Your Covid-19 Coronavirus Business Contingency Plan: Do It Now

Coronavirus Business Contingency Plan Workbook
You can download this planning tool I prepared for my clients by clicking on it.

Putting in place a coronavirus business contingency plan should be a priority in your business right now.

This article explains how to do it.

If you run a business that’s been affected by the coronavirus, you may find The 4 Strategies For A Recession Proof Business a valuable resource.

1. Is A Contingency Plan Really Necessary?

The simple answer is yes – your contingency planning will help your business to survive. If you would prefer a slightly shorter version of this guide then read the coronavirus business continuity plan,

It’s useful to start with a little bit of science to understand how things will play out on a national level.

The graph below shows a model created by scientists at Imperial College, London. It shows the best strategy to minimise the number of deaths from coronavirus.

The orange line is the number of patients taken into intensive care per week. The blue boxes are periods of higher lockdown – strict social distancing.

Periodic bouts of social distancing keep the pandemic in check.
Source: MIT Technology Review website

When this orange line hits a trigger number of new intensive care admissions in a week, enforcing a lockdown will radically slow down the spread.

This allows time for the hospital workload to be held at manageable levels.

The scientists working on this estimate that this intermittent social distancing approach is likely to be the normal way we live for at least 12-18 months.

Anticipate waves of lockdown followed by much more freedom every 8-12 weeks.

So what’s likely is that you’ll have periods of relative freedom of movement and your business will operate as close to normal as it will get for a while.

But while this is happening, coronavirus cases will grow.

So then we’ll need periods of lockdown when your business will be subdued. In these times, the coronavirus cases will be brought under more control.

Until there is a vaccine, a cure or a wide level of immunity through people having recovered from an infection, you need to accept that disrupted business is your new normal.

Businesses need a long-term coronavirus continuity plan – the pandemic will be around for at least 18 months.

It’s likely that there’ll be a series of lockdowns where the economy, and consequently your business, are impacted.

Your contingency plan needs to consider the impact on the sector in which you operate, the funding gap if your sales are likely to be lower (true for most businesses), and the human cost too, amongst other things.

It may be necessary for your business to pivot and sell different services or products to survive the pandemic. Don’t trust to luck – create a coronavirus business contingency plan.

It’s likely that your continuity plan will need to address four major concerns, described in a supporting article, how coronavirus will impact small businesses.

But the reality is simply this. We have a virus that is causing major overwhelm for healthcare systems. The government needs to slow it down, and that means business gets slowed down too.

It is time to make your contingency plan a priority.

The 4 Parts of Your Coronavirus Business Contingency Plan

Here are the 4 steps to prepare your coronavirus business contingency plan.

  1. Brainstorm the areas of your business that are likely to be affected. It’s more than just staff and health. What if customers cannot pay, for example, because they are in self-isolation for 14 days? Will your cash flow survive? Then for each area identified, consider the next 3 points.
  2. Assess the nature of the risk. You need to quantify this in order to make rational decisions about protecting yourself.
  3. What is your contingency plan for this risk? How will you protect the business?
  4. What immediate actions, if any, are necessary? For example, should you be warning clients about reduced service?

You know the saying – prepare for the worst and hope for the best.

Being prepared means thinking through the likely issues you would face if the virus spreads as widely and quickly as the government has said it expects to happen.

Your coronavirus business contingency plan is a bit of extra insurance to protect your business from the worst of it. And if nothing happens, it’s cost you nothing to put together anyway.

And as a side effect, it becomes a useful part of a wider business continuity plan anyway, helping you to avoid making a drama out of an unexpected crisis.

To help my clients, I created a coronavirus business contingency plan cheat-sheet. There’s finance, staffing, supply chain and many other things to consider. The thing is, you want to do it quickly and then have it ready to roll. The cheat sheet helps you to do this efficiently. You can download it by clicking here.

2. Is It Really A Serious Threat To Business?

If you run your own business and have been paying attention to the news lately, you’ll have heard about COVID-19.  It is not being over-hyped, despite a feeling that the media may be making it bigger than it really is. 

