Refresh Your Business Plan Post-pandemic
You did it. Your business has survived a major crisis, and you’re ready to quit surviving and get back to thriving.
First, though, you should do a thorough analysis of your business and financial plans. Now that you’ve experienced what could be a worst-case scenario, the timing is perfect.
Things look very different than they did in 2019. We can’t go back to our old strategies. Instead, we need to adjust our expectations and learn from what we’ve just been through.
These are the lessons we can take from hard times.
Update Your Business Continuity Plan
You probably had a strong and reliable business continuity plan pre-crisis. How did it hold up? If you followed it closely, and it held up under pressure, you’re in good shape. If you had to improvise solutions often, you need to revisit your plan to shore up the weak spots. Think carefully about what actions you took and plans you put in place, then document and add them to your continuity plan.
If you never had a business continuity plan, there’s no better time to write one while the memories of the current crisis are still fresh.
Reassess Your Cost Structure
Most businesses have a plan for a sudden reduction in revenue. They stress test and develop contingencies for a 10 or 15 percent drop in sales. Now that you know how much worse it can actually be, it’s time to build a new plan. Instead of only planning for a 10, 15 or even 20 percent reduction, also look at 45 or 50 percent to decide what actions you will need to take. Evaluate the business and expense structure to see if you can shift more costs to variable, which will provide more flexibility during the next material downturn.
Diversify Your Supply Chain
The pandemic disrupted supply chains all over the world as factories closed, demand for some products spiked and logistics were overwhelmed. Look closely at your own suppliers and research alternatives to fall back on should one shut down. This includes sourcing from different companies and also different states and countries. Disasters affect every area differently, and one country may be able to deliver when others cannot. Begin cultivating relationships with alternative suppliers.
Make Pivots Permanent
Many businesses pivot their delivery models because of government mandates and changing consumer and business needs. Once everything is back to normal, it doesn’t mean you should abandon what works. If options like curbside service, contactless payments, online sales or a reduced physical footprint have potential to save you money or increase sales, make them a permanent part of your newly revised business plan.
Automate More
Regardless of business size, now is the time to find ways to move away from manual and paper processes, especially for payments and collections. If you have options for automation, take them. It helps in a crisis by allowing you to execute essential business functions in any environment, and it helps with overall efficiency because you have fewer people spending less time on paperwork and paper checks. The technology for remote and automated processes has leapt forward. Remote deposit, automated accounts payable, ACH and wire payments, online bill pay and card controls are now the norm. Take advantage of them.
Upgrade Your Technology
Did you have enough laptops and other devices when people needed to work from home? Did you have the equipment you needed for online sales and remote payments? Take thorough stock of how you used technology during the crisis and use that data to build a long-term technology plan. Then buy whatever is missing and build upgrades into your ongoing budgeting process. As we have all learned, technology is always worth the investment.
Though no one would call a major crisis a “good thing,” we should all try to take good lessons from it. Some of the changes you were forced into could end up being a net positive for your business.
Baimba Norman and Susan Godbee are financial advisors at Pinnacle Financial Partners in Atlanta. Baimba can be reached by phone at (470) 990-8427 or email at Baimba.Norman@pnfp.com. Susan can be reached by phone at (470) 990-8402 or email at Susan.Godbee@pnfp.com.
