Managing the immediate business risks of COVID-19

23 March, 2020

The impact and effects of the coronavirus COVID-19 are being felt by businesses in Ireland as measures to contain the outbreak impact day-to-day life. We know that those who plan and act decisively during crises emerge as winners in their industry. What are the immediate risks you should consider and what actions should you be performing now to ensure you can succeed through uncertainty?

Strategic

Revisit your existing strategy, considering any legal and reputational risks
Review any ongoing projects that will be impacted
Prepare for new market opportunities (M&A, online market expansion, etc.)
Challenge, assess and amend your existing business continuity plan
Have regular updates with your crisis management team
Assess revenue projections on a daily basis, identifying permanent vs temporary or deferred loss in income
Identify and quantify cost reduction measures as a result of economic slowdown
Develop clear, consistent and effective communications with your internal and external stakeholders

Operational, supply chain or contractual

Identify and mitigate supply chain disruption and cancellations caused by delays. Be aware of transport suspensions from suppliers within affected areas
Revisit your supply chain model and consider short-term changes. Consider alternative suppliers, production planning to reflect factory closures or delays to workforce returning
Establish alternative communication protocols with your buyers and suppliers while there are restrictions on travel and physical meetings
Review your contractual agreements. Identify and mitigate potential disputes in production and delivery, inbound and outbound, that may arise from delay or failure to fulfil orders
Communicate with your customers to assess their ability to pay on time
Review government directives to ensure your compliance
Consider opportunities for immediate relief on commercial leases

HR, workforce or health and safety

Prioritise the health, safety and well-being of your employees
Establish clear and timely communications with your staff and stakeholders
Regularly collect data from your staff to support fluid decision making (e.g. their health, their location, any travel requirements, their date of return)
Quantify the impact of lost production, overtime payments and compensation leave for flexible working days
Manage the implication of labour costs in the mid and long-terms
Adjust any necessary employee insurance policies to reflect the current situation
Ensure you provide well-being and mental health support to employees at times when they may be feeling anxious

Technology, data or telecoms

Ensure your IT lead is an integral part of the crisis management team
Prioritise a stable IT infrastructure that can support secure remote working and potential demands
Provide visibility of business issues and performance metrics to satisfy the requirements of your stakeholders (e.g. government reporting requirements)
Consider alternative technology-enabled solutions to support business continuity where there are restrictions. This is particularly relevant if your business is predominantly offline, in sectors such as retail and consumer

Financing, cash or insurance

Revisit your business plan and update your KPIs. You need to provide a realistic basis to assess the actions you need to take
Review your actual cash flow position and accurately forecast cash on a regular, even daily, basis to mitigate likely shortages from falling sales and restriction in movements of people and goods
Consider the impact on working capital where there are or may be changes in the supply chain
Review your debt servicing obligations to identify potential outcomes of default (e.g. missed interest payments) and assess any likely consequences
Proactively engage with lenders and other stakeholders, preventing surprises and enabling potential rescheduling of debt or alternative financing sources
Prioritise reviewing insurance policies to assess potential recoveries for business interruption. Clarify your coverage as the situation develops
Consider if your business qualifies for financial relief initiatives recently implemented by the Government
Assess the implications of any delay to your business expansion or consolidation plans, and what that might mean for next round financing

We appreciate that this is a difficult time for many individuals and businesses. If you would like more information or discuss any issues you may have, we are available to talk to you.