As companies navigate the second wave of the COVID-19 pandemic, the importance of a contingency plan cannot be overstated whether you use it or not. 

The reality of the return to level 3 lockdown has revealed that change is the only constant we can count on in the near future. The “new normal” business environment means we will have to be flexible and agile to adapt to the resurgence of the pandemic. Be proactive by having contingency plans in place to protect the health and safety of your employees and ultimately safeguard the survival of your business.

Being prepared for the second wave

The resurgence in COVID-19 cases since the beginning of December 2020 should be raising new cause for concern for business owners.  The major contributor for the surge in cases is “poor human behaviour” by the general South African public in not adhering to social distancing regulations, crowds and parties. (Professor Barry Schoub). 

It is vital that we have contingency plans to deal with the eventuality of the stricter restrictions and to negate the adverse effect on the businesses. 

Sectors such as retail, tourism, commercial real estate, entertainment and hospitality, and restaurants, have already suffered substantial losses. Further bans on the sale of alcohol will further plunge already distressed hospitality and entertainment focused businesses into a deeper financial quagmire. 

Apply lessons learnt from the first lockdown

We cannot place reliance on financial assistance from the government during this resurgence simply because of what occurred during the first lockdown.  Business owners should rather focus on all the advice from various people and implement the necessary measures to reduce overhead expenses and manage cash flow. 

if you do not have a business continuity plan in place or have not reviewed it in a while, now is the time to do so.  

Some key lessons businesses should incorporate include: 

1. Cash flow is key

January and February are generally known for weaker trading conditions in the normal scheme of things. Now, in the face of renewed fears of contracting the virus, trading conditions are anticipated to be even more adversely impacted. Taking swift actions to manage potential cash flow issues can help your organization prevent running out of cash and stay solvent. Talk to creditors and funders and perhaps ask for deferments of payments and moratorium on interest.

2. Focus on employee wellness 

Employee protection is vital for the good health of the business.  Addressing your employees’ concerns in an open and transparent manner. Work in shifts to ensure there are not too many people in the office at the same time.  Try not to embark on a retrenchment programme, even if it means cutting staff working hours or salaries temporarily. It is also  essential to implement the necessary safety and hygiene procedures to ensure people returning to work do not enter the workplace and infect others. 

3. Keep your overhead expenses in check

Iit is essential that costs are kept as low as possible and liabilities are managed. Negotiations with key creditors will be key to this strategy. Implement cash conservation measures by cutting all unnecessary costs. This can make a tangible difference to your cash flow, freeing up vital funds and immediately improving liquidity. .

4. Stay positive & don’t panic 

As always, in such situations, we have two broad options: fight or flight.  Instead of sticking your head in the sand and waiting for the crisis to pass, approach it head on. Use these unique circumstances to innovate, solve new problems,  identify opportunities, and find new ways of working.

Don’t wait until it’s too late

We have clearly seen over recent months that one plan does not fit all scenarios. Looking ahead, embracing contingency plans in the face of a second wave of the pandemic is key for business survival. Acting early and quickly can be the difference between success and failure. Instead of waiting until it’s too late, plan for the unexpected by having a robust and stress tested contingency plan in your arsenal. Hopefully you will not need to use it.