Veterans, income support recipients and eligible concession card holders. One Off tax free payment of $750.

Small Business Lending Relief: The package includes a deferral of principal and interest repayments for all term loans and retail loans for 6 months, for small business customers with less than $3 million in total debt owed to credit providers. https://www.accc.gov.au/media-release/australian-banking-association-small-business-relief-package

ACTION STEPS:

  1. Run the numbers

  2. Redo your budgets

  3. Rework cash flow modeling

  4. Seek assistance from your accountant

  5. Find out what assistance you can access from State and Federal government

  6. Cash Cash Cash - it’s business basics but you need to reduce costs and speed up cash collection now more than ever.

Execution

The nature of this Pandemic is such that everything is changing quickly and as leaders, we need to be able to adapt. If your business is changing quickly whether it is growing, contracting, pivoting, then a day can be like a week and a week like a month. For this reason, your old rhythm of communicating won’t keep up. You need a COVID team who is focused on this and they need to meet daily, even if it's for 5 minutes to say nothing has changed today. This team should include people from the four key areas of your business; People, Operations, Customer and Finance. Revisit the four key areas of the business each time you get new information. If you have customers in lock-down it’s going to affect the operations, the people and the finances. 

Communicate more often with your staff and customers. Your people will be nervous, they will talk amongst themselves and in the absence of strong leadership they will make up their own stories. Clear, concise, calm messaging from you, the leader. You cannot over-communicate when there is a crisis. When the crisis has passed we can all relax and get back to normal but nothing is normal at the moment.

ACTION STEPS:

  1. Set up a COVID Team 

  2. Meet Daily 

  3. Communicate with your staff and customers regularly

Conclusion

“Everyone has a plan until they get hit in the face” Mike Tyson.

Whatever planning I did last week will go out the window tomorrow when everything changes, and I get hit in the face. Having a framework to work in will make it easier to adjust and adapt. Having a regular meeting rhythm will ensure we can react quickly. Having clear communication will ensure the whole team is on board and getting on with what they can. 

There is no place for panic but there is also no place for complacency. I have no doubt we will adapt quickly to the changes ahead. You can lead your team through these changes in a positive way and help all of your staff deal with the uncertainty by providing an environment at work that is structured, in control and working together. You can get the very best out of your team by focusing them on what they need to do to keep your business moving forward. Now is your time to step up and be a leader.

COVID-19 Business Response Plan - Checklist

People

  1. Document your COVID Response Plan

  2. Integrate this into your Safety System

  3. Re-assess your risk assessments

  4. Re-train your staff

  5. Provide new PPE required

Operations

  1. Labour

  2. Simulate - run scenarios of losing 25%, 50%, 75% of your workforce

  3. Know your obligations for paying staff

  4. Check all your employee leave entitlements 

  5. Have a plan for how to manage stand-downs

  6. Plan for a complete lockdown of all non-essential services (hopefully it doesn’t come to that but be prepared) 

  7. Suppliers

  8. Talk to your suppliers - find out early what restrictions you can expect

  9. Stock up if you can afford it and if you can store it.

  10. Consider other suppliers if your current ones are struggling (although I think they will all be struggling) 

  11. Contracts

  12. Review your contracts - be prepared and act early. Many contracts have time bars on notifications. Seek advice where you need it from your lawyer. 

Customer

  1. Tell your customer what you’re doing to manage COVID-19

  2. Ask your customer what they are doing

  3. Talk early and often - work together to maintain continuity of service

  4. Rethink where you serve your customer. Can you deliver on line, home delivery, different products or services.

  5. Brainstorm other products and services your customer may need now.

Finance

  1. Run the numbers

  2. Redo your budgets

  3. Rework Cash Flow Modelling

  4. Seek assistance from your accountant

  5. Find out what assistance you can access from State and Federal government

  6. Cash Cash Cash - it’s business basics but you need to reduce costs, speed up cash collection now more than ever.

Execution

  1. Set up a COVID Team 

  2. Meet Daily 

  3. Communicate with your staff and customers regularly

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