Company directors and leaders are responsible for assessing whether business continuity operations can be maintained, that is, whether they can continue in the near future (at least 12 months), especially during the period affected by COVID-19.
This article outlines the responsibilities of business leaders regarding the survival of their businesses. It also offers practical advice on financial strategy and business recovery planning.
Flexible leadership style
COVID-19 has caused a widespread global crisis in all aspects. Some people may feel unaffected, but the majority are overwhelmed, exhibiting abnormal behavior and even extreme actions.
Leaders play a crucial role during times of crisis. How you treat your employees today will have a powerful impact tomorrow.
Leaders need a strategy that helps the company and guides employees through crises in a flexible manner.
The best leaders succeed because they understand both "dominant" and "authoritative" leadership styles. Having both dominance and authority in their leadership toolkit can help leaders respond flexibly to a range of challenging situations facing businesses. The role of a leader is even more evident during the period of helping businesses overcome the obstacles posed by COVID-19.
Cost reduction during the COVID-19 period
Conduct a review and implement changes to financial management processes to manage cash flow effectively, such as reducing costs and finding suppliers that offer competitive prices.
Raise awareness of the importance of cash in a business, as money reflects a company's ability to pay its debts in difficult circumstances. Understand the importance of knowing when suppliers are expected to require payment and regularly review the payment schedules of loans to effectively manage cash flow.
Contact your business's suppliers and lenders to negotiate payment extensions, interest rates, payment terms, and overdraft facilities if necessary. This will help extend the business's operational lifespan and allow for business recovery once the difficulties subside.
Risk management
To maintain business continuity during COVID-19, management needs to effectively manage risks. Key risk management factors to consider include sales volatility, input cost fluctuations, the ability to develop new products and services in a timely and cost-effective manner, and building stable cash flow. Good risk management helps businesses control future risks, proactively preventing them rather than constantly reacting to unforeseen situations.
Leveraging technology in business operations.
Under the impact of COVID-19, direct interaction between businesses and customers was minimized, and face-to-face transactions were restricted. The use of technology helped businesses solve this difficult problem. Technology platforms like Facebook, Instagram, and YouTube became the best channels for selling and advertising services to customers during the COVID-19 pandemic. A shift in mindset, leveraging technology, and focusing on suitable products and services will help businesses overcome the crisis and maintain continuous operation.