As New Zealanders we all got to enjoy the 2020/21 summer season and made the most of our paradise playground – such freedom and so much space, however the new Delta strain (and news of more variants) has wiped our smugness away. Our general lack of enthusiasm towards getting vaccinated now means we have a long hard road ahead. It can only be said, how devastating another lockdown is for business.
During 2020, it was quite surprising how the Waikato economy kept ticking along. While Hamilton has often been portrayed as less exciting than Queenstown, Auckland and the like, it also means, thankfully, we are less reliant on the tourist dollar and more focused on a very strong agricultural and engineering base.
While most Waikato businesses have managed to pick up the pieces and carry on, there is no doubt there are real issues with businesses not being able to secure supplies. If a manufacturer experiences problems sourcing just one component in order to finish a product or job, this can be the difference between invoicing a customer and having an unfinished work on hand. If a business is unable to source stock to sell from its normal network of suppliers, it becomes a real challenge to generate sufficient income streams to run a viable business.
Some of the global supply issues are of course the run-on from Covid-19 on the world stage, but add to that the serious shipping backlogs, with increased shipping costs – and these problems are affecting both importing and exporting.
There are also unresolved issues around New Zealand’s border closures and businesses not being able to recruit the right staff at the right time. I think we all under-estimated the positive impact seasonal and casual overseas workers have on the NZ economy, particularly in the areas of agriculture and hospitality.
For me there are three parts to work through:
- What to do now
- What about yourself
- What to do longer term
What To Do Now
Review your resources, your future workflow and take stock of your financial situation. Consider the different ways you might be able to navigate your way through the next 3-6 months.
Consider your risks and rank them according to potential impact and consequence. Once you identify your risks, it allows you to look at possible solutions.
For example, if shipping delays are an identified risk:
- Look at sourcing your raw materials or products locally
- Are you able to order in larger quantities of stock to give you a higher chance of continuity of product?
- Modify your product lines to those that you can source and ship more easily
- Adopt a more aggressive stance in trying to secure shipping space through shipping brokers and logistic experts
- Consider airfreighting stock in rather than using conventional shipping (at additional cost but you may decide to sacrifice profit in the short term).
Touch base with your customers and check they are ok – let them know what your immediate plans are and how you propose to continue providing your best possible service in difficult times. Identify their immediate needs and keep them up to date on moving timeframes and availability of product.
Ensure you are up to speed with trading regulations at the different alert levels.
Try and streamline your processes so your customers are not impacted – as a small business you should be more nimble than your larger counterparts and this creates a competitive advantage if you can offer slick service in difficult times.
Of course, your staff are going to be worried, and you need to show strong leadership and keep them close to you. Let them know how the team will band together to get through this Covid pandemic.
Check in with your bank manager if you anticipate cashflow problems and think you may need additional funding.
Go online and check you are claiming any Government subsidies and financial assistance you are entitled to. There are also some useful on-line resources to tap into:
What About Yourself
When you are in the midst of a terrible situation like running a business in a pandemic, it is easy to feel like you are at the end of your tether, and you may have a sense of being overwhelmed through circumstances which you have not caused.
It can be a very lonely place when you are a business owner but be assured you are the not the only one feeling like this. Remember a problem shared is a problem halved so find someone you can trust who has good business judgement and talk things through. It is easier for someone who is not emotionally involved to offer unbiased, logical help.
What to Do Longer Term
While we are unable to travel and in periods of ‘lockdown’, use this time to plan. Try to turn your high levels of stress into thinking about the future, with an open mind. Consider:
- new ideas
- new products and services
- improved systems
- client relationships
- staff recruitment, training, and retention
- ways to improve cashflow
- ways to improve efficiency within the business
- the possibility of merging with another business
- retrenchment and restructuring
- the pros and cons of taking on another business partner
This process may help to reduce your internal worry by keeping your mind busy and hopefully will provide you with clarity. Try not to isolate yourself and keep connected to family and friends. The problem does not belong to any one person, so a team approach is best.