Steps you can take to keep the economic ball rolling
Save the jobs! The priority for entrepreneurs now is to preserve as many livelihoods as we can. Many small businesses and gig workers face ruin in the coming weeks, with the potential economic damage rivalling the health threat, so our response should be as urgent as for the health threat.
Here are some things to do, some of which we may want to continue after this tsunami of suffering is over. If you have a secure income:
Keep paying your domestic or garden staff, even if you
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decide they should not come to work — there is nowhere else to get a job right now.
Don’t cancel your monthly payments and subscriptions, even if you can’t use them, or else your providers may not survive. Think gyms and children’s after-school activities.
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Try buying gift vouchers from anywhere you would normally have spent money. This gets cash into their hands now, when they need it most. Think restaurants, coffee shops, and hair and beauty salons.
Don’t claim refunds for cancelled entertainment.
Donate! There will be hunger and desperation in coming months, beginning already with school students who used to get their main meals at school.
If you own a company with secure revenue:
Revise your strategy on the assumption that this may last 18 months.
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Wherever possible source from small businesses.
Support social distancing, obviously. If your staff can work remotely, they should. Train and equip your front office staff responsibly.
Be accommodating with sick leave and childcare requirements. Some staff have no good options for children who are suddenly at home, so if possible let them change their working hours. Sending children (who may be asymptomatic carriers) to grandparents is dangerous as infected elderly people are at much higher risk of dying.
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Be accommodating with clients, especially if they have to close their businesses temporarily. A client kept afloat now is a client you will still have afterwards. This is especially relevant for landlords.
Buy services in advance to boost their cash flow. If your staff have a regular coffee shop or lunch outlet, buy a few hundred vouchers now, and use them as staff rewards in future. Make flexible travel bookings.
And of course look for business opportunities. I heard of a mining equipment manufacturer that is switching
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to making soon as possible. ventilators.’ Don t wait If your company is in trouble: Conserve cash at all costs, as another minute to cut every expense that is not absolutely essential. Plan for months or even a year. It will be too late to cut when your cash is gone.
Let go unsustainable products, however precious. If the costs of staying open will sink you, and there are no alternative products or markets, you may need to close now while you still have food for your family and capacity to restart when things improve. That’s the toughest call. The
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African Management Institute (AMI) offers a free “virtual business survival boot camp” webinar to help with tasks like risk forecasting at https://www.africanmanagers. org/event/covid19-virtualbusiness-survival-bootcamp/
Talk openly and honestly with staff and suppliers now. It is better (if possible) that all staff take a big temporary pay cut and still have jobs after the shutdown. In SA there is provision in the Unemployment Insurance Fund regulations for staff to claim if their employer has to reduce the hours they work — this could save jobs.
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Likewise, warn landlords and other creditors that payments may be late, and come to an arrangement if at all possible. Don’t just default without warning.
Look for new markets. Can you go online?
Above all, spread compassion. We all need love, honesty and service from each other as we face our generation’s big test.
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Cook is chair of the African Management Institute. This column was co-written by Paul Cook, co-founder and MD of Silvertree Holdings.