In the 1930s an Ohio lawyer named Benjamin Roth kept a detailed diary about what he saw during the Great Depression.
When the depression had mostly passed, he summarised a few points he had learned from the debacle and wrote:
"Business will always come back. It will remain neither depressed nor exalted."
What are the ways that we can react to a crisis which will inevitably prepare us for that come back?
Whether it may be the Great Depression, the 2008 crash, or even COVID-19, each crisis is uncontrollable. What we can control is how we respond to it.
Our newly appointed Commercial Director, John Moran’s previous experience covers the 1990’s recession, the banking collapse of 2008 and five years of consultancy helping business with their problems. With over 30 years in business, John has seen a lot of distress situations and they are often seen as different each time. The virus disruption is very different from before, but the principles are the same.
John shares his tips on dealing with a crisis:
- Don’t panic. Control the controllables!
- Cash is king so do everything to preserve it. Manage all key stakeholders (banks, customers, HMRC, employees and key suppliers) to maximise cash in and minimise cash out. This is not a time to be thinking of profitability.
- Time is of the essence when you have a burning platform so less thinking and more action.
- Short term horizons are the next day and long term is one week.
- Communicate with stakeholders more than ever, particularly employees. You cannot underestimate the hunger for information and connection in these times. You cannot over communicate.
- Strong leadership is crucial, where every word spoken and every mannerism will be analysed in detail and will set the tone for the whole company. Always stay and sound positive.
- Believe in yourself. You are there for a reason.
At this moment, particularly make use of the Government support on hand and try and get to the front of the queue by being prepared. The Gov.uk website lists all the measures in place:
- Coronavirus Business Interruption Loan Scheme is for businesses which require a loan but have limited collateral. Under the scheme banks are offering 6 year loans, with no interest or capital repayments in year 1. There is also no requirement for a personal guarantee on loans up to £250,000.
- Coronavirus Job Retention Scheme where the government will pay 80% of salaries if employees are furloughed and not required to work.
- Local Authority cash grants for small businesses
- Rates relief for businesses in the hospitality and leisure industry
It is times like these that will test your business culture to the limit as staff are isolated and worried about their families and futures. Maintaining a sense of “us” and keeping up communication provides an opportunity to strengthen the bonds between us and be there for each other like never before. This will only serve to increase employee loyalty to the company and a sense that if they can get through this period, anything is possible.
If you would like support on the above or have any questions, feel free to reach out to John or our team, even if it’s just for a second opinion. We’ve been helping many of our clients react to the current crisis and would hope that we can be there as a sounding board.