Sadly it looks as if coronavirus may bring tragedy to some UK families, but its financial impact could be very serious for many more, so what can you do to prepare your business for it?
Twenty-five years of consultancy experience has taught me that when extraordinary events occur it is the businesses that prepare most thoroughly that are least affected, so what has your business done so far to prepare for this very serious threat?
Well, here is what some of my most successful clients have been doing.
One client spent two whole days last week writing a detailed coronavirus strategy paper which he has circulated to all his staff. They now all know what their roles will be and how things will change.
Another has carried out a detailed audit of all his staff’s home IT facilities and has bought a laptop for everyone who does not have access to one. He has also made changes to his intranet and software system to facilitate home working. On Friday, half of the staff will work from home to test how well the new systems work.
Another large client has asked their HR department to prepare a detailed paper about temporary changes to sick pay rules and absence policy so that the staff do not have to worry that they will not be paid.
Several clients have prepared detailed cash flow forecasts that look at a range of different scenarios so that they can talk to their bank or their investors to ensure that they do not run out of working capital if there is a temporary slowdown in the housing market.
Another big area of concern for many of my clients is legal and compliance matters.
What will happen for example if all the gas safety inspectors get sick and gas safety certificates cannot be issued or renewed on time?
Should tenants be told that they cannot move into their new properties on the agreed date and will landlords be told that they cannot issue a Section 21 notice in the future because there was a period when the property did not have a gas safety certificate?
How about the new minimum energy efficiency standards that are due to come in for existing tenancies on April 1. Will landlords be given a period of grace because the energy assessor could not do the EPC due to sickness or will they be hit with a huge fine regardless?
On a more practical level, how will viewings be conducted when buyers, sellers and staff are all terrified of infecting each other, and what impact does health and safety at work legislation have on this? What precautions should be taken and what will you do if customers or staff fail to follow them?
I could write another 50 pages on this huge and complex subject but the purpose of this article is not to write your coronavirus policy for you. My objective is only to stress how vital it is that you sit down and write one today.
My most successful clients all planned for the impact of the tenant fees ban last year the moment it was announced and as a consequence they have not lost one penny of revenue.
Less successful agents did not think about this until June 1 and as a consequence they have lost up to 25% of their turnover. My most successful clients made a decent profit in 2009 because they sat down and planned how to cope with a downturn in the housing market the week after Northern Rock closed its doors.
Many estate agency businesses that failed to plan were forced to close their own doors during the following year.
It will be the same with coronavirus.
The impact that it will have on your business will be determined by the quality of the planning that you do now. I know that in a few months’ time I will be asked to sell estate agency and letting businesses that failed due to the impact of coronavirus, but there is absolutely no need for your business to be one of them provided that you work out your strategy today.
In the face of a threat of this magnitude, you do not have a moment to lose.
* Adam Walker is a consultant to the industry, and specialises in the buying and selling of businesses in the sector