The Covid-19 outbreak has greatly impacted global economy, especially small businesses that are struggling to sustain during the tough times. This pandemic teaches us the important of having a stable recovery plan once the economy begins to return to a state of normalcy. As business owners, having an exit strategy in place help you be prepared for any crisis and rebuild. Here’s 6 steps to consider in getting your business back on track after Covid-19.
1. Determine how big is the damage
The first step and the most important thing is by determining how deeply your small business has been affected. This involves different layers as in your company’s financial statements such as profit and loss or cash flow statements. It’s helpful to do that now as you can compare them to last year’s numbers to evaluate how much your business may be affected.
Other than sales, profits and cash flow, you need to consider what are other areas that your business has been affected. For instance, do you have to lay off some or all of your workers due to Covid-19? Have you cut your advertising and marketing budget down? Or have you lost some of your customers? Those are things you’ll need to put in your rebuilding plan to help you recover.
2. Reconstruct your business plan
Your business model may have worked perfectly fine before Covid-19 hit. But, it doesn’t mean you don’t need to do some fine-tuning. You may need to consider how your business can pivot to adjust to a new normal. If you previously relied on a physical store for sales, you may need to consider digital expansion to accommodate customers who are shopping from home.
To reconstruct your business plan, get clear on your business’s strengths and weaknesses. Next, you need to look at what was working before that may not working well now and see which area you can adjust or improve. Don’t forget to revisit your business goals to make sure they’re realistic and timeless.
3. Decide whether you need funding to jump-start your business
Undeniably, some small businesses may need some working capital to jump-start their business. Unless they had a large amount of cash on hand or cash reserve to sail during the pandemic. When it comes to financing your small business during a Covid-19 rebuilding period, there are several options to consider.
One of the options is special grant from the government specially for SMEs. It is designed to provide one-off funding to small businesses that are struggling to retain their employees during the global pandemic. There are a few banks that can help with short-term financing if you need money to restart your business operation.
4. Change your budget and eliminate monetary waste
Indeed, you may have to spend money before you can make money after the Covid-19 pandemic. For instance, you may need to spend money on hiring and training new employees or rehiring ones you had to lay off. To keep the business operation, you may need to purchase inventory and you might have to rev up your advertising budget again.
So, you should have a clear idea of what you need to be budgeting for and what you can minimise to make the most of the revenue. Eliminate the monetary waste and get your budget as lean as possible. One of the extreme steps you could take during this time as an employer is deferring paying yourself a salary or taking a pay cut. It is depends on how well you’re able to manage your personal financial obligations – depending on what you have in savings. However, skipping out on paychecks could help your business to get back on its feet faster.
5. Create a timeline for rebuilding and prioritise important actions first
Of course, there are several things you may need or want to do to recover your business after Covid-19. But, doing everything at once may be overwhelmed and not realistic. Create a time line to guard your on doing the most important actions first.
As a guideline, you may need to secure funding for your business first. Once you’ve done that, you can set a time line for rehiring employees, restocking inventory and lastly reopening your business.
6. Create an exit plan for the next crisis
Coronavirus pandemic is not the only crisis you may face in life. The reality is, there might be other crisis or emergency in the future to disrupt your small business at any time and it’s depend on you whether you are ready to face it or not. Utilise this valuable experience to prepare for the next crisis to help you insulate your business from future shocks.
It is important for you to build up liquid cash savings and focus on paying down your debt and trimming nonessential spending to keep your budget in check. You may need to find solutions to help your workers work more efficiently to cut operating costs.
Having a Plan B, Plan C, Plan D and so on can help improve your business’s odds of surviving and thriving again during tough times.
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