By Eric Johnson
We discussed the potential of a second wave of state and local mandated closings as a result of the impacts of an increased number of infections and hospitalizations due to the coronavirus pandemic in a previous blog post. But what happens when that situation actually occurs? Here are a number of considerations to keep in mind for a potential second wave of closures which may involve different sets of circumstances than the initial set of closures that took many by surprise.
1. Understand the effect that a closure will have on products and services
The types of products and services offered by an organization can drastically change over the course of business closures. Businesses with durable goods will largely be associated with warehousing inventory costs, whereas those with nondurable goods may need to be concerned with product degradation. And those businesses with high-expiry products may want to reduce inventory to reduce spoilage, while ensuring that their supply chains are robust to withstand the closure.
2. Maintain constant communication with customers
Customers are willing to work with businesses that provide them with as much information as reasonably expected and that are willing to be flexible with terms to the extent possible. This level of cooperation goes a long way in reducing the level of anxiety amongst customers. The three things that customers will be looking for is the duration of the closing, what products and services can be possibly provided during the closure, and what the post closure environment will look like from both a delivery and a service perspective.
3. Maintain close contacts with state and local governments if possible
While it's not expected that every business will have an open door to the governor, local businesses will be well served in maintaining contacts with their local governments. While some governments are more adept than others during this pandemic, establishing a relationship can be the difference between receiving information that is accurate and timely, and getting information secondhand which may not be very reliable.
4. Take advantage of grants, loans, and other opportunities to supplant revenue.
While this is an obvious statement, there were a surprising number of businesses that did not conduct the research into obtaining federal grants and loans from the various subsidy bills passed by Congress. The process will most likely be difficult comma and may require multiple attempts, but the uncertainty of revenue requires every organization to be as diligent is possible in obtaining supplemental sources of revenues to keep the business afloat. Additionally, some state and local governments also have certain relief packages that may be supplied on top of federal support.
5. Create short-term closing and long-term closing plans
The duration of these closings is the wild card in planning. We recommend that organizations create two sets of plans. One in the event of a short-term closing lasting less than a month, and another in the event that the closing goes for two to three months. Maybe even a third set of plans would be appropriate for a longer closing past 3 months, depending on the circumstances. This allows the business to rapidly respond the changes and reduces the level of anxiety in managing expectations.
The general opinion within the medical community is that until a vaccine is widely distributed, flare-ups of virus transmission will continue to impact society and as a result economic output. The goal of this checklist is to reduce the level of variability in decision-making and to allow the organization to respond quickly and also manage expectations internally and with its customers and supply chain. While this two will pass, preparation is critical in achieving a successful return to better times.
At Propulo, our focus has always been on safety culture and operational excellence. Please visit our website (Propulo Consulting) for more business insights and leadership resources.