Coronavirus is taking an economic toll on all businesses, healthcare included, big and small, but smaller businesses are particularly affected by this pandemic. Even as they fight for their survival, micro and small companies are ill-equipped to deal with the economic fallout of COVID-19. The situation is evolving rapidly, and small business owners are unaware of the steps they can take to mitigate the risks involved.
It is safe to say that the world has not faced a crisis of this nature before; therefore, it is difficult to comprehend and predict the challenges that it will create for small and medium enterprises. For now, it seems that the future is bleak; as self-quarantine continues across the globe, small businesses face the brunt of it. Dwindling sales, decreased revenues, no incoming cash, and mounting bills predict that it’s highly unlikely for small companies to stay afloat.
Recent surveys suggest it would be difficult for small businesses to make it until June if the current circumstances continue for three more months. If the situation gets worse, small-businesses will face a fatal financial blow.
So far, many small businesses have been temporarily closed down because of self-imposed social distancing or government-mandated lockdown. If the circumstances prevail, they will be forced to shut down business indefinitely. What these businesses need right now is interest-free loans, and cash buffers that can help them pay their works, and keep their doors open.
The good news is that this pandemic cannot last forever, and things will surely turn around. In the meantime, here are a few points that might be able to help you survive and keep your doors open post-COVID-19.
Cut Expenses Immediately
To survive the pandemic, you need to utilize the cash in hand wisely. Therefore, the first step is to cut unnecessary expenses immediately. Experts are urging small businesses to perform a financial triage that includes strict budgeting, restricting spending, and considering lay-offs. Primarily, small businesses should cut any business function that is not vital; value-added or augmented features should go first. For instance, reduce travel spending, transportation costs, vacation or holiday budgets, etc. Moreover, make a list of all other expenses that your business can cut down and use that money to sustain your primary functions. Analyze all the unnecessary costs that aren’t earning you any revenue, and cut them down for now.
Policies are just as crucial for small businesses as large businesses. It’s critical to have strict policies regarding everything, and communicating them clearly to your employees. Follow the guidelines given by the relevant departments, and government, and cancel all large gatherings. If there are urgent meetings, use digital platforms and conference calls.
Remote Work & Flexible Timings
Small businesses that cannot continue working from a physical location can move their operations online. Technology has made it possible for employees to remain connected in a virtual workplace; from slack to Zoom, there are many tools available to facilitate meetings and remote work.
To make remote work possible and effective, small business owners must develop protocols of work and ensure accountability. Employees must be aware of the chain of command, their daily workday, and the tasks expected of them to make it work.
Relatedly, Businesses can offer flexible timings to their employees to facilitate them in this difficult time. Employees are also stressed about coronavirus, and as they are juggling multiple jobs while at home. Allowing flexible timings will not only increase productivity, but it will also keep your employees happy and loyal after the pandemic is over. It is essential to be empathetic in the crisis and try to be understanding if something comes up.
Many businesses are already offering remote work and flexible timings to their employees, for instance, a company in the UK that I know of, Carpet Cleaning Bromley, is assigning tasks to their staff remotely.
Apply for Small Business Loans
Different governments have announced relief packages for Small Medium Enterprises, check your eligibility for that assistance as well. These loans can help the business owners manage the disruption caused to their businesses.
Secure Access to Cash
Access to cash is one of the critical challenges of businesses in this pandemic. Small businesses are now more vulnerable than anyone else in terms of liquidity. Expenses like utilities, rents, and payrolls leave little cash to business owners. To cater to the challenge, small businesses need to advocate for immediate liquidity.
Service Improvement and R&D
The one silver lining is that businesses can take this time to regroup and come back with innovative ideas that will be more suited to the post-corona economy. Experts argue that companies that are prepared for the new world order are more likely to survive and succeed. This is the perfect opportunity for businesses to reflect on what they have done so far and tackle innovative ideas you have been putting off. Take the opportunity to do some research, and develop new strategies, plans, and improve your current operations, so once all of this is over, you come out with an improved service or product.
Make a Strategic Plan
It’s crucial to make decisions on your current financial standing, and it is not possible without a strategic plan. If you did not make a plan at the start of the year, this is the perfect time to do it. Start new projects that you have wanted to begin, but could not, and make modifications in what you are currently doing strategically. Seek advice from the policymakers, and the think tanks and make a plan to rise above the crisis.
Communicate Regularly With Your Stakeholders
What is happening to your business in the COVID-19 pandemic is not only important to you, but it is also vital to your stakeholders. So, communicate your situation, strategies, and challenges to them. Your staff needs to know your plans, and the likely impact the situation will have on their lives. Moreover, keep your customers updated as well, and communicate with them.
Indeed, these are very challenging times for small businesses globally. But whether the pandemic stays for three weeks or three months, small businesses need to adapt to the new realities now. Those who go beyond their capabilities in this tough time will not only survive but will also come out stronger for years to come.