What Happens Next? — Planning for the unexpected!
The world’s business community is currently reacting to the COVID-19 pandemic in various, different ways. One of those is that all but essential commercial and military aircraft are being grounded for the foreseeable future with wide and varied consequences.
This is not the first time this has happened. On September 11th 2001, there was a tragedy so devastating and unexpected, that the world reeled from it and the aftermath of it. All businesses in the Western World which were connected to aviation, whether ground or air based were affected irrevocably.
The immediate cost of the devastation was obvious and awful, but what many people may not realise was the ripple effect of the aftermath, spreading out from the aviation industry into businesses which serve it on many levels.
As you may be aware, for at least 3 days no airlines flew into or out of US airspace and most larger airlines in Europe and the UK were also grounded. All flights were cancelled immediately, and planes were parked literally where they had landed prior to the lockdown. Many US airfields stayed closed long after those 3 days until they could re-open with tightened security controls.
What is probably less well known, is that some airlines used this time to cancel and stop most of their subcontractor work, both airside and groundside. All maintenance facilities, building and engineering work was stopped, and ongoing contracts were renegotiated before they were renewed.
This meant that any business solely reliant on the airlines for work (facilities specialists, engineering contractors and catering contractors) had to renegotiate new contracts of service, even for projects which they had already started and were financially committed to.
The airlines in question used what had happened to hit the STOP button — if only for 3 days and as a result many smaller subcontractors struggled for months afterwards. Some sadly went out of business. The effect of the sudden and total halt in cashflow to contractors and subcontractors was as if somebody had lined up a row of dominoes hit the first one and then watched as they went down, one by one wondering which were able to stand back up.
So why have I brought this up now? Because it is very pertinent to what is happening now. In 2001 the aviation industry hit the stop button for 3 days and the effects were far reaching and for some permanent, however aviation is just one aspect of the logistics industry, what we are currently experiencing is far bigger.
Now the government has hit the STOP button on travel for ALL industry that is not considered essential for survival right now, so all ‘nonessential’ journeys, by road, boat or air have been suspended for much, much longer than 3 days.
As businesses we must understand that those who survive when the lockdown in each country is over, not just follow the rules on lockdowns, taking furloughs and sick leave, and then wait it out expecting everything to go back to the way it was before, we must do much more.
It will not be the same as it was, just as airport security was never the same again after 2001. The trading face of Industry may now be changed going forward with increased homeworking and communications at a distance being the new normal.
My experiences working with businesses in 2001 and 2002, taught me some hard lessons, and I have used my experiences from this time to help and advise many businesses since. This is now more relevant than ever!
As a business owner or director you are probably doing the following:-
· Taking stock of your business, your assets and liabilities.
· Assessing staff for furloughs, homeworking and sick leave.
· Checking for grants, business loans and other finance available to see you through.
· Holding back on creditors where you can, trying to pull in funds where possible.
· This is in effect the hurricane reaction, you are battening down the hatches and pulling everything closed until the storm passes. This is not wrong, but it is only part of the job.
Are you also doing these?:-
· Reviewing your marketing and advertising? What your business does and publishes now will keep you in people’s minds, you want it to be relevant and current. You also want to be noticed.
· Using the possible technology/manpower at your disposal to diversify to assist with medical products, or current high priority needs?
· Checking out your market, have you had to completely shut up shop, or can you use this time to diversify and look at new markets and avenues? Perhaps as a dry cleaner you had to shut the shop to customers’, however can you collect from their door and deliver? Many pubs and restaurants have looked to a delivery service for the basic versions of their menu. Most haven’t, but which would you remember after the lockdown lifts?
· Are you advertising your business well? Is your website up to date informing your customers of what you are doing now and what you expect to be doing in 3 months’ time?
· Have you checked in with your clients to make sure that they are OK? Do your customers know what good you are doing right now? Make sure they feel cared for and they’ll remember you!
This is the point, are you ready for when the ‘storm’ has passed and the lockdown is lifted?
Back in 2001, the contractors working out of London, New York and San Francisco had very little time to react to what had happened. With this virus we have time, time to assess, plan and to start to execute what we want our business to be and where we want it to be.
If you think your business really WON’T survive, now is the time to talk to somebody about it. If you think it can, but need help planning for it now is the time to talk to someone about it. The internet is alive with mentors, coaches and accountants who are ready to help and most won’t charge for an initial consultation, we certainly don’t at Aviatrix.
In business as in life we should always look to the 3 P’s, Planning, Planning and Planning! Our previous plans may not work now, so we have to come with new ones that do.
There will always be the unexpected on the horizon, though usually not on such a global scale! How we react will define both ourselves and our businesses.
Stay safe and start planning for the future you want.
Ella M Doherty FCCA