As you know, the COVID-19 pandemic is not just a public health issue, it’s also caused chaos and financial uncertainty not only here in New Zealand, but also on a global scale.
Small businesses are no strangers to the impacts of the pandemic. Although the short-term outlook varies depending on what industry you are in, it is important for all business leaders to set up a strategy that will help them reset and to guide their way towards recovery. If you want some tips on how to hit the ground running after the crisis, this guide will outline the steps you can take to get your business back “Ontrack”.
Assess the Damage
Before taking any action, the first thing to do is to assess the financial impact the pandemic has had on your business. You can determine the impact by checking what your key numbers are telling you.
Take a look at your financial statements, especially the profit and loss or cashflow statements and compare the data to the previous year. If you have any questions about your numbers, reach out to us as we can assist you with this.
Aside from knowing and understanding your numbers, you also need to be mindful of any other ways that your business has been adversely affected. You have to account for factors such as the reduction in your workforce and customer churn when preparing a plan to rebuild.
Rethinking Your Business Plan
What may have worked for your business before COVID-19, may not deliver the same results in the current climate, or the post-pandemic world. Now is a good time to really fine tune your business model and think about how you can adjust and adapt.
For example, some people may still remain cautious about going to physical stores even if lockdowns are easing. That means you could consider strengthening your online presence and digital capabilities to accommodate customers who prefer online shopping.
As you rebuild your business, you do need to pay attention to trends in your industry and try to spot those untapped opportunities. Be aware of your business’ strong and weak points and adjust accordingly.
As the coronavirus has flipped the business world on its head, it might also be time for you to revisit the goals you’ve set to make sure that they are still feasible given the current market conditions. After setting realistic goals, you will then need to adjust your action plan to get towards those goals. Get in touch with us if you have any questions.
Additional Funding for Your Recovery
Unless you had a large amount of cash before the pandemic started, it is likely that you may need some additional financial support to adjust or jumpstart your business.
There are a lot of funding options for small businesses that you can consider including government-backed business loans, wage subsidies, grants, and other support schemes. You can find information around this on the government or IRD websites, or check out our newsletter with a round on these included. Do reach out to us and we can assist with finding the best options for you and your business.
Assess Your Budget
As we come out of the pandemic, expect that you will have to spend money before you can make money. For instance, if you had to lay off employees when the coronavirus hit, you may have to spend money on hiring and training new employees once you are on the revive and thrive pathway. You might also need to prepare for additional spending on cleaning, inventory and marketing post-pandemic.
Whatever your additional costs are, the key is to have a clear idea of the necessary spending that you need to budget for and which ones can be reduced or eliminated so you can make the most of the revenue that is coming in. As much as possible, keep your operating budget lean so you have the capacity to invest in future growth opportunities.
Develop a Timeline
As much as you want to get all business matters sorted out at once, this is far from realistic. Try to take stock of where everything is up to and decide what to prioritise. From there, create a timeline that you will follow to get your most important business activities done first.
While you accomplish the steps in your action plan, make sure that you’re tracking your progress. If possible, do a weekly check of what’s working and what’s not, and then make the necessary tweaks. Don’t waste time and resources on business activities that are not producing a solid return on investment. As your business starts to return to normal, you might transition to reviewing your financials on a monthly basis.
Prepare a Contingency Plan
The COVID-19 crisis is a wake-up call that shows us unexpected events such as this can disrupt your small business at any time. Learn from this experience and prepare a contingency plan that will cushion your business from possible future shocks.
Aside from thinking outside the box and having a Plan B (and even a Plan C, D, and E) that will help you prepare for the worst, improve your position in tough times by building up your cash reserves, paying down your debt, cutting down on non-essential spending, and increasing operational efficiency by streamlining processes and boosting your teams productivity.
Leading Your Business Towards Recovery
While COVID-19 has affected nearly every person and business in some way, you should take into your own hands the task of finding the light at the end of the tunnel. In order to cope with the changes and find your way to the so-called “New Business As Normal”, you must be agile enough to step up your game and confront the business challenges now and in the uncertain times ahead.
While you prepare to get your business back to full speed, it also helps to have a business expert to guide you in rethinking your business strategy and rebuilding your business into a more resilient one. If you need personalised advice about your specific situation, get in touch with us so we can work out a plan.