The coronavirus pandemic has led to a financial crisis around the globe, with many small business owners being some of the most hard-hit by the situat
The coronavirus pandemic has led to a financial crisis around the globe, with many small business owners being some of the most hard-hit by the situation. A very small percentage of business owners have experienced no effects at all as a result of the pandemic, and an even smaller percentage have done well in spite of it. Although the short-term outlook for small businesses varies a lot depending on the industry, it’s important to start considering what recovery is going to look like once the economy is able to return to a normal state – or at least establishes a new version of normal. Whatever kind of small business you run, preparing early to have an exit strategy in place for after the pandemic will make it easier for you to start rebuilding your company and hit the ground running. So, what should your recovery plan involve?
Determine the Financial Damage
The first step in developing a plan for rebuilding your business after COVID-19 is to honestly assess the damage. Figuring out just how much your small business has been affected by the crisis will make it easier for you to put plans in place to start repairing the damage. Upload your financial statements such as profit and loss or cash flow statements as early as possible so that you can compare them with last year’s numbers to see where the major differences lie. If there are significant differences and your business has taken a lot of financial damage, it might be worth considering working with chartered accountants & business advisors in London, Goodman Jones. Goodman Jones offer a range of services to help your business get back on track after the COVID-19 crisis and can help you navigate any tax relief that you may be eligible for to minimise some of the financial damage.
Consider Other Forms of Damage
Aside from the hard numbers of sales and profits, consider all the other ways in which your business might have been impacted by the pandemic. For example, you might have had to lay off some or all of your employees due to the COVID-19 crisis; this will need to be factored into your plan for rebuilding as you consider whether you are going to invite previous employees back or look to hire a new team.
Consider whether or not you have had to cut your marketing and advertising budget as a result of the pandemic and whether this has led to a loss of potential customers. You’ll also need to consider whether any of your customers have migrated towards competitors during the pandemic; figuring out why this has happened, for example, if your competitors are offering cheaper prices, customers may well decide to move in order to save money due to their own financial problems caused by COVID-19.
Get as much information as you can to account for everything as you identify how you are going to recover.
Consider Whether You Will Need Additional Funding
Unless you had a large number of cash reserves to help your business get through the pandemic, it’s very likely that you might need to prepare yourself to apply for a business loan or another type of business funding in order to get your business back off the ground again post-COVID-19. There are several options to consider when it comes to financing your small business’s COVID-19 recovery, including traditional bank loans, small business lenders, angel investors, disaster loans, crowdfunding and more. Since nobody knows when this pandemic is going to be over and when you can get started with your small business’s recovery plan, it’s best to start researching funding options as early as possible so that you can apply and get the funds that you need as soon as you need them.
Consider Pivoting in Another Direction
If you rely on your business to make an income and do not have the time or the finances to wait for the economy to return to normal before working on a recovery plan, there are many reasons to consider changing a few key things about your business as soon as possible in order to facilitate a faster bounce back. For example, if you run a brick and mortar store and have been affected by the lockdowns in the UK due to selling non-essential products or services, it may be worth considering if there is any way your business could move online or operate in a COVID-19 safe manner.
In areas that were in Tier 3, for example, businesses like gaming arcades ensured that they could remain open and make a profit by stopping public admissions and only taking private bookings of parties from the same household in order to ensure that they were compliant with the guidelines. Other business owners have put their original business idea on hold throughout the pandemic and moved into selling products and services that are in high demand right now, such as personal protective equipment.
Rethink Your Business Plan
Your original business plan might have worked well for your business up until this year, but it probably didn’t account for a worldwide pandemic. Even if your business model worked great pre-COVID, coming out of the crisis and thriving will probably mean that you have to make some changes. You will certainly need to go back over your business plan and put strategies in place for how your business is going to recover from this crisis and adjust to a new normal. Consider how your industry, in general, has been affected by the coronavirus and focus on finding new opportunities for your business within it. If you are able to find a need or a gap in the market that your business is able to pivot to fulfil, this could be essential to reclaiming and expanding your customer base in the future and being able to survive this crisis.
Assess Your Strengths, Weaknesses and Goals
You may have been very clear on your company’s strengths, weaknesses and goals pre-pandemic – but right now, all of that might have changed. The unprecedented changes brought about by the COVID-19 crisis have left many businesses realising that suddenly, their strengths have become weaknesses and their goals are no longer realistic. When going over your business plan and business model, it’s important to account for these changes and figure out what is no longer working for your company as a result of the pandemic. This gives you a clear opportunity to determine what can be improved on or adjusted in order to ensure that your business is able to remain competitive and survive the crisis. Go back over your business’s goals and change them where necessary to ensure that they are realistic, even in the current situation. For example, your target revenue goal for the year might have to be reduced to account for the reduction in sales.
While most of us hope that a crisis like this won’t happen again during our lifetimes, the reality is that an emergency can happen and cause disruption to your small business at any time. Put your experiences during the current pandemic to good use by learning from them and using them to make sure that your business is prepared for whatever hits it next.