By Chris Risher, Onepath
By now, we’ve all heard the term “flatten the curve,” but you might be less familiar with COVID-19’s domino effect. The domino effect refers to COVID-19’s negative impact on multiple businesses, one after the next. For instance, when one business shuts down, a partner company might suffer financial pitfalls. And if that partner suffers, its clients might have fewer resources, support, etc. to complete their work, which can lead to further financial hits. In essence, COVID-19 has created a ripple effect, causing one business to fall after the next. And if you don’t exercise caution and prepare for these losses, the next domino could be yours.
As COVID-19 continues to overhaul the economy, it’s naïve to assume your business won’t be affected. And as businesses continue to furlough and even shut down, your focus must shift to financial stability. Preparing for the future means knowing your current cash position and understanding how it might change. By recognizing the financial risks involved in a pandemic, you can better prioritize your spend and avoid heavy, potentially business-ruining losses.
Here’s how to avoid COVID-19’s domino effect and keep your business afloat:
Prepare To Lose Business (…But Try To Keep It)
As we said earlier, COVID-19 is causing many businesses to close up shop. If you’re a small company with just a handful of clients, losing even one of them can be disastrous. Thus, you must understand exactly how much your company can endure financially. And if that number isn’t high, now’s the time to increase your cash reserves by cutting unnecessary costs.
Of course, it’s better to keep a client than to prepare for business without them. For this reason, you should prioritize meeting your clients’ needs and keeping them happy. And if someone isn’t satisfied, it’s important that you fast-track a solution. Even if your resources are lacking, this isn’t the time to drag feet—it’s time to put your all into excellent service and communication.
Prepare For Increased Demands (And Less Resources)
As the pandemic continues, your clients will need more help than usual. Many of them are working remotely, which comes with new needs. Additionally, some clients may suffer a decrease in staff, which will come with several problems of its own. To add to the domino effect, your clients’ clients are probably relying heavily on them, which will make your company’s support more essential than ever.
Unfortunately, your company is probably facing many of the same financial pitfalls as your clients. With more demands and fewer people, it only makes sense that you’re struggling, too. However, it’s important that you deliver on promises and adequately prioritize clients and issues that need you most. Fortunately, data can help you understand which problems are most time-sensitive and which strategies can offer the most help, quickly.
How Can Data Analytics Help Me?
When making informed decisions, data is key. And because you’re about to make multiple business-critical decisions, having—and understanding—the correct data sets are fundamental and foundational. Data analytics keeps you informed of pressing issues, monetary needs, and recurrent problems. And by identifying this data, you can prioritize concerns and take the proper steps toward addressing and fixing them.
If you want to avoid becoming another domino and dodge these financial pitfalls, it’s important to know where your company stands. Are you able to endure losing a partner, a vendor, or a client? And can your company excel with limited resources? Similarly, what support do your clients need most, and are you able to provide that support? As COVID-19 continues to create a new normal, your own normal must adjust as well. And through a deep dive into your company’s data, you’ll understand what your current normal entails; how it might change; and how to withstand—and even grow from—these changes.
About The Author
Chris Risher is Senior Program Manager, Application Management Services at Onepath.