The latest updates, for example, include borders being shut between some European countries, the USA banning all flights from much of mainland Europe, and Italy putting the whole country – over 60 million people – into lockdown to try to control the escalating cases there.

The affected businesses in Italy are not going to be trading at anywhere near normal levels. Some will simply never reopen after closing for this crisis.

3 weeks ago, they had a similar number of Coronavirus cases to the UK.

I’ll bet that those of them who decided to put in place a coronavirus business contingency plan are relieved they did.

Each day in countries around the world apart from China it has been infecting about 25-30% more people per day.

To put this into perspective, if this rate were to continue it will have spread to just about everybody in the UK by the end of April.

Coronavirus is highly infectious and therefore a serious threat to business as usual.

If 50-80% of your staff need two weeks off, will your business cope?

What about if 50% of your clients are closed for three weeks?

Let’s be clear here – 100% infection is hugely unlikely.

And such a rapid rate of infection will result in draconian measures to slow it right down – just like have already been successfully applied in China.

So it is probably going to tail off at some point.

However, it’s worth paying attention to what the Government has warned: up to 80% of the population may be affected.

They are predicting that the peak will be around Easter.

Which makes it very, very soon indeed.

If this happens, you’ll be glad that you decided to spend 30 minutes putting together a simple coronavirus business contingency plan

In 1918, a flu pandemic infected some 500 million people and went on to kill an estimated 50 million of them. 

The world had far fewer people back then – 2 billion compared with more than 8 billion now.

If it doesn’t happen, it’s cost you nothing more than the time to make and drink a cup of coffee.

If it does, your coronavirus contingency plan will keep you in far better shape than your competitors.

3. What Is It & How Much Time Do You Have?

Coronaviruses are a family of viruses that includes the common cold and flu.  The official name for this one is COVID-19. 

It is spreading quickly – around 15-30% more cases per day everywhere but China. China has locked it down and surprised scientists by the way they’ve almost completely stopped it from spreading.

At the time of updating, it has infected 104,000 people in countries across the world.  That’s 20,000 more people than a week ago. Well over 3,000 have died.

The World Health Organisation says it is possible that it will become a pandemic – infecting thousands of people in many countries. 

We’re almost there already.  Many medical sources say it is a pandemic already.  

Your business will be impacted. You do need to put a coronavirus business contingency plan into place.

To keep calm in a crisis you need to be prepared for it.  A coronavirus business contingency plan will take away the uncertainty and provide clarity under pressure. 

It allows you to make decisions in the cold light of day, with clear thinking, without the emotional fog of stress.

Before building your coronavirus business contingency plan, consider the facts as they are currently understood…

Scientists have had no time to study the virus in any depth.  The best current data are estimates.  Working figures seem to be…

  • The incubation period between becoming infected and showing any symptoms is thought to be 2-14 days.
  • The virus appears to be highly contagious, based upon the number of people who have become infected and the speed at which new cases have appeared.
  • The death rate is believed to be around 2%, although the current death rate from known infections globally is 3.5%. 
  • Many people will not even realise they are infected because their symptoms will be very mild. As a result, the actual number of infected people may be far higher than published.

As a result, you don’t want anybody at work who has COVID-19, because it’s certain to infect other people.  But there’s more than this to consider.

To help my clients, I created a coronavirus business contingency plan cheat-sheet. There’s finance, staffing, supply chain and many other things to consider. The thing is, you want to do it quickly and then have it ready to roll. The cheat sheet helps do this efficiently. You can download it by clicking here.

4. Building Your Coronavirus Business Contingency Plan

There are several things you need to consider for your contingency plan. Here are some of the issues that I’ve been discussing with clients in the past two weeks to get them ahead of the game.

4.1 Improve Your Cash Flow With Credit Control & Financial Support

If the virus spreads widely and fast, there are likely to be key people missing from your customers.

It would be wise to prepare for some of your customers to be closed for several weeks at a time, possibly longer.

You will need to have sufficient cash to carry you through this.

