How Small Businesses Can Prepare for the Coronavirus
If you work for a larger company, you may have had the luxury of proactive disaster planning. But small companies often have too much on their plate to plan for all eventualities. So you may only now be considering how to prepare your business for the Coronavirus. If so, here are some suggestions to get you started.
Review your overseas connections. Right now the most immediate threat is outside the United States. I say immediate because it almost certainly will come here, but many other countries are further down the road - not just in China, but in many parts of Asia and Europe as well. If you have offshore assets or employees consider each and every exposure carefully. A thorough “what if” analysis with your team can vet potential problems and answers.
Examine your supply chain. Your supply chain is actually more likely to become an issue than inside the four walls of your company. Why? Consider a small business located in a Rhode Island community. Short of a global pandemic, the chances of an outbreak in your immediate area may be relatively small. But looking up your supply chain to your suppliers, logistic providers and even service providers, your potential exposure grows dramatically. Something that you buy locally may be manufactured anywhere and composed of pieces from dozens of different countries. All can be exposed to shortages in labor and materials and logistical challenges such as hub and border closures. Firms such as South Korea’s Hyundai Motors have already had to halt production because of component shortages caused by the virus.
Consider stocking up on critical products or parts, or if it’s not too late, identifying second sources. This is certainly true for manufacturers, but also for retailers who don’t want to run out of hot products. Even service providers can be exposed if critical spare parts aren’t available. Consider that a manufacturer that runs low on a part is more likely to allocate tight supplies to OEM production rather than spares. Think through all the ways your supply chain is at risk and also consider that if a shortage develops, a small company may be low on the parts allocation priority list.
Consider the impact on your customers too. Even if you are immune to the direct impact of the epidemic, your customers may not be. Companies around the world are already seeing disruptions in demand. Some Disney Parks are near empty. Global manufacturers have scheduled extended plant shutdowns. Be prepared for sudden and big drops in demand from customers in certain geographic areas or industries hit hardest. And conversely check your contract obligations to understand the financial implications of not being able to deliver supply to customers.
Prepare locally. Locally be prepared to keep your business running in the event that traveling or even coming to work is disrupted. Have contingency plans for your employees to work from home. Where possible have computers at home and data files available “on the cloud” (e.g., Google docs). Where possible have mission critical software programs accessible remotely, not just from inside the four walls of your business. Make sure critical phone numbers can be rerouted to home or mobile phones.
Review your business insurance coverage. It may be too late to purchase business interruption insurance which can assist with ongoing expenses during a forced shutdown, but talk to your insurance provider about whether your existing insurance can help.
Above all, talk to your team. Chances are they are aware of risks and exposures you never considered. And if you’re looking for assistance with any form of disaster planning, feel free to reach out to your local SCORE chapter at www.score.org or call 1-800-634-0245. SCORE mentors can help guide you through the process.
For more than 50 years, SCORE has helped more than 11 million aspiring entrepreneurs and small business owners through mentoring and business workshops. More than 11,000 volunteer business mentors in more than 300 chapters serve their communities.