COVID-19: Adapting to and Preparing for a Pandemic

small businesses

This is indeed a scary time for small businesses. In the ever so changing world, there are key questions to ask such as, have we been keeping inline and adapting with where the world is going? The world is changing at such a rapid pace that it is essential that businesses are thinking far beyond the short term and rather put their focus on the long term. One very important question is, how will the fourth industrial revolution and things such as big data impact my business? I was shocked to discover that enterprises such as Eskom are still operating on 3G, while the rollout of 5G is upon us.

Analyse your business

small businesses

This is the time to relook the vision and mission of your business. Will you still be relevant and will there be a large enough demand for your product or service offering in this digital age we find ourselves in? Simply put the product or service that you are providing to the market then ask yourself, how is the market accessing this product or service? Is this the most efficient way to render my service or provide my product?

This is definitely a time to collect a lot of freely available data to understand why businesses were not prepared and why others were prepared and make your own analysis. Online sales have largely increased. Now, those businesses that valued the importance of convenience and explored this mechanism of reaching their clients, are less impacted than those that rely on direct sales.

Take away points

– Identify your cash constraints, identify cost areas and eliminate these

– See where team skills can be redeployed to generate money elsewhere

– Clean up your admin backlog

– Ensure all your affairs are in order to reopen and stay in close contact with your clients

What should small businesses be doing during this time

It is critical to ensure that financial planning is performed. Protect your business by taking out the necessary insurance for loss of income. Just as we would for our cars and personal belongings, it is just as important to ensure that you protect your business. During this time perform research on what insurance you need for your business based on your risk exposure. We can only prepare for what we know and keep our eyes open for the unknown. 

It is important that small businesses conduct a risk exercise by identifying what risks they face and how to best reduce those risks to an acceptable level (attempt this at least once a year). For example, consider how you render your service or sell your product. Secondly, consider all the different alternative scenarios that could play out to disrupt that channel and then you can begin to explore ways to cover yourself. Cash is king. Working out how much you need to stay afloat is critical. Managing your reserve to ensure that you have sufficient cash flow to last ideally a minimum of three months should be what one works towards. Easier said than done, but rather be safe than sorry.

Take away points

– Always have safety cash

– There is merit in having a digital sales channel

Talk to your Insurer

Many insurance policies and endorsements cover losses due to business interruption. Sure, we can all agree that COVID-19 has seriously interrupted business in all economies. The real question is whether or not insurers consider the virus to be “physical damage.” In essence, it’s that delineation that triggers the business interruption clause in an insurance policy, which explains why this is such a hot topic right now in the insurance industry.

Also, don’t assume if you have an “All Risk” policy that you’re all set. Those types of policies sometimes exclude coverage for virus, contagious disease or bacteria. In that case, any COVID-19-related claims will likely be denied.

Take away points

– Request a complete copy of your insurance policy. 

– Once you’ve received the complete policy, look for this key phrase: “cause of loss to trigger coverage.” Those six little words will be your guide to determining your COVID-19-related claims.

– Check if you have the following coverage’s and for how long.

types of insurance
Types of insurance covers

We’re all in uncharted territory right now with COVID-19, and the insurance industry is doing the same.

What measures can small businesses put in place to ensure that they can remain operational

This will differ from business to business. One solution will not assist all. For businesses that cannot operate, although I would not necessarily recommend this under normal circumstances, can explore channels to diversify their service offering or product line. If diversifying isn’t an option, then the only thing businesses can do currently is ensure that they reduce their variable overhead costs.

small business analysis


Timothy Biyela – Accounting Professional

small businesses
small businesses
Entrepreneuse SA
small businesses
small businesses
Entrepreneuse SA


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