First Week Back to Work After the Lockdown
Published and valid as: 28th April 2020
Now everyone is back at work after the four week lockdown we have put together the following couple of documents, as below, to help you get your business back on track.
- What should you be focusing on right now?
- Business leaders share tips for surviving crisis based on past recessions.
We hope this helps you in some way in dealing with the challenges of the next couple of months.
The resources below are made available due to the current challenges New Zealand businesses face as a result of the COVID-19 Level 4 lockdown of New Zealand. These are very challenging times for business. If you require certainty before making use of the material contained below, please obtain independent professional advice beforehand. We cannot accept any liability to any party whatsoever for the subsequent use of the material contained below.
What Should You Be Focusing on Right Now?
- You are not alone – Following the four week lockdown, the majority of businesses in New Zealand will now have cash flow problems, from concerning to severe.
- Have you had a meeting with your staff and been completely frank about the current state of New Zealand businesses and the impact of the draining of cash from those businesses during the four week lockdown? This will affect everybody. Cash to a business is like oil to a motor. When nobody takes action to stop the oil draining from the motor, or top up the oil, the motor will cease.
- Have you developed COVID-19 Level 3 written procedures? The Ministry of Health will be able to enter your business without notice, ask for the COVID-19 Procedures and expect to see these in action.
- Have you taken steps to gain the full support of your staff following the four week lockdown? Everyone is going to have to work together to get businesses through the cash flow impact of the four week lockdown. It may take the rest of the year to recover.
- Have you tidied up in writing ( signed ) with all the verbal agreements/discussions you have had with staff during the lockdown, resulting from the severe cash flow implications of the lockdown on your business?
- What has happened to your sales? Have you lost any client work as a result of COVID-19? Do you expect to find replacement work from elsewhere? Have you discussed this with you staff? Will you need to consider either (i) redundancies or (ii) 3 or 4 day working weeks to cope financially with the loss of work?
- Are we going into a recession/contraction as a result of COVID-19? How will this affect your workflows?
- Is the Collision Repair & Paint Refinishing Industry recession proof as a result of insurance company work? How were the Christchurch Repairers affected after the earthquakes? What did we learn from the Christchurch earthquakes?
- Cash, Cash, Cash – Get some "working cash" back into your business as fast as possible. Review all your cash outgoings to see what cash can be saved.
- Will the expected world-wide "supply shock" affect the Collision Repair and Paint Refinishing industry in New Zealand? Should you stock up on materials critical to your process?
- Parts - Can you replace lost work by repairing parts when parts are either unavailable or become more expensive as a result of the expected world-wide supply shock? Will insurance companies accept higher repair prices in the current environment?
Business Leaders Share Tips for Surviving Crisis Based on Past Recessions
- Forget profit and balance sheets and devote all attention to cash flow. Forecast it out at least six months, and assess and update that forecast weekly.
- Go as early as possible to your bank with your forecasts, your plans, how you will assess them over time, and what you want from your bank. The bankers will be busy so the easier you can make their job of selling your request up the line the better for you.
- Trim every expense not core to your central product offering, ranging from sponsorships to magazines, company cars, etc. Explain your situation to your landlord and suppliers and ask for discounts. 15 percent supplier discounts are common.
- Make cost cuts including staff reductions as early as possible, trying to avoid having to make further rounds of cuts as the months advance. Act early, act big, act once.
- Communicate fully and honestly with your staff, suppliers, bank, and clients. Get as many people as possible on-board with your plans.
- Look after your mental and physical health, and seek advice from a wide range of sources – definitely not just your banker and accountant, and almost certainly not from your mates around the barbecue.
- Trim back advertising and concentrate on marketing to targeted audiences.
- Look for opportunities in the form of cheapened competitors, but stay focused on your core areas of strength.
- Stop following negative media, speculation on how bad things might get, and measurements of the depth of downturn. Pessimism leads to inaction.
- Remember that this too will pass as all previous recessions have, and note that many people regret that once they had cash flows under control, they stayed too cautious for too long and missed some good opportunities.