How Businesses Could Have Should Have Would Have Prepared For An Inevitable Disaster Like COVID-19

In May of 2020, the Colorado State University Net Impact chapter hosted a webinar focused on the logistics of running a business in the wake of a global pandemic. Our panelists included a locally owned business in Fort Collins, CO as well as a larger business based in Memphis, TN. The business owners and IT specialist we spoke with highlighted key takeaways from their experience that helped them prepare and/or react to COVID-19.

With this document, we aim to take the lessons from our conversation with professionals and present the key points in a way that is informative and memorable. We hope this document will help to inform curious folk about how to build sustainability and resilience into their business and professional practices to promote a more informed and prepared community of business owners and operators.

While many of us may have never expected or believed that something like COVID-19 would sweep through the entire world, experts have been speaking to the potential of a global pandemic and its consequences for the world for quite some time. For example, Dr. Jonathan D Quick studies epidemics on a global scale and focuses on how countries can prepare and prevent massive detrimental consequences of an epidemic. He wrote in his book, The End of Epidemics: The Looming Threat to Humanity and How to Spot It, published 2018, that “a new pandemic could kill more than 300 million people worldwide” and “reduce global GDP by 5 to 10 percent -- an impact equivalent to the financial crisis of 2008”. GDP, which stands for Gross Domestic Product, is a well known measure of a country’s economic health, calculated by the “total monetary or market value of all the finished goods and services produced” in a country (2). It tells us about the size of an economy and whether that economy is growing or not and can be measured annually and quarterly. In the wake of COVID-19, the United States’ GDP saw a decline of 4.8% (1, 3).

Is there anything we could have done to avoid such a dramatic change in our economy? Should we prepare for something similar to happen in the future?

Whatever your take is, it is very likely that whether or not covid-19 sweeps through the nation again, you and your business could experience an unforeseen circumstance that presents as a disaster to you and your work. This leads us to our first step of building resiliency and sustainability into your business.

Step 1: Make A Plan

To avoid falling victim to an extreme event, every business (and we mean every business) should build out a Disaster Recovery Plan. The plan for you and your business needs to be context specific. While everyone has been affected by COVID-19 (and could be hit again by this virus or another epidemic), some disasters are not as likely to occur to one business as they are to another. For instance, living in Memphis, TN a business may be prone to natural disasters like tornadoes and flooding compared to a business in Fort Collins, CO that may be more susceptible to wind, hail, or snowstorms and a business in California may likely be affected by earthquakes. Do your research to understand what kind is typical for your environment to have a better idea of what are the likely disasters for your location. If your business grows, consider investing into areas that are not susceptible to the same kind of disasters.

Thirdly, it is one thing to plan for a disaster, it is another to know what to do during one. If there’s anything we have learned from COVID-19, your plan should include Work From Home Plan. This not only means imagining and preparing from what working from home would look like, but actually performing a runthrough of the situation. Practice is absolutely essential in your planning process. While the professionals in Memphis who we spoke with had a detailed plan in place, they did report that performing a “drill” where employees worked from home for a few days or a week (in advance of any actual disaster or epidemic) would have been a smart move. That way, after test-running working from home or limiting personnel in the office or switching systems, the company and employees would have had the opportunity to identify any weaknesses and reconvene to discuss, alter, and improve the plan.

This leads to our second step which focuses on the technological side of preparing your business for a disaster.

Step 2: IT is Key

It’s pretty obvious that most, if not all businesses, are operating in some way online, even if only through means of communication. But, this does not mean that every employee has access to the same internet access or technology at home as they do in the workplace. Depending of course on the workforce and employee responsibilities, consider how prepared your business should be to provide things like: wifi/internet hotspots for employees, laptops and chargers, training on IT systems and security. Some jobs that were not heavily based on online work may suddenly become extremely tech-oriented, like customer service or taking orders. Ensuring that employees will have access to the required materials is key, but equally as important is making sure that employees understand how to use the technology efficiently and safely by investing in the appropriate training prior to any disastrous circumstances.

If your business has anything of importance on servers or computers, make sure to be redundant in your planning. The IT expert we spoke to stressed the importance of never, never having just one server. If you are a business owner or head operator and are not experienced in IT, do not stress. Hire an individual to come into your business and create redundancy and ensure security in your IT. This may mean having multiple servers (and a secure cloud system) that will be updated with your business’s important information and essential operational systems and keep them safe with the relevant security measures. Seeking help outside of your establishment is a great way to build relationships and ensure the resiliency and success of your business.

