The world is facing an unprecedented situation of lockdown which was previously seen in Hollywood movies wherein everything had doomed and one Hollywood Hero would act as a saviour for the whole world. USA used to take charge of such kind of situations and had all the abilities and the tricks to take out the Amrit from Sagarmanthan.
Everyone is locked inside their houses and are worried about the future impact of such lockdown on their businesses.
Steps to be taken during and after lockdown situation, are given below in question answer format for a clear understanding with the help of below two:
Janya ( a fictional character who is very inquisitive and questions everything)
Tanishi ( a fictional character who has got great acumen and has all the answers
Janya : What will be the impact of lockdown on my business, I have lost contact with all my vendors, suppliers, workforces, bankers. I don’t know my liquidity without my team of accountants and subordinates
Tanishi : What is due to happen will surely happen and the tests of patience is now. Remember this whole business unit had been set up by you when you started from scratch. This is the similar (not same) situation where Fortune Favours the Brave. Following steps to be taken :
♦ Talk to your customers regularly and be well prepared. Mapping your customers and prepare a checklist of them as to how much transactions come from each of them. List them in an excel sheet starting from top to bottom to prepare your best course of action.
♦ Talk to your suppliers, subcontractors and service providers to avoid last minute surprises. Keep in touch with them to know their will and financial will to continue the business. Jot their names, if anyone has specifically told that he won’t be able to continue immediately after opening of lockdown, may be he has gone to his home town, may be his work force has gone to home town; keep your action plan ready to avoid any surprises.
♦ Talk to your employees regularly and keep them motivated and engaged (group meetings, offline documentations and skill upgrading trainings). Keep sending some motivational messages and try to keep them busy for at least 3-4 hours in a day for routine office work or upgradation trainings.
♦ Plan actions to bring back workforce quickly after lockdown.
♦ Explore alternate suppliers and service providers as backup plan. To avoid any surprises, if someone has moved down and out, keep the backward and forward integration and system flow complete.
♦ Explore opportunities for employing local workforce. Once, the workforce goes to home town, they always take time and may sit at homes to assess the situation and may come little late after opening of lockdown. So, tap local workforce, may be, at a higher remuneration to keep the machineries running till the old ones join back.
♦ Talk to your bankers and discuss on ways to ease out financial burden. Maybe with increased working capital limits, the liquidity crunch can become a little easy to bear with.
♦ Prepare a plan to improve liquidity and cash flow. Cash would be required immediately to burn the fuels and to get back to full production capacities. Be prepared to infuse own capital and loans and make a roadmap in advance for such cash flows.
♦ Create a priority checklist for payments due and do payments. As you require the funds, your supplier also requires the funds. So be prepared to receive and attend their calls for the same. Make a formula of payments every week so that his and your liquidity is maintained.
♦ Don’t hesitate to write to your customers on payment dues. Renegotiate contracts with all relevant parties for mutual benefit. Debtors need to start making payments to ease out your liquidity crunch as well. Devise a weekly or 5 day payment neft/ rtgs mode as convenient to both of you.
♦ Take stock of the current inventories and prepare an action plan. Some inventories may have withered down, may not be in demand as a hot cake after the lockdown. Try to dispose the uncalled for inventories as soon as possible to bring some cash flows and reduce the inventory carrying costs.
♦ Ensure that machines are ready to start immediately after lockdown. Plan for the spare parts, consumables and other support materials.
♦ Plan if any long pending activities can be done at your works. Review your current processes, templates and checklists for all functions.
♦ Create a business plan and do detailed budgeting for next financial year. Create a plan of action to protect your business from future crisis
♦ Carry out performance appraisal works for your workforce.
♦ Review your organization structure, resource needs and recruitments. Explore opportunities for acquisition of companies
♦ Join online courses, read books and upgrade your skill levels. Maintain healthy relationship (Employees, Suppliers & Customers) with all stakeholders
♦ Take care of your physical and mental health
Janya : Wow, this is a great action plan and need to be executed . What will happen after the lockdown is over.
Tanishi : After the lockdown, be prepared to work extra hours, to receive continuous phone calls and try to answer every call personally.
♦ Ensure that your plan for improving liquidity and cash flow are executed.
♦ Prioritise activities to get back workforce immediately.
♦ Visit your suppliers, subcontractors and customers to understand ground realities
♦ Be flexible and offer necessary support to all your supply chain partners Focus on cash flows for the short term and profits later
♦ Take necessary steps to shorten your cash cycle
♦ Focus on your employees and address them regularly – keep them positive and motivated
♦ May be initially, make a system of providing cab facilities so that each may reach in time. Give some breaks in office initially since there can be a complacency and laziness after many days and doing work will be an uphill task since everyone is human.
Janya: Wow, this is great. I am going to work on it immediately and will get back to you to bring the positives. Thanks
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