First of all:
1. The virus, like all flu viruses, should go out with the arrival of the heat so we expect that things will have improved by April. By the end of March and the beginning of April we are expected to see a drop in the number of infections and from there on the government should slowly loosen the blockages. However, we cannot underestimate one aspect: for many activities the damage will be very important. Imagine the school canteens (and as a consequence the agri-food production), tourism, catering, planes, hotels, etc., in short, a strong hit.
2. You need to take a financial stress test:
a. If you are in sectors not related to hospitality (catering, hotels and what revolves around it) you must expect that apart from the last two weeks of February things will go rather badly (although we will fight to avoid it and to reduce the damage, see below) also during March and April. If you are out of those sectors and you are able to produce (you are not in a situation where the components must arrive from China) in April you will begin to update your activity and in May you should be back in full swing. Imagine, however, that March and April will also drop by over 50%. Do you have the money? If you don't have them, then:
i. Reduce costs that are not essential.
ii. Negotiate in advance with suppliers
iii. Negotiate, if you have a good relationship, with the bank
iv. Request discount on rent
Talk to all these people in advance and at least partially renegotiate the terms of the situation so that you can be covered under the cash plan. Postpone investments that do not bring an immediate return or a return in the short term but that undermine the company in an important way under the liquidity plan. Keep the cash.
If you had subscribed to the scrapping or installment of the Equitalia folders and you realized that you are not able to pay the next installments, please contact immediately INSS at info@imprenditorenonseisolo.it so that we quickly put you in contact with one of our accountants who can help you see what the best way to approach this situation is.
b. If you operate in hospitality-related sectors, you have to make a move and you have to start promoting immediately like a madman, especially if you relied on foreign tourists. At Easter many will not come and several may, due to the explosion of the coronavirus in their country or afraid of newspapers, decide not to take their summer holidays in Italy. Build and promote packages for Italian tourists, look in your database for all those who have already come to visit you and call them, visit them, find them. If they came once, they can come back. If you have a restaurant, start making offers, events, special dinners, agreements with companies for their meetings, etc. etc.
You should also do the financial stress test, just a little harder.
Expect to have revenue down as much as 50% until September. What would you do in such a case?
3. Recover money with debt collection by putting a person dedicated to the activity or, if you know you are dealing with a company that has not been affected by the measures against epidemic, you could also promote advance payment of invoices that expire in the future with a discount. It will allow you to have liquidity right away.
4. If you work with spare parts that arrive from the East, expect that there will be a hole that goes from three to six weeks in the supply chain. Try to find local suppliers or, if you have a full warehouse, you could hear some of your competitors and share your spare parts with them and have access to them. In China, where they learned about agility, there were restaurants that, having to remain empty, offered food for sale to the public and were also able to sell it.
5. OPPORTUNITIES: if you are one of those companies that has suffered strong competition from Made in China manufacturing, know that perhaps a season of opportunity could open for you: the Chinese supply chain is in great difficulty, there could be your old ones customers looking for the product and not finding it. Contact all your old customers even if you are no longer competitive and come back to make yourself heard. Even when this bogeyman passes, many companies, especially the more structured ones, will be afraid to rely only on a supplier in the east but will want to have back-up suppliers here in Europe. For example, you need to know that several American or British pharmaceutical companies are going through a crisis because India and China are no longer giving them antibiotics or ingredients for medicines. We could be competitive again. If the Chinese took your business away, well, maybe there would be a new opportunity.
6. Communicate with customers: inform them of what your business is doing, be transparent, show that you are willing to go the extra mile for them. If you and your company are still not present on social networks in an important way, know that perhaps this is the time to take them into consideration. Communicate with foreign customers: inform them that you are well and what is happening in Italy. Explain (if applicable) that no one in your company is ill and that you expect to be fully operational again (if you have been blocked in some way) by the end of March. Ask them to collaborate with their governments to reduce the chances of contagion, not so much for the medical effects, which as we have seen are probably not so serious after all, but for the very heavy economic effects that the measures against contagion would trigger in their countries.
Do not withdraw from communication: with customers, with sellers and with potential customers. Know that according to the decree of the Prime Minister last night, events or training are not prohibited but only events and training that create a gathering that violates the rule of distance between people. So do not cancel all the events and meetings you have planned: you would only lose ground. Stay in touch with your sales network. If necessary, create small meetings on the territory. Keep your company close to you.
7. If you operate in the sectors of education, training, entertainment, consultancy, fairs, know that new technology-based business models will take off more quickly having received an acceleration from the present crisis. The same could be said of everything related to smart working. The present crisis will give a strong acceleration to DIGITIZATION which after Coronavirus has passed will become a normal ingredient in our lives. Think about what's going on in high and middle schools with young people studying remotely and doing webinars: technology will change our lives and their lives even more. How can you make your company even more technological?
8. Explore new ways to bring your value: enhance e-commerce, if you are in hospitality, consider delivery by initially leaning on one of the many platforms that are there and becoming a student of this new activity. Don't abandon what you are doing now to just run after the new trend. Start distance learning by embracing webinars and directing Facebook to communicate.
9. If you realize that, due to the decline in the business, you are unable to meet personnel costs, immediately consult your consultant to activate the redundancy measures. I know, I hate them too, but sometimes there is no other choice to save the company. If you do not have a good job consultant who can follow you, ask us and we will quickly put you in touch with a business partner group consultant, accountants and job consultants who are business coaches. If you don't know what to do to reduce costs, just DON'T BE LOCKED BY FEAR! Come to one of our offices or to one of our events (where people sit strictly 1 meter away) and cry for help: we will help you. Don't go underwater.
10. If you have a sales network or an external network that visits customers, do not let fear take over but make sure that they have a project and that they visit customers or, if they are afraid, that they contact them via Skype. Know that, even in moments of crisis, the semi-finished products of the sale (fixed appointments, visits to customers, quotes, etc.) lead to results. If you go to visit customers, you collect something, if you are on FB to post on Coronavirus maybe a little less. There is nothing wrong with pushing your men.
11. Remember that even if there is a crisis, your creditors and the state will not want to hear from you. So you have to organize yourself so that even if you are in crisis, you are not all busy talking about coronavirus and buying masks and Amuchina gel. Put one of your staff to manage the crisis (or manage it yourself) but put a strong manager to push the business results (sales, service delivery, etc.).
12. Whether it takes a month, whether it takes two, this is for sure: sooner or later this story of the Corona Virus will end and then, whether the government takes measures for the economy or not, it will return to normal. The essence of this handbook is that when that moment arrives your company will be ready to seize the opportunities and start again. Because you know that there will be a restart. Agility, quick decision, versatility, desire to re-invent the business model, and even a little creativity, will be some of the new skills required to face this period.
Then know that at the end of this crisis, as it has been for all the crises of the past, you will find yourself facing a changed world. We will never go back to the way we were before, so what this tragic event that is affecting our country requires is to: a) survive, b) have the courage to get out of our comfort zone and reinvent ourselves. People have always defeated all the viruses on their way and have become stronger and stronger.
It will be like this once again.
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