The impact of the coronavirus on the economy, businesses and individuals will be phenomenal.
Suddenly terms like ‘unforeseen circumstances’, ‘in case of an emergency’, ‘in the event that’, ‘potential risk’, ‘probability of an unforeseen event happening’, ‘what if’, ‘if it happens to you’, became a harsh reality and the real meaning of these terms became clear. Yes, ‘emergencies’ and ‘disasters’ can in fact happen. It can happen to all of us and it can happen at the blink of an eye.
What are the business and financial lessons the coronavirus situation taught us?
- The importance of having an emergency fund. In the event that you cannot work and earn an income or when businesses are taking serious strain, an emergency fund provides peace of mind as it can cover the expenses and carry you through the difficult period.
- Whether you are employed or self-employed, an income protection policy is crucial for times when you cannot work and earn an income. Take note of what your policy is covering, the terms and conditions as well as the exclusions.
- Business owners should have business insurance that will assist them during periods that the business cannot be operational and experience a loss of income. Take note of what your policy is covering, the terms and conditions as well as the exclusions.
- Despite how healthy you might be today, death often happens at an unexpected hour. Ensure that you have life cover and funeral cover to assist your loved ones should something happen to you.
- Ensure your will is signed and that both your will and life file are up-to-date. Read this blog article for the basic items your life file should contain.
- Travel plans are usually not made with the intent to cancel, but you can end up losing a lot of money when you have to cancel your travel plans. Rather pay a little bit extra and take out a proper travel insurance policy for trips of a higher value.
- The importance of having more than one income source is again emphasised. In the event that something happens and your main source of income falls away, additional sources of income can certainly help to diminish the pressure.
- The same principle applies to businesses. It is advisable to have various product / business lines. By diversifying your product / business lines, you reduce the risk of making serious financial losses when one product / business line is not producing.
- Business owners should have contingency plans. Do you have a plan in place for your business to remain operational should you not be able to work for a period?
- If your business is impacted in a negative way during this period, it is advisable to reflect on your business model. How can you tweak your business model to effectively deal with the current situation? What can you do differently going forward to be more prepared to face a situation like this in future?
- Tough times convey opportunities too. Some of the largest businesses in the world were initiated during tough times. While some people will lose a lot of money during demanding times, people who spot and grab the opportunities can make a lot of money. Think creatively, identify what do people need and how you can potentially fulfil those needs.
- Your circumstances in life or business can change rapidly. The more adaptable you are to change, the better you will function during times of uncertainty and change.
- The need to be able to use technology effectively is emphasised. Not everybody is a technology wizard, but the more technologically savvy you are, the easier it will be to find ways to still be effective and delivering during times like these.
- Many corporate companies are encouraging their employees to work from home to prevent the virus from spreading. This is a good test run to proof to employers that business can continue as usual when employees have the opportunity to work remotely and enjoy more flexible working hours. Remote working has the benefits of less office space required, less travelling expenses and employees don’t waste valuable time in traffic when they could have been productive at home.
- In times of uncertainty, the best investment advice is not to panic. The value of your investments will most likely drop, but don’t be tempted to sell / disinvest at the wrong time. The downwards cycle will realign over time. Many shares prices are showing a significant drop and it is usually a good time to invest when the markets are down.
- To sharpen up on personal hygiene and for everybody to be made more aware of personal hygiene is certainly a positive habit to be carried forward. Wash your hands!
- Sometimes you need to take a break from your busy schedule, sit back and reflect on your life and your career / business. Spend quality time with your loved ones. Tomorrow might be too late.
- Your health remains your most valuable asset. Take care of your health. Follow an exercise programme, eat a healthy balanced diet and boost your immune system.
- Live life to the fullest. Life is short and can change rapidly.
Learn from the bad experiences and put measures in place to prevent a similar impact on your business and financial position in future. Stay strong. It will pass too.
This article was first published on the roneljooste.com blog.