The outbreak of COVID-19 and its current and potential implications have really hit home in New Zealand over the past few days. The situation is evolving daily and uncertainty is high which leads to anxiety and stress – at both a business and personal level.
The most important thing is to remain calm, to remember that we are all in this together and to keep discussing and moving forward with practical steps to support your business and families.
We are here to help and are open for any discussions you need to have around your own personal situation. We will not charge for an initial consultation around your specific needs.
Some practical things you can be thinking about right now:
Take this seriously, but don’t panic: The fact that so many governments and central banks are taking such extreme measures in response to this demonstrates the level of threat that exists. A lot of people (and the media) can use this to drive towards hysteria and panic. This is neither helpful nor proactive. You do need to take this seriously, focus on solid facts and evidence to get together a clear but flexible plan and then take the appropriate actions. Keep informed & up to date: There is a lot of good information available online and this information is changing as the situation evolves. It is a good idea to stay informed and regularly check in with the latest developments and advice. Two key websites are as follows: Ministry of Health Website - Click here Ministry of Business, Innovation and Employment - Click here NZ Government Assistance: Yesterday the government announced a significant support package which has application for a number of business clients. Wage subsidies are available for businesses who are projected to suffer a 30% decline of revenue for any month from January to June compared to the same month last year. Employers must still undertake to employ affected employees at 80% of their normal income. There is also support if any of your team are forced into self quarantine due to exposure to Covid-19 or following travel restrictions. Please do not hesitate to contact us if you think you may qualify for these types of assistance. We will be proactively looking to identify clients who do fall within these parameters. Communicate: In times of crisis, people naturally look for calm, clear and concise leadership. This is a great chance for you to demonstrate this to your teams, customers and suppliers. Make sure you communicate simply, often and with a consistent message. You don’t need to have all the answers but you do need to look like you are aware of and managing the situation. Know what’s important: You need to understand what processes and systems are critical in order to continue operations and what resources are needed for these. You should consider people, plant, technology and finance. You also need to know what systems and processes can be suspended temporarily and have a plan to action this if and when required. Consider staffing levels and strategies: Similar to examining the essentials, it is worth considering what is the minimum staffing needed to support core operations? Also, who are the primary and alternate staff for core job functions? Is there enough cross training and awareness of role requirements? Realistically if the virus hits hard it is likely that you will have staff absences and hence plans need to be in place for how you can deal with outages. Understand your supply chains: Make sure you are in regular contact with your key suppliers to understand their supply chains and any obvious weak points. Explore viable alternative options for key supplies that you can switch to if needed. Explore the feasibility of holding more inventory of inputs and finished goods to reduce the impact of any future disruption. Discuss and develop a Business Continuity Plan: Business Continuity Planning is the planned measures you have in place to keep operating in an adverse event. It should be a consideration of a range of scenarios and severities. For example, not having access to your building for a day, a week, a month, and what that would mean. Ideally your BCP should be pulled together utilising a broad range of your team, and where appropriate external suppliers and experts, to help ensure a robust consideration of potential implications and available mitigations. How is your remote working ability? Related to the above, remote working is likely to be a key mitigation if people are quarantined, or needing to avoid others. Businesses should review their policies and capabilities for remote work in case employees prefer to or must work from home or somewhere else that is not their usual location. Staffing plans should identify which processes can still function if employees are working remotely. To be successful you also need to ensure that employees who work remotely have the appropriate technology and are able to access the necessary systems, data, support, and that your intended systems can handle a spike in remote use volumes. Stay on top of your finances: It is key to keep a close eye on your finances, and especially your cash flows. While it is too late for most to be able to strengthen their balance sheets it is important you remain cognisant of your position while you deal with day to day trading issues. Most organisations will have external providers of capital, debt and trading finance and their ongoing support is likely to be critical. Keep in touch with them and treat them with respect. Above all it is important to keep talking and be open during this challenging time. The team at BM Accounting are readily available to sit down and help you map your financials and cash flows, develop your BCPs, run scenario testing to keep you informed, and maintain communication with capital providers and other interested parties such as the IRD. We are here to help! There are always two sides to every coin and amongst all the adverse impacts of this pandemic and the financial fallout there will be opportunities….for those that remain alert, able to objectively consider, and be open to them. Opportunities to improve how your organisation works can appear from many different angles. From within your existing business this may include process improvement opportunities such as trialing new more innovative and flexible ways of working. For example the necessity of trialing remote working for many will be an interesting experiment. Externally there may be new and innovative supply chain collaboration possibilities and strategic alliances or opportunities. But remember; opportunities are only available to those open to them and looking.