March 19, 2020
2020 is shaping up to be an eventful year – maybe a little too eventful. We entered 2020 on the brink of a recession, with the world economy expected to grow only 3% – the worst performance since the global financial crisis of 2008. Then the Coronavirus hit, hard and fast, when we were least expecting it. COVID-19 made the precarious economic situation worse, like pouring oil on an already raging fire. Experts at the National Economic Council are claiming we are now smack dab in the middle of a recession, the onset of which was hastened greatly by the global pandemic.
We won’t mince words: As a business owner, you are facing tough times. There will be losses. You may have to hunker down and dig deep to pull through. But the situation isn’t hopeless – far from it. Businesses are banding together during these tough times and helping each other out. They’re also coming up with innovative approaches to surviving this crisis, setting an example for you to emulate. And let’s not forget all the assistance the government is offering.
You’re not alone in this crisis. It’s a storm, doubtlessly, but you can weather it – and even thrive through the storm.
The Coronavirus pandemic is expected to last for 2 months at the very least. You need a game plan to see you through. COVID-19 has been a major disruption worldwide. There have been travel restrictions, supply chain and distribution shortages, event postponements, stock market closures, and other problems. The U.S. has been especially hard hit.
The exact problems your business could face depend on your industry and location. The construction industry is affected, but it’s stable. Mining or oil & gas, transportation, employment services, travel arrangements, and the hospitality industries are most at risk.
We cover 7 challenges your construction or other business may face because of the Coronavirus and offer some advice on how you could deal with the fallout:
Material delays are now commonplace, particularly in the construction business. With material delays come production hiccups and disruptions and missed delivery deadlines. Why material delays? A large portion of imported goods come from China, which has been the epicenter of the virus. Countless Chinese factories and companies have slowed production or shut shop. US-based companies relying on materials from China will feel the pinch until the country recovers.
If there’s less supply coming in, you need to find workarounds and know exactly what you have in inventory.. Find ways to make your supply chain more efficient and improve your inventory management. Some businesses are finding alternate suppliers in countries that are not so affected by the pandemic. Others are exploring local supply options. While prices of materials are still manageable, that may change. We suggest setting aside some extra funds for the future.
When the outlook is bleak, people go into survival mode and generally become more tight-fisted. That includes lenders, vendors, and clients. You can expect project cancelations, fewer opportunities, and less available financing in general. Lenders will do their best to avoid risk and be very conservative when underwriting projects until the crisis is over. Expect the material delays to add to the uncertainty.
Communication is essential. If you know your lenders, clients, and vendors are on edge, you can reassure them, make promises, and keep the money coming in. Offer help with their problems if you can. This isn’t a permanent slow down and things will get better soon. Be confident in your prospects and they will believe in you. Some companies are also exploring insurance options to mitigate the effects of delays and losses.
Travel bans are being enforced to prevent the spread of the virus. Internationally, the U.S. has banned travel to Europe, China, and Iran. It has also banned all but essential travel. While there have been no major outbreaks requiring local travel restrictions and quarantining of all employees yet, it could happen in the future. Cities with virus outbreaks like Seattle are at risk.
If employees can’t travel for work, they can still work from home. Companies like Apple, Amazon, and Google are asking some of their office workers to work remotely. Your company can do the same. Not only is this a great workaround for the travel ban, but it also keeps employees safe. What if the work can’t be done from home, like measuring stockpile inventory volumes? You can put drones and AI technology to work. Stockpile Reports can send out drones on behalf of your company, manned by our remote pilots, who will operate completely contactless and send your reporting digitally.
The primary challenge all businesses have is employee wellbeing. You need to ensure your employees don’t fall sick and can show up to work. Fortunately, employees are unlikely to get sick in industries outside of healthcare. However, the dangers of the Coronavirus are as much mental as they are physical. COVID-19 is making workers debilitatingly nervous. In fact, anxiety is being ranked as the number one problem employees are facing over government shutdowns and material shortages. Stress kills productivity.
Your workers may be physically healthy, but are they doing okay mentally and emotionally? We recommend sharing facts with workers and offering reassurances to reduce hysteria. Providing health instructions to workers – about how the virus works and the hygiene measures to combat it – will empower them. Companies are leveraging web conferencing and other tools to avoid sending workers out in the field unless necessary. For example, SR’s drones can automatically measure stockpiles for you. You don’t need to put workers at risk.
Thankfully, the Coronavirus hasn’t had as big an impact as the Spanish influenza of 1918, which infected an estimated 500 million people and caused 50 million deaths. We are better prepared for the Coronavirus because we are more aware and have an advanced healthcare system. However, it’s still important that you and your business do your level best to stay safe. And we advise doing your part to contain its spread.
We recommend playing it safe whenever possible. Physical safety measures you and your employees should follow include practicing good hygiene, avoiding non-essential travel, social isolation, and handling food carefully. Pay attention to the news channels and follow the guidelines offered by health officials. Don’t let your fear take over. Your survival rate has been 100% to date and it will stay that way if you stay focused and pay attention.
COVID-19 has sparked turmoil globally. Political tensions are high, with the U.S. and China taking potshots at each other and continuing to engage in trade wars. The stock market is volatile, to say the least. Gold and oil prices are hitting rock-bottom. All the global unrest has a ripple effect back home, with retirement and pension benefits drying up for everyone. There’s more social inequality. People are facing uncertainty, which causes them to panic and behave irrationally.
When you don’t know what to do, as they say, do nothing. Be still, wait, and watch. The answers will come in time. The worst mistake you can make is making decisions when you’re unfocused or over-emotional. This includes business decisions that will affect your company and employees. We advise persevering and continuing to move forward until things become more certain. Things will settle down in time.
Finally, there’s the money problems you may be facing because of supply shortages, work drying up, tight-fisted lenders, anxious people spending less, and the uncertainty in general. Small businesses with not-so-deep pockets are struggling the most to meet day-to-day expenses – like employee payroll and day-to-day operations.
The Federal Reserve is taking concrete steps to prop up the economy, so you can breathe easier. Eligible companies can expect help from the government directly. You may also be able to secure short-term loans for daily expenses. Lastly, you should consider decreasing operational expenses where possible, if you haven’t already. Many companies are tightening their workforce until they tide the crisis over.
The challenges businesses are facing are stiff, but not insurmountable. We expect companies that use their resources wisely, stay informed, and shield their employees best will come out of the crisis mostly unscathed. There are good times on the horizon – it’s all a matter of moving forward and persevering until you get there.
Get in touch with Stockpile Reports to learn what we – and our remotely-piloted drones – can do to assist you during the Coronavirus crisis.
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