The global expansion of the coronavirus COVID-19 accelerated last week. The World Health Organization (WHO) and the US’ CDC have recommended preparations for the arrival of the coronavirus epidemic to most countries around the world. The question seems to be when rather than if it will happen.
There is no reason to panic, but people and companies – startups included – need to plan for the potential impacts of a pandemic. Here I recommend some actions that startups should take in this preparation.
The biggest expected temporal disruptions for businesses seem to be temporal breakages of supply chains for physical products (which is already happening in some sectors) and forced closing down of public areas including workspaces.
Based on these, I strongly recommend your startup prepare business continuity programs if you don’t have them already, that provide road maps on how to continue operating if most of your workforce has to operate remotely and only skeletal crews can work onsite. If you already have plans, revisiting them for this situation is a good idea.
Your plan should include at least three key areas: 1) remote working, 2) communication protocols, and 3) key tasks backup plan. Let me explain each one of them.
For the first point, you should assume that all or most of your team might need to work remotely, likely from their homes, in case of authorities restrict people from public areas, prohibit using workspaces, close down public transportation, or other similar measures. Also, some of your collaborators might get mildly sick or be concerned about going to offices where many people congregate. Likely most technology startups are ready for remote work and many already offer home office work schemes, however, you need to plan for 100% of the team to be forced to work this way for some weeks.
For example, one of our startups – Sirena – offers a tool to simplify the WhatsApp communication between companies and their customers. Integrating Sirena’s solution allows a startup to manage that communication by many team members in remote locations.
On point two, your startup needs to have communication protocols established likely over email or chat tools that allow maintaining the communications in the organization working orderly, especially in emergency or critical situations. Clear maps of who and how to communicate critical messages must be designed, so communications are fast and efficient, and nobody is missed.
Finally, you need to establish backup plans for critical positions identifying who should continue managing key processes in case team members get disabled to work for some time due to the virus. If people get severely sick, they might need urgent medical attention, and then you might not have time for smooth transitions if there were not planned beforehand.
It is recommended to set up one or more crisis management teams with clear plans and autonomy to act quickly in emergency situations. You can read more about business continuity plans in this article from the Harvard Business Review.
A pandemic might bring a negative economic impact on your business. For example, some businesses might experience temporal drops in demand especially if they depend on consumers visiting public areas. Preliminary figures from China show dramatic reductions in consumer spending (although e-commerce seems to have some positive increment). Some of us experienced the H1N1 outbreak in Mexico in 2009 (which was much milder than this one) and it wasn’t a pretty picture for many businesses as consumers initially couldn’t go out or go shopping and later were not confident to do so for a while.
Also, plan for supply disruptions if you have physical products. Increasing your inventories in case you expect your supply gets interrupted might be a good plan. Of course, this might have cash liquidity implications to consider.
This is not time to panic, but time to prepare. If current measures by countries around the world are effective, we might not see negative impacts and your plans would not get activated. If the pandemic extends, then you will be better prepared.
Let’s hope and work for a minimal impact in human and business costs of this (not yet a) pandemic!
You can see more useful recommendations for founders in this post by Elad Gil.