Pandemic is ultra-marathon
Covid-19 has had a tremendous shock on economies across the globe.
At Kinloch Anderson in over 150 years of trading, we’ve seen two world wars, rationing and countless economic cycles and the coronavirus pandemic is the most testing challenge we have faced in my lifetime.
Lockdown restrictions combined with Brexit have added to the complexities and many SMES find themselves in financial difficulty. In the current economic downturn even the most well run businesses are facing unprecedented uncertainty. But I would rather paint a picture of hope for the future.
First, it’s important to recognise the pandemic is not a marathon, nor a sprint. It’s an ultra marathon. SMES have to think laterally and be prepared to adapt to the times. Thus my advice is threefold…
Adapt the business to the world it finds itself in
Businesses should not be afraid to explore new products and services to survive in the short term. The Kinloch Anderson brand is synonymous with kilt making, tartans and all aspects of Highland dress. However, with the vast majority of formal occasions, weddings and graduations being cancelled, the demand for our most notable products simply isn’t what it was. As such, we’ve needed to think laterally and launch new products and have diversified into face masks and other interesting products.
Embrace financial management best practices and support
If possible, businesses should strive to always keep a fund for unforeseen circumstances. If the business was founded or built upon substantial debt, or if the profits have been fully extracted by shareholders, it should be no surprise that at some point the business runs into financial difficulty. I’m well aware that having passed the one year mark of lockdown restrictions, even businesses that have been managed responsibly are likely to be facing cash flow challenges. While the government furlough scheme and grants have been most welcome, for many businesses the support does not cover all or even the majority of their overheads. Thus, it’s worth exploring other avenues to control costs and also financing options to bridge the gap in the short term.
Remember what made your business special
It can be easy to lose sight of what made your business special in the rush to do things differently and the situation we all find ourselves in. But humans are very adaptable and there is positive news with vaccines etc. and one day the world will revert back to something closer to what it was and at that time businesses need to be able to capitalise upon the opportunities that present themselves. Until then, we all need to keep going. John Kinloch Anderson, CEO of Kinloch Anderson