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How can businesses survive through Covid-19?

How can businesses survive through Covid-19?

Thursday 12, 03 2020
Business Continuity Plan (BCP) is a practice used by multinational companies around the world when facing crisis due to natural disasters, terrorism, etc. similar to Covid- 19.

Coronavirus has disturbed the global economy

Over the past month, hundreds of businesses have narrowed their production or suspended their business due to the Covid-19 epidemic. Along with that, out of over 5,000 cooperatives, 25 have suspended operations and 5 have narrowed their scale of business.

Since Tet, all production and business activities of Vietnamese as well as global enterprises have been seriously affected. The scope of the impact of the Covid-19 pandemic is broad, it is not limited to industry, field or countries. In 2003, when the SARS epidemic struck China, the global economy was still relatively normal.

But nearly two decades later, when the novel coronavirus also rages here, the world economy has been more disturbed due to China's booming development. The power of consumption and production of this country affects throughout Asia, as far as North America, Europe and beyond.

Manufacturers around the world are bound to China whose factories are responsible for supplying raw materials or finished products. This dependency is on the sharpest rise in Asia. According to the World Bank, in 2000, China accounted for only 1.2% of global trade.

By 2018, their market share is one third. In Asia, the market share increased from 16% to 41% during this period. The sectors seriously affected by the Covid-19 epidemic are tourism, real estate, construction, fast-moving consumer goods, aviation, agriculture, ancillary industries, etc. Vietnamese and global manufacturing enterprises are also heavily affected.

Sales of businesses in the directly affected industries plummeted, and some businesses even have their sales reduced to approximately zero. It can be said that coronavirus is a "fatal blow" to small and medium businesses around the world.

“Save yourself”

Businesses need to be proactive in overcoming difficulties, saving themselves first by actively seeking alternative markets, diversifying output markets as well as input sources, and reducing dependence on Chinese market, etc. In multinational companies, Business Continuity Plan (BCP) is one of the familiar practices, and whenever there are difficulties similar to the crisis caused by Covid-19, businesses will have a plan to respond immediately, minimizing the consequences and risks they may suffer. BCP is a practical backup plan developed and implemented to help businesses recover operations after a partial or total disruption after an unexpected disaster struck.

In today's business environment, businesses are constantly faced with a lot of changes and risks caused by natural disasters or humans, from power failures or minor machine failures to larger catastrophes such as protests, fires and disease outbreaks, earthquakes. All such events may lead businesses to suffer many economic losses as well as the risk of getting involved in legal litigation disputes, thereby affecting their survival. Society and economy are becoming more uncertain, ambiguous, and unpredictable.

How can businesses survive through Covid-19?

According to a study by Contingency Planning Research, when asked "How long will your company be in danger of collapse if you have to stop working?”, 70% of companies answered “in 72 hours” and 4% said their company would disappear if they were unable to resume operations within the first hour.

In the same survey, 15% of businesses said that with every hour of inactivity, they would lose about USD 50,000 - 100,000 and 4% said that this figure could be over USD 5 million. Through this Covid-19 pandemic, together with lessons from the September 11 terrorist attacks, for the disasters whose impact is extremely horrible while the probability of occurrence is extremely small, planning a backup plan is really helpful.

In fact, many businesses are still able to survive through disasters even though they are severely affected. For such reasons, building a BCP is a key need in the operations of businesses. If built effectively, this plan will help companies minimize the consequences of the disaster to them as well as their customers.

Planning a BCP

In developing a BCP, one of the most important steps is the "risk analysis and evaluation" phase. During this stage, by assessing and reviewing all the important assets and key processes of the enterprise, the manager must identify the risks and disasters that may occur to the business as well as the level of consequences that they bring.

They have to forecast a number of major disaster scenarios that will occur and plan a response. It should be noted that, when proposing such response measures, the cost of implementing must be taken into account so that the scale of the plan is suitable to the needs and resources of the company.

Once completed, the plan must be disseminated and propagated to all employees to raise awareness, and it is important to regularly perform maintenance, conduct rehearsal, and check the viability of those backup solutions.

Finally, periodic assessment and control to detect new risks to revise and update the BCP are also needed.

10 steps to build a BCP​​

How can businesses survive through Covid-19? 2

Step 1: Identify the purpose and scope of the BCP and those who implement it
Step 2: Identify priority activities and recovery time targets
Step 3: Identify what you need to recover key activities
Step 4: Assess risks - Capture the chain of catastrophic disasters
Step 5: Do not forget to limit damage before a disaster
Step 6: Emergency response to natural disasters
Step 7: Form business continuity (BC) strategies to recover operations soon
Step 8: Prepare financial resource
Step 9: Perform rehearsal to ensure proper implementation
Step 10: Evaluate results and improve the shortcomings

​Entrepreneurs need to have proper awareness and thinking about the need of building and maintaining a business continuity plan to help their businesses to best respond to change and mitigate any risks before any events that may strike at any time.

​>> Which businesses are eligible for an extended tax payment due to Covid-19?

Source: theleader

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Business

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