Coronavirus Impact: What Options Do Businesses Have Today to Protect Their Long-Term Profit?

The coronavirus/COVID-19 outbreak is, without doubt, a human tragedy. But it is causing important harm to the economy as well, and the true scale of this upheaval has just started to emerge. The spread of the virus is impacting states at different rates, although they appear to go through a similar pattern of disease phases. We see governments acting quickly and decisively to protect vulnerable citizens and limit the damage to their economies.

As a bankruptcy lawyer in Colorado, I also think of my clients, businesses who are seeing a decline in traffic and an increase in isolation. Protecting your business now means being ready for the worst, taking precautionary measures and communicating with your employees.

I outline below the actions that, in my experience, can help keep your business healthy during a crisis, including the coronavirus outbreak.

Protect Your Staff

Many businesses are already supporting and protecting employees by finding alternative work arrangements to avoid contact and stay away from the office.

To communicate in clear, simple language about how to deal with COVID-19, you can send out memos or emails to your employees or have mandatory company video conferences. Try to send out an email update or message to your team at least once per day - use WHO, CDC, and other health-agency guidelines - and communicate what you're doing to keep them safe.

Filling in your staff not only allows you to keep them posted about your policies, but it also helps to provide autonomy so they feel empowered to deal with any quickly evolving situation. The more your employees know, the more they feel confident and a part of what you are doing.

Ensure that you have nominated health and safety representatives or managers to keep in touch with your employees and there is a way for them to notify you if they are sick.

Depending on your industry and business, you may not offer employees the opportunity to work from home. Maybe, as part of their positions, employees need to interact with customers face-to-face. The best action you can take now is to reevaluate your cleaning procedures. You need to hike up how frequently you clean your business during this crisis.

Keeping your workplace clean will give everyone some peace of mind knowing that the working environment is safe. Also, talk to employees about their job security and income options. Let them know if they are entitled to employment insurance.

Assign Responsibility for Managing the Crisis

If your business is small, you, as the owner, will likely be in charge of managing this crisis. But if your business is large enough, nominate someone well-suited to crisis management who can be your advisor and lead a crisis-management team.

When possible, it is preferable to build a cross-functional response team and separate it from executive decision-making. This team can create a comprehensive picture of virus response and how to adapt to this new environment. Establish a regular operating cadence and address business continuity, operations, communications, and supply chain.

In this initial period, good decision making requires appropriate information and data. The actions you can take include everything from continuously reviewing travel guidelines for employees to addressing human resources concerns around potential disruption scenarios, and making sure colleagues across your business take appropriate steps in the best interest of their families and your customers.

Review Your Finances

Look at your revenue vs your expenses to understand if you are able to meet your basic expenses. Your accountant or bookkeeper can help you get informed about your options and whether it makes sense to stay open, pause your business, shut down temporarily, or close your business.

Make a Business Continuity Plan

Weathering the coronavirus pandemic will be difficult, so make sure you have a plan as to how to do it. If you suspend your business operations, it will take thought and time to bring your business back to its former level. Are there other options to stay open? Can you find new suppliers or change your business model to continue to serve your clients?

Inquire about Options of Obtaining Relief

If you are struggling to meet some of your obligations (rent, suppliers, etc), look at your contract or lease to see if there is a clause regarding extreme circumstances or force majeure. If your contract doesn't include any clauses, you can try and negotiate an agreement to reduce or delay payments.

Look carefully at your finances, so you know exactly what you can afford before you speak with your commercial landlord or suppliers. If they allow you to reduce payments, you want to be sure it is an amount you can afford.

Call your commercial insurance provider. You may be entitled to insurance payments for business interruption. Speak with your bank, credit union, or another loan provider for some relief.