COVID-19: 5 Business Preparedness Insights
Zions Bank’s Idaho Business Resource Center Director Karen Appelgren discusses how companies can prepare for the next big disruption.
We all know that hindsight is 20/20, and that the coronavirus was a “black swan event” – defined by Investopedia as “an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.”
But thought of another way, the pandemic presents a learning opportunity to position your company for future shocks, whether that’s a second wave of COVID-19 outbreak, a natural disaster or something else entirely.
The director of our Idaho Business Resource Center, Karen Appelgren, shares her tips for leveraging the lessons of the pandemic to your company’s advantage.
Business Preparedness Insight #1: Technology triumphed
“Businesses that had some kind of tech in place to be able to work from home, sell their items online or continue their training were often faster at responding – and that made a huge difference,” Appelgren says. “What did you miss that you should now be investing in? While technology can be costly, it may become a competitive advantage.”
Business Preparedness Insight #2: Savings equated to survival
Appelgren says businesses that were dependent on making the next sale got into trouble when that revenue was postponed or didn’t happen. “Businesses with a line of credit in place had a lifeline,” she explains, and recommends business use the same rule of thumb as households for maintaining emergency savings: three to six months’ worth of expenses in the bank.
Business Preparedness Insight #3: Access to professional services saved time and provided expertise
Professional service providers that proved their worth included:
- Bankers: This was brought into sharp focus when some financial institutions said they would only work with existing clients on the U.S. Small Business Administration Paycheck Protection Program loans. And during tough times, business owners should reach out proactively to their relationship manager about available financial lifelines such as deferments or interest-only payments.
- CPAs: Businesses that received PPP loans may also have found themselves in need of an accounting professional to help document payroll, other eligible expenses and workforce details when seeking loan forgiveness.
- Attorneys: Appelgren warns that many business contracts have tiny print that most owners have not paid attention to. “Sometimes what you think is an escape clause is not,” she says, referring to force majeure provisions. In addition, rapidly changing employment laws — rolled out as the Families First Coronavirus Act (FFCA) — left many business owners with time-sensitive questions about how to handle specific situations.
- Insurance agents: Unfortunately, it often takes a calamity for a business to realize they are underinsured, Appelgren says. “Some people haven’t considered business interruption insurance, and some people who had it in place didn’t read their policy and later discovered there was an exclusion for viruses,” she explains. “Sit down and talk with your insurance broker annually, especially if you’ve made changes to your business model that affects your risks.”
- Business networks and Chambers of Commerce: “Sometimes it seems expensive to join an organization, but it can be invaluable support in terms of promoting your business, connecting with others and receiving critical information,” Appelgren says.
Business Preparedness Insight #4: Marketing mattered even more
As consumers hunkered down in their homes during quarantine, staying in touch became even more important to help keep brands top of mind. Appelgren cites the examples of SMHeuristics and Air Filter Superstore that were sourcing PPE supplies and informing clients via email and LinkedIn communications. Other personal care services such as hair and beauty salons with loyal clients shared important reminders about social distance alternative services and precautions for reopening so clients would remember them when they were ready to book services.
Business Preparedness Insight #5: Adaptive mindset was critical
Businesses that were nimble and quickly pivoted their businesses model experienced success:
- Bardenay & Koenig distilleries began making hand sanitizer
- Slant 3D started producing face shields for health care workers
- Sunrise Cafe leveraged their supply chain to offer groceries and hard-to-find items such as toilet paper
- Zions Bank redefined job roles to expand the team of bankers that could assist with unprecedented volumes of PPP loan applications
Appelgren urges business owners to act while the lessons of the pandemic are still fresh. “In a way, an emergency points to whatever cracks you have in the foundation that you need to shore up,” she says. “People often don’t like to look at the worst case, but you can’t prepare without visiting those what ifs.”
Are you an entrepreneur looking for help starting or growing a business? Zions Bank has a Business Resource Center in Boise and a Business Resource Center in Salt Lake City that offer virtual group workshops and trainings as well as customized one-on-one counseling. Services are complimentary and available to the public.
Nicola McIntosh is Social Media manager for Zions Bank.