The relentless coronavirus has caused massive disruptions in the world of business. As many continue to grapple with an exponential reduction in customer demand, the future is uncertain.
If you are a small business owner, you are likely feeling the adverse effects of coronavirus. However, all hope is not lost. If you can find the will to take some necessary measures, you can wade through the storm.
Below are five crucial steps to keep your business running during these shaky times.
1. Limit expenses
Reduced demand means constrained cash flow. Therefore, the first step to ensuring the continuity of your business is to reevaluate your spending. That means cutting all non-essential operations.
If you have leased unused space or equipment, now is the time to suspend repayment or terminate the leases. Audit your software expenses to identify and close non-critical subscriptions. Limit travel to only the most critical functions. And, if you had a capital improvement project in your 2020 financial plan, delay or cancel it.
2. Engage your stakeholders
In times of crisis, keeping your friends close is essential. For small business owners, that means reaching out to partners and tabling your survival plan for discussion.
Inventory management is critical, so start by negotiating for reduced fees, better pricing and more favourable repayment plans from your suppliers. Also, follow up with debtors about overdue payments, and be open to negotiating based on what they can pay. If you have bank loans, contact them to discuss your options.
Customers are your most valued stakeholders. So, keep them updated about any changes in your business that could affect them, such as order delays and cancellations and new or suspended products and services.
3. Adapt by diversifying
If you are not getting returns from your current operation, think about diversifying or migrating into sectors that have demand. For example, if you have a handmade clothing business, you can use your sewing abilities to design handmade masks.
Likewise, if you have a hotel business, consider switching to delivery-only, rather than closing entirely. To keep yourself and your clients safe, insist on doorstep drop-offs and contactless payments. By partnering with a virtual payment service provider like Secure Trading, you can give your customers the option to pay conveniently and safely on your website or app.
4. Take advantage of government aid
For some entrepreneurs, options like limiting expenses, negotiating with stakeholders and diversifying are not enough to keep things going. Thankfully, the government is keen to ensure that small businesses survive this pandemic.
If you are thinking about suspending operations, you might be able to hold out for longer by applying for a 12-months interest-free loan from the Coronavirus Business Interruption Loan Scheme.
You can also take advantage of the Coronavirus Job Retention Scheme. With this program, the government will cover 80 per cent of the salaries of all employees whose employers want to retain but cannot afford to pay them.
Get your business to the other side
Although the vagaries of a global pandemic are challenging to navigate, you hold most of the cards that determine whether your business sinks or floats. By focusing on reducing costs, optimizing your workflows, and seeking help from the right places, you can keep your small business alive today and ready to thrive tomorrow.