As you know, the COVID-19 pandemic is not just a public health issue, it’s also caused lockdowns and financial worries on a global scale.
Small businesses are not strangers to the impacts of the pandemic. In a survey by the International Trade Centre (ITC) among 1,200 businesses in 109 countries between 20 April and 4 May, the pandemic has strongly affected 60% of the businesses. The results of the survey also show that two-thirds of small businesses are severely hit, with a high risk of permanently shutting down within a matter of months. Almost all business sectors have been experiencing declining profits, liquidity that is drying out, and even bankruptcy.
Although the short-term outlook varies depending on your industry sector, it is important for all business leaders to set up a strategy that will guide their way towards recovery. If you want some tips on how to hit the ground running after the crisis, this guide will outline the steps to get your business back on track.
Assess the Damage
Before taking any action, the first thing you need to do is to assess the financial impacts the pandemic has had on your business. You can determine the impact by checking your key numbers.
Take a look at your financial statements, especially the profit and loss or cashflow statements and compare the data to the previous year. If you have any questions about the financial side, please feel free to ask us. Aside from knowing and understanding your numbers, you also need to be mindful of any other ways that your business has been adversely affected. You have to account for factors such as the reduction in your workforce and customer churn when preparing a plan to rebuild.
Rethinking Your Business Plan
What may have worked for your business before COVID-19, may not deliver the same results in the current climate, or the post-pandemic world. Now is a good time to fine tune your business model and think about how you can pivot and adapt.
For example, some people may still remain cautious about going to physical stores even if lockdowns are easing. That means you could consider strengthening your online presence and digital capabilities to accommodate customers who prefer online shopping.
You’ll also find a bunch of useful resources online including free webinars and other tools you can use to address coronavirus-specific challenges. We’d also suggest you chat to your trusted business advisor for more focused and personalised guidance.
As you rebuild your business, you need to pay attention to trends in your industry as a whole and try to spot untapped opportunities. Be aware of your business’ strong and weak points and adjust accordingly.
As the coronavirus seems to have flipped the business world on its head, it might also be time for you to revisit the goals you’ve set to make sure that they are still feasible given the current market conditions. After setting realistic goals, you will then need to adjust your action plan to get towards those goals. Get in touch with us if you have any questions.
Additional Funding for Your Recovery
Unless you had a large amount of cash before the pandemic started, it is likely that you may need some additional financial support to jumpstart your business.
There are a lot of funding options for small businesses that you can consider including government-backed business loans, wage subsidies, grants, and other support schemes. Chat to us to find out what’s best for you.
Assess Your Budget
As we come out of the pandemic, expect that you will have to spend money before you can make money. For instance, if you had to lay off employees when the coronavirus hit, you may have to spend money on hiring and training new employees if you can’t rehire the people that you had to let go. You might also need to prepare for additional spending on cleaning, inventory and marketing post-pandemic.
Whatever your additional costs are, the key is to have a clear idea of the necessary spending that you need to budget for and which ones can be reduced or eliminated so you can make the most of the revenue that is coming in. As much as possible, keep your operating budget lean so you have the capacity to invest in future growth opportunities.
Develop a Timeline
As much as you want to get all business matters sorted out at once, this is far from realistic. Try to take stock of where everything is up to and decide what to prioritise. From there, create a timeline that you will follow to get your most important business activities done first.
While you accomplish the steps in your action plan, make sure that you’re tracking your progress. If possible, do a weekly check of what’s working and what’s not, and then make the necessary tweaks. Don’t waste time and resources on business activities that are not producing a solid return on investment. As your business starts to return to normal, you might transition to reviewing your financials on a monthly basis.
Prepare a Contingency Plan
The COVID-19 crisis is a wake-up call that shows us unexpected events such as this can disrupt your small business at any time. Learn from this experience and prepare a contingency plan that will cushion your business from possible future shocks.
Aside from thinking outside the box and having a Plan B (and even a Plan C, D, and E) that will help you prepare for the worst, improve your position in tough times by building up your cash reserves, paying down your debt, cutting down on non-essential spending, and increasing operational efficiency by streamlining processes and boosting your employees’ productivity.
Leading Your Business Towards Recovery
While COVID-19 has affected nearly every person and business in some way, you should take into your own hands the task of finding the light at the end of the tunnel. In order to cope with the changes and find your way to the so-called “New Normal”, you must be agile enough to step up your game and confront the business challenges now and in the uncertain times ahead.
While you prepare to get your business back to full speed, it also helps to have a business expert to guide you in rethinking your business strategy and rebuilding your business into a more resilient one. If you need personalised advice about your specific situation, get in touch with us so we can work out a plan.