The COVID-19 pandemic is the most significant disruption the business world faced since WWII. Back in January, China virtually shut down its economy in an attempt to control the spread of the virus in Wuhan and other areas of the country. Since then, we’ve seen rolling closures across the business world, slashing trillions of dollars in value from the global economy. Countries including Brazil, France, the US, and Australia have all felt the effects.
When the pandemic first struck, CFOs predicted that it would take small businesses at least six months to recover and get back online – even with massive stimulus packages from governments. The strict lockdown came to an end in many western countries in May, allowing firms in some sectors to open back up again and resume operations as usual. But even now that it is September, we’re still seeing companies struggling to reopen. It seems like the predictions were right. Shutting a business for months and then reopening it is a massive challenge – and ordeal for all concerns. Millions of furloughed workers have their fingers crossed, wondering whether they will ever be able to get back into the office.
Enterprises, however, must reopen. There’s no other option. The modern world depends on a thriving and vibrant private sector that can deliver value. Without it, we’re looking at a massive decline in quality of life across the board.
Do you run a small business? Are you looking to reopen soon? If so, take a look at some of these tips to get back up and running.
Take Stock Of The Financial Damage
At the start of 2020, practically no businesses were planning for the onset of COVID-19. Most people thought that this year would be pretty much the same as 2019 – except, of course, for the US election. But by March time, everyone knew that it wasn’t going to be business as usual. Governments worldwide imposed stringent lockdowns in the name of public health, shutting down the modern economy as we know it. Power plants remained active, but that was about it.
As a small business owner, therefore, you need to take stock of the financial damage. It might not be evident immediately how the pandemic affected your bottom line. Yes, you had fewer expenses, but you also had less revenue, leaving your overall position less clear.
Pay particular attention to your cash flow. You need enough cash in the bank now to allow your company to get back up and running once the economy returns to some semblance of normality. Check your financial resources. And don’t forget that your competitors are probably in the same boat, worrying about their financial futures too.
Rethink Your Business Plan
Your business plan is supposed to be a document that helps you maintain your discipline. It’s a template for how you spend your time during the day. You should have it at the back of your mind when making decisions.
COVID-19, however, is causing many entrepreneurs to rethink how they do business. So much changed that it seems silly to keep plans as they are. Things are now fundamentally different.
Take the notion that workers should travel into a central office daily, for example. In the past, companies would just rent out space to a landlord and provide facilities for workers. It was all perfectly normal. Now, though, with social distancing in place, things have changed.
Businesses still understand the value of offices for exchanging ideas, and they’re willing to use them flexibly. But they don’t want to go back to the old model of multi-year contracts and fixed rents. What they want is a serviced office in the CBD where everything is done for them. They just pay a fee and then get access to office facilities when they need them.
Companies are also looking at ways to make their services remote. Already, we see millions of people working from home on their laptops. But now there’s a drive to ensure that the same thing happens with its primary operations. Customers should be able to get products and services remotely. And the entire business should occupy the cloud, reducing risks.
There are a lot of perfectly viable businesses out there that aren’t going to make it because of the financial impact of COVID-19. Many profitable firms will go under, simply because they don’t have sufficient short-term funding.
As an entrepreneur, you may need to find funding to keep your operations afloat – at least for a couple of months. There are all sorts of credit sources you can use, including accounts receivable financing, business credit cards, vendor tradelines, and traditional loans.
Remember, each option has its pros and cons. None are perfect. With that said, having capital in the bank can help you ride through the roughest of storms and keep your business intact until conditions improve.
Speaking of which, the news is actually rather good. Many economists assumed that we would experience a long and protracted depression because of the coronavirus pandemic. But with each passing week, it looks more and more likely that the recovery will be V-shaped. We saw a sudden contraction in output, which will be followed by a rapid expansion. Overall, economic growth for the year might be neutral, which would be an incredible result.
Funding lets you rebuild for the upcoming economy. You can divert your resources into the most productive areas, and perhaps emerge victorious, even when your rivals don’t. Because this isn’t a financial crisis, demand should return relatively quickly, as it has done in the past.
Change Your Budget To Account For New Spending
Changing a business model is never cheap. Switching to new processes often involves incurring manifold costs, from training new staff to paying for experts to implement new systems.
For this reason, you’ll want to change your budget in significant ways. Think carefully about what you can cut that won’t affect your ability to generate revenue. And always earmark a portion of your finances to invest in growth opportunities as and when they arrive.