How equipment rental companies can recover from Coronavirus
01 May 2020
With the Coronavirus pandemic changing our businesses and lives so rapidly, Kevin Appleton offers helfpul insights on cashflow, recruitment and staff management to help construction industry businesses thrive.
When a global crisis like the current Coronavirus pandemic takes hold, everything seems to move so much faster. And so much slower.
Many of us are finding the frantic energy being poured into conference calls with lenders, suppliers and shareholders is in stark contrast with the periods in-between, in which life is reduced to walking pace and conducted largely within the confines of our own homes.
In truth, it will likely be pointless me offering any business advice on how to weather the storm. By the time you read this you will either be well on the way to doing it, or it will probably be too late.
As the job of journalism is to give opinion and insight, I have decided to offer you some reflections rather than advice, that should help stand you in good stead as we endure - and emerge from - the pandemic.
How much debt should a business carry?
The appetite for being highly leveraged as a business goes in and out of fashion, but this crisis shows us that being prudent about the debt carrying capacity of your business is not just about riding economic cycles.
Almost everyone, I suspect, figures they will see sufficient early warning signs of an economic crisis to manage their debt and cash position ahead of its impact.
Well not with coronavirus. We went from never having heard of it in November to most of Europe having rental demand levels some 50% lower in March and still falling.
The businesses in the best shape to weather this are the ones who applied the age-old wisdom of “all things in moderation”. A bit of debt to help grow, yes, but not five times, six times nor seven times “normal” cashflow.
Why treating employees with respect is fundamental
The people we tend to view as “numbers” are the very ones that count when society goes into shutdown. This period has required calm leadership from senior management teams within businesses.
Yet society has been kept functioning by cleaners, carers, drivers, nurses, retail workers and customer service staff remote working from their kitchen table, as well as the doctors and scientists. Many of the careers we are encouraged to aspire to seem suddenly pointless when society goes back to basic needs.
We should remember that when and if things get back to normal that we ensure to treat people in those roles with the respect they deserve.
Recruiting remote workers
The customer contact and administration element of business will never be quite the same again.
So many businesses have discovered that they can operate quite happily with half or more of their staff working from home, that the need to have offices and sites full of people in future will come under severe question.
I have already heard companies saying, “We used to have a real problem recruiting for X in this area, now we realise they do not even need to be in this area”.
How to support yourself and your team through Covid-19
We have once more come face-to-face with the truth that as individuals and as societies we are very fragile. I personally see this crisis as an incredibly helpful (if painful and tragic) reminder that we are not gods.
In truth there is nothing over which we have absolute control, and we delude ourselves massively if we believe it is otherwise.
I have had many conversations over these past couple of weeks that have been so much deeper than the standard, “Did you see the game at the weekend?” or “What do you think of the new Jaguar hybrid?”. We are human. We have deep emotional, psychological and spiritual complexity, and we manage these complexities better when we face into them.
Most of us spend our lives running from questions around our purpose and destiny, but now we find ourselves “trapped” at home then those questions start to reassert themselves. I would encourage you to face them as it might help you recognise your frailty and, paradoxically, feel stronger for doing so.
Effective team leadership requires reflection
At a personal level I hope and pray that you have been left untouched by tragedy through this time. I hope and pray also that we will not file our experiences of these weeks and months in the “forget” pile and dash back to banality.
Life, like leadership, benefits from deep thought and reflection… and this is our chance to do just that.
*This article was written in March 2020 and was published under the title ‘Life after Coronavirus’ in the April-May 2020 edition of IRN. Current and past issues of the magazine are available to download here.
About the author
He is a former CEO of Lavendon Group and a chairman and/or non-executive director of a number of companies in the rental and logistics sectors. To comment on these articles, e-mail: IRNfeedback@khl.com