A crisis, such as the COVID-19 pandemic, can impact the way we all live and work. Small and medium-sized businesses are often among the hardest hit.
So, how should you lead your business through such turbulent times? While there are no easy solutions, here are some tips on managing your finances, your people and your future prospects.
If you don’t have a financial plan, make one
Like a lot of other small-to-medium businesses, you may rely on cash flow that lasts only a couple of months at most. So it’s important to have a clear view of your future expenses. Make a list of important items you’ll need to pay and when they’re due, such as:
- employee salaries
- office rent
- utility bills
- tax obligations
- supplier payments
This will give you a better understanding of your financial position, and may help you make quick, informed decisions when challenges arise.
When forecasting earnings and expenses, err on the side of caution. It’s safer to assume the road to recovery will take twice as long as predicted.
If necessary, consider where to reduce costs. For example, if you have an office, you could look to downsize, or use a co-working space, which may allow more affordable and flexible payment terms.
Consider additional funding, if necessary
You can explore different funding options after assessing what is suitable for your business. You can talk to your bank about additional funding, or consider using your own funds to sustain business in the short term. Also, you could look to find external investors who can inject funds into your business.
It’s impossible to know how long a crisis will last and what the road to recovery will look like. But proactively protecting your finances, gives you a chance of emerging from it in a stronger position – opening up future opportunities for growth.
Explore new opportunities
You may feel as though you’re in survival mode while a crisis is unfolding, but try to find time to reflect on your business model. Think about not just how you’ll get through this period, but also how you can adjust to thrive in the future. Here are some questions to ask yourself:
- How will your customers behave after the crisis?
- What will and won’t matter to them?
- How will you attract and cater for new customers?
- Could you offer more digital services?
- How might you use technology to create new revenue streams and new ways to connect with your customers?
Study your competition
Not all businesses will have the same experience of a crisis. Some will cope with changing circumstances better than others.
Find those that seem to cope well and learn what they do differently. Look at both your direct and indirect competitors to get a better understanding of what strategies seem to work.
Not every strategy will apply to your business, of course – but look for aspects you could tailor to suit your needs. There may be opportunities to adjust your broader business strategy and position yourself to be more competitive.
Take care of yourself and your staff
It can be hard to keep your spirits up during tough times. But it’s vital to take care of yourself physically and mentally. This may help you remain calm and maintain a positive mindset, and help your staff do the same.
If you feel like you need a hand, you can get in touch with us. Speak to us about how we can help.
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