If you’re the owner of a small business or start-up, chances are you’re facing losses. The world is going through a major crisis ever since COVID-19 changed our lives forever. People are losing their loved ones, economies are being pushed into recession, employees suffer from pay cuts, and daily wagers fight for survival. Amidst all this, we’re sure that knowing there’s still hope will bring some light to your life.
It is important to know what strategies will best suit small businesses once economics moves towards a new normal. Once you have a detailed strategy planned out, it will be easier for you to be up and running when the time comes. Here are six ways you can re-build your small business after COVID-19.
Re-evaluate Your Business Model
For starters, your business plan may have been working out perfectly before the Pandemic. However, in the present circumstances, the functioning of industries has changed drastically. While strategies vary between industries, it is a fact that people are looking for products and services that are accessible online, i.e., digitally.
It is safe to say that the E-commerce industry has blown up ever since the pandemic hit, with online shopping and services being the customer’s first choice. Keeping this in mind, it will be very helpful to focus on your company’s online presence. Increasing website traffic, looking for investors to sponsor your content, and making the website as easy to use and understand as possible are some areas to focus on.
Calculate the Extent of Loss
A crucial step is to analyze exactly how much damage your business has endured. Take a look at your financial statements (profit/loss/cash flow statements); compare these to the previous year’s numbers and calculate losses. It is also possible that the damage isn’t as serious as you had expected.
In addition to calculating losses, you’ll have to look at other aspects of your budget. For example, did you let go of some of your employees due to profit cuts? Did you cut down on your advertising and marketing budget? You’ll have to keep these factors in mind when you’re re-allocating and re-building.
External Funding Options
Considering the possibility of acquiring funds to go further will be helpful. There are many mediums through which small businesses can secure funding. Government schemes, bank loans, capital financing, and merchant cash advances (MCA) are some options. Before you decide to go for one of these options, it is important to weigh the pros and cons.
Look at the long-term benefits instead of those in the short-term because short-term benefits can turn into losses in the long term. For example, a merchant cash advance advantage is that merchant cash advances don’t require a high credit score, unlike loans. However, a major con is that while merchant cash advantage is a good short-term solution, someone constantly taking away a share of your profits can become a problem after some time.
Prioritize Your Options
There may be a list of factors you need to keep in mind when re-building your business; thinking about all of them at once will not help you but confuse you further. There are always some aspects that are more important than others. For example, it is important to re-allocate the budget first and then come to new marketing strategies later.
In such circumstances, it will help you a great deal if you make a timeline and work accordingly. Prioritize and allocate aspects that need immediate attention at the top of the list. Gradually move further and take things step by step. During this process, make sure to monitor your progress, continue with strategies that help your business, and discontinue the ones that aren’t working.
Enable Open Communication
While you’re going through extreme stress because of your business’s losses, it is important to remember how hard-hitting the Pandemic has been for employees. Keep in mind that your employees are also dealing with major changes; it will help them if you allow an atmosphere of empathy. You’ll have to organize training sessions again to explain your new business practices while dealing with COVID-19, and during this phase, keep communication as open as possible between employees and employers.
Have an Emergency Plan
While it seems like the pandemic is a one-time thing that won’t happen again for centuries to come, the truth is that your business can be hit with an emergency at any point in time. It will be helpful to work out a contingency plan to deal with these circumstances in the future. This may include increasing your savings, increasing efficiency to reduce costs, and working to pay off any debt you may be under.
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