Step 3: Build Strong Relationships with Outside Partners

While we can’t be experts in everything, we can befriend (and hire) others with the expertise that we need to build a successful company that can effectively navigate disasters. We can make connections in the local and global realms, that promote societal advancements that can create a healthier and more prosperous community.

As mentioned earlier, while you may not have IT expertise, seeking out someone to hire on and consult on how to best prepare your business is a very smart move. One panelist spoke to his relationship with a local banker and how this connection aided in his process of getting into the Paycheck Protection Program, a funding program that serves to help small businesses keep employees working.

Additionally, forming partnerships in your local community can provide benefits outside of financial gain such as promoting positive societal and environmental impact. As reported by the Harvard Business Review, “Working collaboratively with a sense of permanent community—what we call place-based co-ownership—reinforces important long-term relationships between partners.” (5) They insist that, “For businesses to survive and succeed in today’s globalized, hyper-connected world, business leaders must be willing to embrace collaboration as a guiding principle, more so than competition.” (5)

The spread of COVID-19 has clearly highlighted how interconnected we all are. And similarly, the wellbeing of one business in a city is interconnected with the wellbeing of another. We recommend, as business owners and operators, that forming partnerships will not only help promote a better society but could also provide essential relationships that serve to help you and your business if and when another disaster hits.

Step 4: Avoid Debt

As you may or may not know, it is important for a business owner (and an individual) to stay out of debt. Our panelists stressed the importance of planning safe and future-focused ways of obtaining funding for you and your business. While it is not always an option to avoid debt, there are many opportunities that you may not know about to secure funding that at least minimizes the debt you may have to take on. Do you research, get online and start googling funding opportunities for people like you with a business like yours. Be strategic, think of your branding, and search for organizations that align with your goals and your future plans.

Along with doing your own research on funding, it is smart to seek guidance on your options by consulting financial experts that can point you in the right direction. If you cannot avoid debt, you will probably find loans that fit into your plans. If you are to take on debt through a loan, you cannot overestimate the importance of understanding interest rates. When speaking with an expert about loans and taking on debt, whether it be a friend or a banker, or doing research online make sure you come to understand exactly what an interest rate will mean for your level of debt and your future financial status.

Step 5: Strike A Healthy Balance Between Your Business and Your Identity

If one day your dream of starting your own business comes true, rejoice in that achievement and be proud of how far you have come.

While your business may feel like something with life that you have created with your blood, sweat and tears, it is important for your wellbeing (and that of your business) to have a clear divide between your Self and your Business.

By creating a balance between who you are as an individual and who you are as a professional, you will be able to make smarter decisions about your business. With a thoughtful balance between your identity and your business, also you will be better equipped to overcome the hardship and challenges that you are bound to face along the way. Your business’s failures and successes will not always reflect your failures and successes, and your personal failures and successes will not always reflect your business’s failures and successes.

Conclusion

By thinking about the possibility of unforeseen circumstances and how disaster can affect our lives and our business, we can be better prepared for the future. Creating plans, collaborating with others and building a strong foundation for a business, steps can be made to build sustainability and resilience into any business. We hope this brief guide has sparked new ideas and conversations and can serve as a useful tool for anyone looking to own or run a business one day.

End Notes

1. “An In-Depth Look at COVID-19's Early Effects on Consumer Spending and GDP.” The White House, The United States Government, Council of Economic Advisors, 29 Apr. 2020, www.whitehouse.gov/articles/depth-look-covid-19s-early-effects-consumer-spending-gdp/.

2. Chappelow, Jim. “Gross Domestic Product (GDP).” Investopedia, Investopedia, 1 June 2020, www.investopedia.com/terms/g/gdp.asp.

3. Thorbecke, Catherine. “US First-Quarter GDP Contracts 4.8% in Coronavirus Crisis, Ending Record Expansion.” ABC News, ABC News Network, 29 Apr. 2020, abcnews.go.com/Business/us-quarter-gdp-contracts-48-coronavirus-crisis/story?id=70392560.

4. Quick, Jonathan D., and Bronwyn Fryer. The end of epidemics: The looming threat to humanity and how to stop it. St. Martin's Press, 2018.

5. Buffett, Howard W., and William B. Eimicke. “How Companies, Governments, and Nonprofits Can Create Social Change Together.” Harvard Business Review, 31 May 2018, hbr.org/2018/05/how-companies-governments-and-nonprofits-can-create-social-change-together.