Coronavirus Impacts on Coworking Spaces
What is the risk of Coronavirus to our Coworking Businesses?
In this post, I want to help you get your business better prepared for unexpected stress such as the Coronavirus.
We will cover:
What is happening in markets with higher numbers of cases?
What are the risks and what can we do to mitigate these risks?
What can we do to keep our members safe?
What can we do to mitigate the economic impact? You may still be in the camp of shrugging off the Coronavirus and having a laugh at people fighting in the aisles of Costco for hand sanitizer.
If you aren’t feeling the impact of the virus, you are likely in a geographic area that has not had many cases of the virus yet.
I live just south of San Francisco and have a coworking space in Palo Alto. As of today, we have 190 cases and 4 confirmed deaths in California, most of them in the Bay Area.
Shit is getting real here.
Catholic schools have closed, the community college closed. Almost all major employers in the area have mandated a work-from-home policy. Traffic is a fraction of what it usually is, as is attendance of members at my coworking space.
Why is the Coronavirus such a big deal?
CNBC reported on March 11th that “Dr. Brian Monahan, the attending physician of Congress and the U.S. Supreme Court, said he expects 70 million to 150 million people in the United States will become infected with COVID-19.”
“U.S. health officials saying the mortality rate is likely somewhere around 1%, making it at least 10 times as lethal as the flu.”
The Coronovirus spreads easily and quickly. “Research is still in its early stages, but some estimates suggest that each person with coronavirus could infect between two and four people without effective containment measures.”
Because the COVID-19 virus is so contagious and has a higher mortality rate than the flu, the rate at which it is spreading could overwhelm local healthcare systems, preventing them from managing the mortality rate and handling other illnesses and emergencies.
See this #flattenthecurve description for an explanation on why the virus must be contained and why unusual measures are being taken to do so.
The director of the World Health Organization declared the Coronavirus a pandemic yesterday. He asked the following of us:
“First, prepare and be ready.
Second, detect, protect and treat.
Third, reduce transmission.
Fourth, innovate and learn.”
How do we “prepare and be ready?”
Do not wait until the issue becomes local.
Assume that virus cases will appear in your community and that you will need a plan. “Hope is Not a Strategy” is one of my favorite quotes. And I often like to say, it’s not a problem until it’s a problem…. And then it’s usually a big problem.
Create a business contingency plan.
Mike Morita shared this document that he used for his contingency planning. Use it as a checklist and work through it with your team or a business mentor.
Here are some questions I would ask that are specific to a coworking space:
How do I create a safe environment for my members and my employees?
How do I communicate policies and actions that help to create a safe environment?
How can I provide my employees with the flexibility to stay home when they have cold or flu symptoms without disrupting my service levels?
What are the protocols for asking members with symptoms to work at home? How can I train my employees on the protocols and help them feel comfortable following them?
What will trigger a significant business interruption?
What might trigger members to give notice? What can I do to mitigate member losses? Can I create a membership hold policy so that I keep credit cards on file and create a re-engagement campaign when it’s safe for members to return to the coworking space?
What government-mandated situations might require me to close? According to the NY Times on March 11, 2020, “Prime Minister Giuseppe Conte of Italy on Wednesday ordered almost all businesses nationwide to close as infections and deaths from the new coronavirus continued to soar, two days after he announced stringent travel restrictions.”
If you face a significant business interruption - either your business is required to close, travel is restricted and your members put in cancellation notices, or simply you have no funnel of potential new members during this time of uncertainty, what does that mean for your business?
Will you make payroll?
Will you make rent?
For how long?
If the answer to either of the first two questions above is “no,” what steps can you take?
Can you reduce staff hours?
Can you manage cash flow more effectively?
Can you get short-term financing from a bank or from investors or friends or family?
Do you need to sit down with your landlord and discuss a delayed rent arrangement?
Will there be government support for struggling or failing small businesses?
