What does Coronavirus (COVID-19) mean for your business?

Coronavirus or COVID-19 has been causing worldwide panic, with stock market crashes through to toilet paper shortages here in Australia. While the Government has enacted travel bans and is putting out information on personal hygiene and how to limit the spread of this virus, businesses are already feeling the impact.

Already there is concern around supply chains with factories in China at a standstill and the workforce locked down in quarantine. The grinding halt to one of the biggest economies and suppliers in the world is going to have severe and long lasting effects on businesses and the economies of many different nations.

Coronavirus has already hit Australia with over 80 confirmed cases and while every precaution is taken to lessen the spread, there is a very real chance of a much larger outbreak. Even if the spread is limited what does it mean for your business? If your supply chance is compromised, your customers can’t buy and your staff are quarantined, how will it all affect your business?

Why you need a Business Continuity Plan

A Business Continuity Plan (BCP) is a set of procedures and processes of prevention and recovery to deal with potential threats to a business. The goal is to enable ongoing operations before and during the execution of disaster recovery. A Disaster Recovery Plan is a component of a BCP and is focused on restoring vital support systems.

In the case of Coronavirus a BCP would outline how to navigate a compromised supply chain, whether you have the systems in place to allow for staff to work from home, how travel bans may affect your business and if staff are cross-trained in other areas of the business.

What you need to think about

• Supply chains – If you import or export to China, what are your options? Now is the time to investigate whether local manufacturers can fulfill orders or if there is another more innovative solution.
• Cash-flow and financials – What is the impact if Coronavirus were to trigger a recession? Can your business sustain on massively reduced revenue? Make sure you understand your financials and if you need to extend supplier terms etc.
• Communication – Keep all your stakeholders informed and aware of what is happening in regards to coronavirus. Is stock delayed, is the business not accepting new orders? This goes for both customers and staff.
• Review technology – If there is a quarantine placed in your area or on your staff, do they have the technological resources to work from home? Are there processes in place with HR to allow this and are staff able to complete all their tasks from home.
• Cross train – Make sure that staff are cross trained at least to a basic level so there is no reliability on one staff member to do a vital job function. What happens if the one person that can do invoicing is hospitalised?

Even if your market is only domestic, in a global economy it is rare that a company does not have exposure to worldwide events such as coronavirus. Be aware of any key third parties you deal with such as suppliers, vendors or service providers and check with them that they are prepared.

Putting your BCP in place

Once you have mapped out your BCP and the areas of the business that may be the most impacted, it’s important to understand the amount of time these procedures will take.

As you review and update this plan, conduct walkthroughs and exercise, this will not only allow you to understand delays but will also identify gaps in your procedures. By conducting walkthroughs of these procedures you are also training staff and getting them acquainted with the goals of your BCP and ensuring all participants understand their roles and responsibilities.

At the end of the day, nobody can predict with certainty if coronavirus will continue to spread and affect more countries or if it will start to dissipate. If you are prepared and have a plan in place, then at minimum you have an effective BCP ready to go the next time there’s a threat to your business.

If you'd like to discuss developing a Business Continuity or Disaster Recovery Plan for your business please get in touch for a free initial consultation with one of our expert team.