The Coronavirus Is Coming: What To Expect

The Coronavirus outbreak has caused many entrepreneurs to wonder about their businesses in the event of unforeseen interruptions in the supply chain. We spoke with business coach Erica Douglass to get her insight on how Covid-19 could affect your company and what you can do to plan accordingly.

Have you already experienced a loss of income as a result of COVID-19? Switch over to our coronavirus small business resource guide for information on loans and grants you may qualify for.

Supplies May Become Unavailable

With factories in China still closed, we're likely to feel the shortage here soon.

"Keep in mind that most packaging is made in China," said Douglass. "So even if a manufacturer has a part, they may not have the package for it. Now would be a good time to buy anything you need before June 1, especially if parts or all of it are manufactured in China."

"Having said that, it may be worthwhile to wait, if you can. We may see some good deals hit the market once China is given the OK to resume business operations."

That wait may be well into 2021, however. It will take time for production to ramp back up and fill the supply chain gaps created by the months of closures. Even then, orders from large manufacturers will likely take precedence.

Another option is to find new suppliers. While much of the world is deciding how to handle the coronavirus, few places are as shutdown as China. See if you can source supplies from the Americas, Europe, or India.

If you do find that your supply chain is impacted, be upfront with your customers. Add a banner to your homepage, put a warning on your product pages, or classify inventory as out-of-stock. It's important to be transparent with your customers.

The same goes if you're unaffected. Let them know they can still purchase the goods and services they need – especially if your supplies are a part of their home or business operations.

Sales May Drop

Business may slow as consumers cut discretionary spending to focus on essentials. Prepare to see a decline in revenue that's more significant than usual and may not bounce back right away.

In addition, be prepared for smaller-scale events (like crafts fairs and farmers markets) near you to produce lower turnouts. People are avoiding mass gatherings in an event to limit exposure and may be less interested in coming to local happenings, even if they're regulars.

You may even see more drastic measures occur for large industry conferences and tradeshows. Huge corporations like Facebook are cancelling summits. These occurrences are sure to increase.

As a result, sales, professional development, and networking may be stunted.

You May Be Quarantined

A quarantine is possible if the United States can't get the virus under control. If it happens in your city, be prepared with a plan that accounts for at least 14 days.

Contract Fulfillment

There's a policy in many rental agreements (if you're a brick-and-mortar store) called force majeure. The legal definition of force majeure is unforeseeable circumstances that prevent someone from fulfilling a contract.

"Reread your contract and see if this is something you can use to your advantage," said Douglass. "If your business is materially unable to continue for weeks or longer, you may be entitled to not pay. This could apply to rental agreements, manufacturing contracts, and more."

Employee Functions & Wages

It's a good idea to set up an emergency plan if you expect your team may be out of the office for an extended period of time. Decide if you can institute a work-from-home policy to maintain operations and minimize risk of spreading.

You may also want to draft a policy for lost wages employees won't receive while they're home. Douglass recommends having these plans in place even if they aren't mandatory in your area.

Repercussions

Without making light of the devastation and lives lost, there are some positive repercussions we may feel in the business world as a result of Covid-19.

If apprehension continues to grow with regards to international purchasing, it's possible we'll see a natural boost in domestic shopping. More consumers may turn to locally-sourced products and support small and local sellers.

In addition, you may notice a renewed focus on employee health and wellness. "In the past few weeks, people have become aware of how many people die from the flu annually, and that most of us are not washing our hands correctly," said Douglass. Offices have started adding more hand sanitizer stations and offering cleaning wipes for desks and equipment. It's possible this emphasis may extend to increased paid sick days, as well.

Douglass also believes that due to widespread shortages, there could be an increased awareness to the global environmental effects of high-polluting factories, low-quality products ending up in landfills, etc.

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We hope you and your family stay safe, and that your business doesn't suffer during this uncertain time.

If you have any questions about the state of our production, please don't hesitate to call us at 1-888-575-2235. Our operations are not impacted by the virus and we will continue to serve you to the best of our ability.