How do we “Detect, Protect and Treat?”
As you work on your contingency plan, there are immediate steps that you should consider for your coworking space.
Send frequent updates to your membership. They should understand that you have the authority to implement unusual but necessary measures in times like these.
Post signage reminding members how to thoroughly wash their hands, how to manage coughs to mitigate germ spread, etc.
Communicate sick policies; i.e. when employees and members should stay home. Clearly and repeatedly communicate that members will be asked to return home if they exhibit cold or flu symptoms.
Ask your members to take responsibility for cleaning their own work stations but know that many will not. Ask your team to take on the burden of extra cleaning - wiping countertops, door handles, work surfaces, kitchen and bathroom surfaces repeatedly throughout the day.
Provide disinfectant wipes and sanitizer if you can get access to them in your area.
How do we Reduce Transmission?
Follow the procedures outlined in the previous section.
Send employees and members home that have cold or flu symptoms and ask them not to return until the symptoms are cleared.
Be prepared to close your business on short notice if mandated by the local government.
See the end of the blog post for a Q&A from Fisher Phillips that addresses many employee/member questions related to the virus.
Here are some examples of what other coworking space operators are doing:
Posting signage
Doubling sick time for employees
Reducing staff from 2 to 1 where possible
Closing the space to new member tours
Taking meeting rooms offline
Putting together a procedure for how they will disinfect the entire space if a case is reported among their staff or membership
Asking members that want to cancel to take vouchers/credits to be used later in the year to mitigate cash flow issues in April/May
How do we Innovate and Learn?
If this pandemic doesn’t impact your business, please consider filing this situation as a warning that unexpected challenges can come your way at any moment. Spend time preparing your business to withstand stress.
Get a financial plan in place to bank 1-2 months of expenses.
Research your insurance options.
Identify options for access to short-term financing.
Identify revenue options that are not dependent on your physical space, i.e., virtual mail memberships, virtual community memberships, etc.
Q&A from Fisher Phillips (pulled directly from their website)
WORKPLACE SAFETY ISSUES
What if an employee appears sick?
If any employee presents themselves at work with a fever or difficulty in breathing, this indicates that they should seek medical evaluation. While these symptoms are not always associated with influenza and the likelihood of an employee having coronavirus is extremely low, it pays to err on the side of caution.
Retrain your supervisors on the importance of not overreacting to situations in the workplace potentially related to COVID-19 in order to prevent panic among the workforce.
UPDATED QUESTION & ANSWER (March 6, 2020)
An employee of ours has tested positive for COVID-19. What should we do?
You should send home all employees who worked closely with that employee for a 14-day period of time to ensure the infection does not spread. Before the employee departs, ask them to identify all individuals who worked in close proximity (three to six feet) with them in the previous 14 days to ensure you have a full list of those who should be sent home. When sending the employees home, do not identify by name the infected employee or you could risk a violation of confidentiality laws. You may also want to consider asking a cleaning company to undertake a deep cleaning of your affected workspaces. If you work in a shared office building or area, you should inform building management so they can take whatever precautions they deem necessary.
UPDATED QUESTION & ANSWER (March 5, 2020)
One of our employees has a suspected but unconfirmed case of COVID-19. What should we do?
Take the same precautions as noted above. Treat the situation as if the suspected case is a confirmed case for purposes of sending home potentially infected employees. Communicate with your affected workers to let them know that the employee has not tested positive for the virus but has been exhibiting symptoms that lead you to believe a positive diagnosis is possible.
UPDATED QUESTION & ANSWER (March 6, 2020)
One of our employees has been exposed to the virus but only found out after they had interacted with clients and customers. What should we do?
Take the same precautions as noted above with respect to coworkers, treating the situation as if the exposed employee has a confirmed case of COVID-19 and sending home potentially infected employees that he came into contact with. As for third parties, you should communicate with customers and vendors that came into close contact with the employee to let them know about the potential of a suspected case.