Impacts of COVID-19 & Preparing for a Second Wave
An unprecedented time in history and a bright new future
The COVID-19 pandemic has brought about massive changes, positive and negative, on virtually every industry worldwide. It seems like years have passed since the World Health Organization declared COVID-19 as a global pandemic on March 11, 2020, though it has only been 6 months. In this article, we consider how far we have come in the business world, and how to prepare for what is coming.
In July, Carole James, BC’s Finance Minister, stated recently that BC’s GDP is forecasted to drop by 5.4% by the end of 2020, and 6.6% nationwide. Moreover, as a result of the pandemic, a staggering $12.8 billion deficit is forecasted by the provincial government. There has been a drastic decline in revenues due to lack of tourism and overall spending by citizens, and the nation is unsure of when consumer spending habits will ever return to “normal” – if at all.
From the inception of the pandemic, the number of cases in BC has remained low compared to other provinces. This being said, as local and inter-provincial travel increased over the summer months, a marked increase in active cases within BC (1,803 as of September 21, 2020) has been observed. Increases in the number of large gatherings, combined with a somewhat relaxed approach to pandemic protocols (mask wearing, sanitizing, and social distancing) are likely key behavioural contributors to this increase in cases.
As the pandemic has continued through the heat of the summer, any myths that the virus would die in heat have been debunked. With the combination of schools reopening, cold and flu season beginning, and people getting restless inside, an increase in our COVID-19 case load seems unavoidable. Business owners must now ensure that they have a response plan for a second wave, including considerations for the possibility of a second lockdown. As the old saying goes, “by failing to prepare, you are preparing to fail.”
Here are some tips for businesses to consider in preparing for the “second wave”:
Be ready to take another financial hit – now that businesses have seen what impact can come from a lockdown, you have more time to prepare for the next one. Tighten up cash flow, invest money using a diversified approach, and do not plan with the assumption that government subsidies will continue in the case of a further recession.
Stay in close contact with major customers and swiftly adapt to any new timelines they implement with respect to the delivery of goods and services. Similarly, coordinate with customers and track sales to determine what type of inventory has remained in demand throughout the pandemic. Use this information to adjust the production and revenue plans for the remainder of 2020 and into 2021.
Revisit your project management and internal controls over financial reporting if the accounting department has been working remotely and returned to the office and prepare to work from home again.
Have a phasing out plan – in the same manner that office attendance was phased back in slowly, it will be important to be prepared to begin phasing employees back to remote work if any indication of another lockdown begins.
Check in with your employees. This year has been the most challenging year of many people’s lives, especially with respect to mental health. It will be crucial to ensure your employees wellness is a priority when navigating further changes and disruptions to our “new normal”. Support your employees in coming to terms with remote work for an extended period. Doing so will reduce stressful uncertainty and help employees feel more comfortable investing in a quality home office arrangement.
Develop new revenue streams and focus on growing these throughout the next year. Countless companies began using their resources to make masks, sanitizer and other PPE for hospitals, which has made way for new revenues to counterbalance the loss of regular consumer spending.
In the words of Dr. Bonnie Henry, our fearless leader throughout this history-making year, “Be kind, be calm, be safe”. On behalf of the team at Decision Point Advisors, keep on social distancing, wearing your mask, and washing your hands!