The CoVid Chronicles 1: The Lockdown
April 4 2020
Looking back over the last few weeks, it’s difficult to recall exactly when we knew our present reality was nothing like we have experienced in our lifetime. Elders will say the last comparable experience was World War II. The difference this time is that we can predict with some confidence that we’ll be resuming business activity within the next 18 months. It will however, be anything but “business as usual”. Will your business simply pick up where it left off? Even if yours is an “essential service” and you have continued to operate through the lockdown, will your “modus operandi” and your customer relations look the same?
When your business was launched, you had a business plan. Hopefully it has been updated each year as you revised targets, your product mix and your deployment of cash and human resources. Needless to say, your business plan for 2020 will not unfold as you planned. For many businesses, resuming operations after the “all-clear” will be like starting a new business.
Here are just some of the factors that will influence your post-crisis business assumptions:
- Your customers and our governments will be deeper in debt than before.
- Consumer prices will have increased beyond the rate of inflation experienced in recent years.
- The federal government will have pumped billions into the economy to prevent a depression. Extra money in circulation when the recovery begins, could lead to inflation, prompting the Feds to raise interest rates from their present rock-bottom levels.
- Employees who have been furloughed or on a tightened household budget may be looking for wage increases.
- Throughout the crisis, your customers have drastically changed their lifestyles and purchasing patterns.
- Out of necessity, new commercial models have emerged: grocery delivery, online ordering and parking lot pickup, contact-less meal delivery, working remotely. Businesses are finding new ways of meeting the needs of their customers while generating income during the confinement.
If your business is operating at less than capacity or idling in neutral, take advantage of this pause to do some deep thinking about your post-apocalypse business plan. In business, we base our planning assumptions on historical data, experience, intuition and a certain amount of guesswork. The assumptions for the re-launch of your business will be quite different from those used for your original 2020 business plan.
Our enforced furlough gives us an opportunity to re-assess our business model, sales projections and cash flow forecasts, taking into account the new reality. Previously, we may have worked with annual forecasts. We could now be looking at a best-case three to four months for the remainder of 2020. In 2021, the recovery will begin, slowly at first, gradually gaining momentum. With luck, 2022 will start to approach pre-pandemic levels. All of this depends on many variables, not the least of which is the possibility of inflation and rising interest rates.
If all of this sounds daunting, there is help available. Your local Small Business Advisory Centre offers a wide range of government assistance programs. Your local Chamber of Commerce is also a valuable source of information.