The first step in preparing your small business’ COVID-19 plan is to identify potential risks to your business. Understanding the scope of possible risks will help you develop realistic, cost-effective strategies for dealing with them and a timeline for their implementation.
Ways of identifying risk
Review your business plan and think about what you couldn’t do without, and what type of incidents could impact on these areas. Ask yourself:
- when, where, why and how are risks likely to happen in your business?
- are the risks internal or external?
- who might be involved or affected if an incident happens?
The following are some useful techniques for identifying risks:
Ask ‘what if?’ questions
Thoroughly review your business plan and ask as many ‘what if?’ questions as you can and if you can, quantify the impacts.
Brainstorm with your network
Brainstorming with different people, such as your accountant, financial adviser, staff, suppliers and other interested parties, will help you get many different perspectives on risks to your business.
Assess your business processes
Use flow charts, checklists and inspections to assess your work processes. Identify each step in your processes and think about the associated risks. Ask yourself what could prevent each step from happening and how that would affect the rest of the process.
Consider the worst-case scenarios
Thinking about the worst things that could happen to your business can help you deal with smaller risks. The worst-case scenario could be the result of several risks happening at once. Once you’ve identified risks relating to your business, you’ll need to analyse their likelihood and consequences and then come up with realistic and timely strategies for managing them.
The impacts of a pandemic on a business are most likely to be in the following areas:
- Clients, demand, sales – if your business is unable to supply your product or service to customers, what other ways can you sustain workflow?
Is taking your business online a viable option? Can you pivot your production during this time and use your equipment to produce an in-demand product?
- Staff – if your staff are isolated or confined, how will they continue to work if options to work from home are limited or not feasible?
Staffing arrangements during a pandemic may include telecommuting (working remotely from the workplace). This may be necessary to maintain vital services. Equipment, technology and technical support need to be in place and in working order. Staff also need to know how to use facilities such as video conferencing. This may require specialist training.
- Suppliers – If you rely on imports from foreign countries impacted significantly by the virus, this is particularly important. You will need to evaluate alternative sources for all materials impacted. Are there other domestic sources or countries that are less effected? You will then need to quantify additional logistics costs, import tariffs and increases in material prices and factor into your pricing accordingly.
Cash flow – Prepare a cash flow forecast and update regularly. This will highlight any foreseeable cash flow issues and allow you to act early. You may discover you’re likely to struggle with cash flow in the short term meaning you will need to act now.
For more detailed information, visit the Queensland Government page for pandemic risk management for business.