- Socially distance yourself from others.
- Wash your hands frequently.
- Clean the surfaces you touch multiple times daily.
If you're like us, you've heard these directives over and over again in the last few weeks—and for good reason. The media is constantly reporting on what you should be doing to protect yourself and loved ones from COVID-19. And that is definitely first priority.
But if you're also a construction business owner or manager during this pandemic—particularly in a small to midsize business—you're likely losing sleep at night over whether your business will make it through a potential recession caused by the virus, too.
If you prepare now, your chances of weathering the coronavirus pandemic, like any other crisis, are much better. The bad news? But it's going to take some swift action and keen strategizing.
“We don't know how long this crisis will last, but we do know that it will hurt just about every small business. In uncertain times, it's more important than ever to take a look at your cashflow. It's always advisable to have some cash aside to ride out a month or so of bad business, however in these times, businesses should look at creating a bigger 'emergency cash fund' in case the slow down gets extended. So it's time to hunker down and preserve cash,” said Farhan Ahmad, founder and chief executive officer of Bento for Business.
He continued, “Although most businesses will see a reduction in revenues, some types of businesses may actually see a strong increase in demand. For example, food delivery companies, medical services companies, online businesses, etc. These businesses should not look at this as a time to increase prices and make a quick buck. Rather, this is a great time to establish better relationships with your customers. Show empathy.”
We, the CBO team, are appreciative that you, our readership, look to us for business advice in a boom economy. However, we know that advice and news is even more important during a downturn. Read below for an interview with Ahmad, in which he gives five tips for prepping your business for what lies ahead, how you can build in more remote processes on your jobsites and more.
CBO: What do you expect will happen over the next few weeks where businesses are concerned?
FA: You still need to keep your business running. I think we are hitting an ‘Aha’ moment, where more and more people are taking this very seriously. But not quite enough understand how this is going to go yet. As there is more access to testing in the United States, we’ll see the number of people who are testing positively increase greatly.
For our customers in particular, we will see a lot of companies who are currently working jobs or projects and are trying to reach as many milestones as they can before they are forced to halt work.
Instead of people coming home and working less, it may have the opposite effect. And that carries the risk of more people being exposed. Shutdowns will be done on a slow roll across the country. Hopefully we will start doing the right thing, soon, and we will be able to nip this outbreak in the bud.
CBO: What is your advice to businesses preparing for the worst? What should they be focused on doing right now?
FA: Normally, this time is an exciting period in which companies are building crews and doing a lot of planning for the busy season. There may be materials price increases, supply shortages and people who no longer have a stable income pushing projects off until next year. But there are things you can do to prepare. There is no value in sitting back and watching it happen.
1. Immediately—focus on eliminating unnecessary expenditures and improving your cash flow. Do that right now. Don’t wait until the economy actually slows down. You need to work to double or triple whatever reserve you have.
- Postpone nonessential purchases
- Cancel subscriptions you aren’t using
- Push any large purchases that you can out 3 or 4 months
2. Build a process to measure and be aware of where every single dollar in your business is going. It’s a good practice for the good times, too, but right now it’s absolutely essential.
3. Be sympathetic to your employees and help them out. Plan for them not to show up. Have a plan A, a plan B and a plan C in the event that they don’t.
4. We know that COVID-19 is most often transmitted through human to human contact, or touch. Unfortunately, the way most crews operate is through human interaction. Workers may come in multiple times per day to collect per diems, get or give management receipts, get orders, etc. Every time a worker comes in the office, the risk of spread increases. Minimize the necessity of this happening as much as possible. One way to do so is to move to a cashless system, like one with prefunded cards. With systems like Bento, we give the management a lot of control over how much employees can use the cards. While you’re going cashless, go paperless as well. All of these steps will help decrease the spread of the virus on your teams.
5. Lastly, reach out to anyone who could be a customer. People are isolated right now—or should be—and therefore, have some time to think. Stay in touch and let them know you’re in the community. Be thinking of creative ways to say you’re there for them now and will be a great business partner when we have made it through this pandemic. For example, you could offer clients a deal where, if they pay 5% of project costs now, you will give them a 10% discount on the project when you are back on the job and working at full capacity. When the dust settles down, those customers will come back to you and give you a running start.
CBO: What about advice for continuing work for teams that are essential to the being on-site?
FA: For employees who can’t work the same hours, the only thing you can do is staff more. Be the better employer. Convince people they want to work for you. How? By understanding the situation. If you’re offering systems, such as the cashless and paperless processes we talked about previously, you’re already showing that you want to create a safer environment for your employees.
CBO: Should small businesses depend on the loans the federal government is expected to disburse?
FA: A stimulus package is on its way. How effective, helpful, or soon the loans coming from that package will be in the hands of business owners, though, is still a mystery. My advice is to prepare for the worst and hope for the best. If the stimulus does come, you have more money and you have an advantage when we come out of a downturn. Every single step I’ve mentioned is still necessary. Don’t count on that money coming for your business when you need it.
CBO: What is your advice for building processes for remote employees?
FA: Processes are only good if people follow them. Now, there is software on the market that is much easier to use and every has a phone for the most part. Employ those tools in your business. If you have to do a lot of manual work to make the tools beneficial, it’s not worth it. Find solutions that help automate as much of your business processes as you can.
Specifically, find a solution that gives you information about what each employee is buying and when and where the purchase is taking place. Add notes to those and tasks for other teams. The software should integrate seamlessly with your bookkeeping. You should be able to know the state of your cash flow on a minute-by-minute basis.