Preparing Your COVID-19 Business Recovery Plan
After over a year of suffering, the end of the COVID-19 crisis is potentially on the horizon. Business owners can finally begin thinking of how things will look when this disease is no longer around, or at least a minor problem. This change could come quickly, and it's important to prepare your business finances and COVID-19 business recovery plan now.
Adapting to a new normal
Nearly every business had to adjust its operations in some way due to the COVID-19 crisis. Not only did you have to meet new safety standards, but you may also have had to revamp key parts of your business plan, such as dealing with less foot traffic, fewer sales, supply chain interruptions and a need to hold back on investments.
Fortunately, these problems could be temporary. Imagine what the world will look like in a year, when COVID-19 is more under control. How will the assumptions and goals in your business plan need to adjust for the new normal? While it might not look exactly the same as the pre-pandemic world, it may be closer to what we were used to before. There's even potential ahead for a stronger economy than before.
As part of creating a business plan in times of uncertainty, redo your financial forecasts to see how they could change if sales increase. Consider a few different scenarios: slow, medium and fast recovery. This can help shape your other decisions. Let's review several factors for your COVID-19 business recovery plan.
If you had to adjust your staffing needs, you aren't alone. According to a survey from The Conference Board, 57% of companies said they've restricted hiring to critical roles during the pandemic, while nearly a third have implemented permanent layoffs. As your business gets ready to expand, it may be time to start bringing back your workforce.
Consider how quickly your sales will grow, based on your recovery assumptions, and see what level of staffing you need to keep up with those productivity levels. You may want to hire in anticipation of this revenue growth. The earlier you move, the better your chances of bringing people back who originally worked for you, so you can avoid training costs.
If you paused promotions and raises, think of when you could reasonably afford to start those again. Try to get back to your pre-COVID-19 schedule as soon as possible, depending on your revenue. If you continue to delay, be sure to discuss with key employees what's going on and when you could reasonably start again, based on your revenue predictions. Keeping them in the loop could reduce turnover, even if they're disappointed by the news.
Overhead and physical space
With social distancing in place, many companies reduced their need for physical space, both to keep employees safe by working virtually and to reduce overhead. Consider whether you'd like to return to your original in-person space or if you'd prefer to maintain some form of virtual operations.
Check the productivity and desires of different departments to see what might be worth keeping remote. For example, perhaps your marketing team prefers to work in person to brainstorm, but your IT and finance operations want to keep working remote. When you reopen, you could get by with a smaller workspace.
Technology and strategic investments
During the pandemic, the whole world has gone more digital out of necessity. This has led to an improvement in virtual technologies. As part of your business recovery plan, consider whether you can use new strategies to improve your business model. For example, decide whether you should make technology investments to improve customer service, such as a virtual help desk or social listening tools.
Given that the economy has seen a major shift, this could be an opportunity to grab even more market share from competitors that don't adapt.
A reason for optimism
As you develop your plan, you're trying to once again predict the future in an unpredictable time. Part of how much you can do depends on how well your business does post-recovery. As you put together your assumptions, there's reason to be optimistic. The economic rebound is already strong, and government support has been substantial, with trillions of relief for businesses and consumers.
Given the possibility of a strong rebound, you may want to edge on the aggressive side with your recovery plan. The earlier you hire, set up office space and invest in technology, the less expensive it will be, while helping increase your lead over competitors.
To help fund this expansion, it could help to use a small business loan or other form of financing. Consider bringing your business banker into this discussion so you can figure out your moves for life after COVID-19.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.