"Can my business survive Coronavirus?"
Coronavirus is on everyone’s lips, not literally but figuratively. And for very good reason. It seems so long ago already that the only thing in the news was all things Brexit, and how companies will need to adapt in order to survive, and now that has been brushed aside by a much bigger and more urgent threat – coronavirus.
Not only is coronavirus a global phenomenon rather than a UK centric one, but it impacts each and every person and business in one way or another, and its economic effects will continue to be felt for many years, and even decades to come. Also, unlike Brexit, early stage businesses and their founders are likely to suffer disproportionately as they do not have the same financial resources as larger, longer established companies, and many of them are likely to fall between the cracks of the various government support schemes.
It is entirely understandable, therefore, that in recent weeks the question that I keep getting asked and overhearing is ‘can my business survive coronavirus?’ Sadly, not all will, but as I have highlighted previously, our own actions can greatly increase the chances of success, and indeed of coming out of this with a refined business model, as well as being fitter and stronger than before. For those of you that missed my previous articles, they can all be found on my LinkedIn page as well as the Startups Magazine and BOOM & Partners websites.
Some of the obvious steps that a business can take to survive coronavirus include:
- Adapt – In almost every way and as quickly as possible (article published 17th March 2020)
- Communication – Be positive and do the right things for the right reasons but ensure that you keep your clients engaged (article published 24th March 2020)
- Cashflow – Preserve your cash flow as much as possible (article published 31st March)
- Access government schemes – Find out what schemes your business is eligible for and apply for them in need, but remember that eligibility is more restricted than often thought and receiving payment will also take longer (article published on the Coronavirus Business Interruption Loan Scheme 26th March 2020)
- Short Term Funding – Most businesses that were viable before the present crisis will be every bit as viable afterwards, and often sales and income is postponed rather than cancelled, so many will enjoy a surge in demand later in the year as customers try to catch up. As such, it is the short term cashflow pain that needs to be bridged and one way that this can be done is by cash injections from the founder or other investors
- Raising Equity – Many businesses and products will actually see demand increase during this time and for those that do, raising fresh equity is still very much a possibility. Some investors have fallen away but many others are still investing, and with there being a reduction in those seeking finance it could be a very good time to do so
Of the six points listed above, every business should be doing the top three as a matter of urgency and looking at the next three and deciding which ones are appropriate in their own particular circumstances.
Whether any business survives or not will be greatly influenced by a complex mix of variables including: its products or services; who the end customers are; its supply chain and delivery mechanisms; its cash reserves or levels of debt; how quickly it can cut its variable and even fixed costs; whether it can access government funding or fresh equity or loans from its investor base or new investors; and so much more.
But to answer the question of ‘can my business survive coronavirus?’ by adapting very quickly, preserving cash flow, and continuing to engage your customers then the answer is much more likely to be yes than no.