If your business is running close to the edge financially, then look for external support. As well as banks, you might look to other lenders like Funding Circle and similar to help you through this period as well as funding future growth plans.

It’s critical that you get on top of credit control to bring late-paying customers up to date before the worst hits. You don’t want to be left with big unpaid invoices and nobody available to pay them.

4.2 Reduced Capacity Due To Staff Absences

It’s likely that you will experience staff absences due to some self-isolating for 2-week periods. This means you’ll be unable to operate at normal capacity.

You should consider how you’ll maintain your services if any member of staff is absent or unable to return to work at all. It is a sobering thought.

I’ve recommended to clients that they look at 25%, 50% and 75% reductions in staff, sales and cash just to have that level of preparedness in their thinking.

4.3 Staff Holidays & Coronavirus

There are three major considerations for annual leave with this potential pandemic upon us.

1. For staff who are already on leave, you should have a policy about whether or not they should return to work immediately they get back.  Obviously you’ll want to factor in things like where they’ve been.

2. For staff who want to book a holiday, some companies are not approving it if the travel is to a place with major infections.

3. What to do if staff are absent for extended periods.  For example, if they fall ill or are detained for observation while on holiday.  People have been confined to hotel rooms and on a cruise ship for 14 days beyond the length of their holidays.  This kind of absence can have a big impact on your business.

4.4 Keeping Staff Safe at Work

If you have a team of people working for you, you obviously want them to be healthy enough to work. 

This means if somebody is being heroic, attending while clearly unwell, they should be sent home.  Even better, work remotely.

This is a smart thing in general, to avoid spreading any illness.  With COVID-19 it is more than important – it could be the difference between life and death. 

Remember, that while some people suffer only mild symptoms, others could be hospitalised by the virus, just like with influenza.

4.5 Travel for Work

Where your business requires staff to travel, both within the UK and overseas, consider where you’re sending them and the risk of them being exposed. 

It’s not just where they’re going, it’s who they’ll bump into along the way. 

Airports, railway stations and other busy hubs will almost certainly carry a higher risk than working in the office.

It may be a good idea to reduce face to face meetings and use online services like Zoom for the moment to reduce travel risks.

4.6 New Services or Products May Save The Life Of Your Business

It sounds crazy, but now might be the very best time to introduce a brand new service.

For example, imagine that you run a pub or restaurant. With people going into self-imposed exile, they’ll not be coming in to enjoy – and more importantly buy – your food and drink.

Smart entrepreneurs look for opportunity while their competitors have their heads down.

So the smart pub/restaurant owner might turn the kitchen into a food factory and deliver great home-cooked meals to those in isolation.

if your sales suffer, what new valuable need could your business satisfy?

Thinking like this will provide new hope and new sources of income while helping your customers in a new way.

Your coronavirus business contingency plan is more than battening down the hatches. It’s looking for new ways to serve and be of value, too.

4.7 Customer Risk Management & Business Continuity

If the worst happens and your business is unable to deliver a full service, what will be sacrificed?  What decisions could you take now, about how and where to allow your business to fail gracefully? 

Do the work now to ensure the minimum impact upon customers and protect the good name of your business in the long term.

It would be wise to have a plan about when you would communicate this to customers so that you’re working to a prepared plan, rather than scrabbling around trying to figure out what to do.

Finally, a strong business is always a safer business

If you’ve not got much of a safety net in terms of profitability and cash flow, perhaps it’s time to take action to fix that and make your business more resilient and more successful.  It all starts with a chat about your goals and your current situation to design a strategy to change your business forever.

Fingers crossed that none of this is needed.  If it is, at least you’ll be prepared with your very own business survival plan for coronavirus.

To help my clients create a plan quickly, I created a coronavirus contingency planning cheat-sheet. It helps you to prepare quickly, thoroughly and effectively. You can download it by clicking here.

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Lee Duncan

Lee Duncan is the author of "Double Your Business: How to Break Through The Barriers to Higher Growth, Turnover and Profit", from Financial Times Publishing. He teaches the owners of small to medium businesses how to make more profit and enjoy more free time.

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