We’re not out of the woods and yet the success of COVID-19 vaccination drives in rich countries and the long-awaited start of South Africa’s mass vaccine programme suggest we can start thinking beyond the pandemic. Now is the time to start considering a long-term business plan—one that closes the gap between old business models and the new world.
The past year has been a baptism of fire for most businesses, whether they have thrived or struggled under various phases of lockdown. But for most, it has become clear that they can no longer simply respond to external events—instead, they need a recovery plan that will position them to navigate what comes next.
Here are a few steps to reshape your business plan for the next few years:
- Take stock of your finances
The first step is to dig into the hard numbers to understand how deeply your business has been affected. It’s helpful to generate profit & loss and cash flow statements to compare performance now, during the lockdown and before the pandemic. It’s important to take a nuanced look at the figures, not just the top and bottom line.
For some businesses, for instance, weak revenue numbers and the loss of some of their customer base may mask the fact that the picture isn’t as ugly as it seems because of lower costs. Others that enjoyed spikes in revenues could discover that their cost bases are rising or that a couple of months of really strong performance are distorting their annual numbers.
- Reapply a growth mindset
After hunkering down for more than a year, forward-thinking businesses are evaluating how and when to resume growth. Those that are not thinking ahead risk losing out to more aggressive competitors, who are thinking about how to consolidate their position in the market. Again, the process starts with taking stock of where the business is now.
In the words of Forbes blogger, Rebecca Lake: “If you’ve had to lay off some or all of your employees, you’ll need to factor that into your rebuilding plan. If you’ve cut your advertising and marketing budget down, or some of your customers have migrated toward competitors, then those are things you’ll need to account for as you identify financial resources to help you recover.”
With that done, you’re in a better position to think about when to reactivate projects you paused due to COVID and which resources you should marshal to drive the next phase of your company’s growth.
- Go back to basics
According to Harvard Business Review authors, Dev Patnaik, Michelle Loret de Mola, and Brady Bates, planning for a post-pandemic world means answering three questions. How does your business really make money? Who do you depend on to drive the business? What will people’s behaviours look like after the pandemic?
In answering these simple questions, you can start to think about the future more clearly. Answering the third question is perhaps the most important in understanding the answers to the first two. Patnaik et al say a useful lens to use for this analysis is to analyse three categories of stakeholder behaviour for clues about the future:
- Which pre-COVID behaviours and habits will people immediately resume when social distancing ends? For instance, many people will be eager to hold big social gatherings when they can.
- Which habits will be permanently transformed? For example, many people will continue to shop for at least some items online beyond the pandemic and to work from home at least some of the time.
- Which behaviours and habits will collapse or disappear? This is perhaps the hardest one to predict—we don’t yet know whether cruise ships, movie theatres and buffets will come roaring back to life.
It’s useful to look at how other companies in your industry and adjacent industries have fared in the pandemic. In addition, delving into customer data can yield insights into how your customers’ behaviour has changed and how the profile of your customers may have shifted. From these insights, you could identify areas where demand might drop or grow in the years to come.
- Draw up a new business plan
You may have needed to tear up your business plan in the wake of the pandemic; now is a good time to beginning putting a new one together. Using insights into your finances and changing stakeholder behaviours, you can begin to think about what the next few years may look like. This could include setting out aspects of your operating model like:
- To what extent will you keep driving sales, marketing and service through digital channels going forward?
- What mix of on-premises and remote work do you foresee?
- Which human resources do you need to resume growing? How will the skills you need from them change?
Rebecca Lake advises: “When going over your business plan and business model, get clear on your business’s strengths and weaknesses. Then, look at what was working before that may not work as well now and see where you can adjust or improve to remain competitive. Finally, don’t forget to revisit your business goals to make sure they’re realistic, given the current circumstances.”
Plan for future crises
The major lessons of the coronavirus pandemic is that a crisis can come from any direction. Leading businesses are therefore planning for the future understanding that disruption is inevitable. Rather than creating a monolithic business plan, one useful approach is to outline multiple scenarios in terms of how technology, customer behaviour and external factors may affect your business in the years to come.
As Lake writes: “The more outside-the-box thinking you can do to prepare for a worst-case scenario, the better. Having a Plan B (and even a Plan C, D, E and F) can help improve your business’s odds of surviving—and eventually thriving again—during tough financial times.”
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