The COVID-19 outbreak has wreaked financial havoc across the world, leaving many small business owners suffering in its wake. According to the National Federation of Independent Business (NFIB), as of March 30—still early in the crisis—92% of businesses said that they had suffered unintended effects because of the pandemic.
While the temporary outlook for companies varies a great deal by way of industry, it’s vital to focus on your own business rejuvenation plan and what it will look like once the economic system begins to return to our whatever shape the “new normal” may look like.
Get a strategy in place for after COVID-19, be prepared to hit the ground running and rebuild and come out stronger. If you’re not sure what your post coronavirus plan should include, this information can help you get your business back on track.
#1 Weigh up the Financial Damage
The first step in developing a rebuilding plan for after COVID-19 is determining just how badly your business has been affected. Now is the time to be honest – don’t kid yourself you’ll only end up doing more harm than good.
There are different levels involved, starting with the hard numbers. If you haven’t updated your financial statements such as profit and loss or cash flow statements recently, it’s helpful to do that now. You can then compare them to last year’s numbers to see how much your business may be down. And while only a small percentage of business owners say they’ve benefited from the pandemic, 3% according to the NFIB, it’s possible that the damage might not be as bad as you think.
Beside the hard numbers relating to sales, profits and cash flow look at other ways in which your business has been affected. For example, if you’ve had to get rid of some or all of your employees, you’ll need to factor that into your financial plan. If you’ve reduced your advertising and marketing spend, or some of your customers have migrated toward competitors, then those are things you’ll need to account.
#2 Take a Fresh Look at Your Business Plan
Your business model may have worked brilliantly pre-COVID-19, but coming out of it may mean you have to do some things a little differently.
You may need to consider how your business can adjust to any new circumstances. For example, if you previously relied on foot fall to a brick-and-mortar location for sales, you may need to look at a digital expansion to accommodate the higher numbers of people who are now shopping online.
Evaluating how your overall industry has been affected by the coronavirus pandemic is also helpful. When looking at your competitors and the industry as a whole, pay attention to the trends and focus on finding new opportunities.
Being able to find a gap or niche that your business can meet, that’s been ignored up until now, could be vital to reclaiming and expanding your customer base going forward.
When going over your business plan and business model, understand your business’s strengths and weaknesses. Then, look at what was working before that may not work as well now and see where you can adjust or improve to remain competitive.
Finally, don’t forget to revisit your business goals to make sure they’re realistic, given the current circumstances. For example, you may have set a target revenue goal for the year that will need to be scaled back now to account for the negative impact COVID-19 may have put on your Q2 sales.
#3 Consider Whether You’ll Need Funding to Recover
Unless you had a large amount of cash on hand going into the pandemic, it’s likely that you may need some financial support to jump-start your business coming out of it.
There are, at the time of writing, a number of schemes being provided for a variety of circumstances by UK Government:
Coronavirus Job Retention Scheme
Check if you can claim a grant through the Self-Employment Income Support Scheme
Apply for the Coronavirus Business Interruption Loan Scheme
Apply for a coronavirus Bounce Back Loan
Apply for the Coronavirus Large Business Interruption Loan Scheme
Apply for the COVID-19 Corporate Financing Facility
For more general information visit: https://www.gov.uk/coronavirus/business-support
#4 Adjust Your Budget to Account for New Spending
Coming out of the pandemic, you may have to spend money to make money. For example, you may need to spend money on hiring and training new employees or rehiring ones you had to lay off. Inventory may need to be purchased, and you might have to increase your advertising budget again to start building fresh buzz.
As part of your recovery, you should have a clear idea of what you need to be budgeting for and what you can cut to make the most of the revenue you do have coming in. The goal is to eliminate the waste and get your operating budget as lean as possible so that when the chance to invest in growth comes up, you’re able to
take advantage of it.
An extreme step you could take during this time is deferring paying yourself a salary or taking a pay cut. Whether this makes sense depends on how well you’re able to manage your personal finances, what you have in savings or other household income. Skipping out on paying yourself in the short term could help your business to get back on its feet faster.
#5 Develop a RoadMap for Rebuilding
You may have many things you need or want to do to recover following COVID-19, but doing everything at once just may not be realistic. What can help is having a time line to follow, a plan that prioritizes your most important actions first.
As an example, your immediate goal may be securing funding for your business. Once you’ve done that, you can set a time line for rehiring employees, then restocking inventory and, finally, reopening your doors if your small business closed as a result of the pandemic.
As you take baby steps toward recovery, remember to track your progress. This is particularly important if you’ve secured funding for your business, because you don’t want to waste time on activities that aren’t delivering a solid return on your investment. In the initial stages of COVID-19 recovery, you may want to check in weekly to see what’s working and what’s not. Later, you can shift to reviewing your business financials monthly as things begin to stabilize.
#6 Create a Storm-proof Plan for Your Business
While the coronavirus pandemic may seem like a once-in-a-lifetime event, the reality is that an emergency can come along to disrupt your business at any time. Using what you’ve learned during these times can help you to storm proof your business for the future.
For instance, building up cash savings may be a priority for your business if you had little or nothing set aside before the COVID-19 outbreak began. You may choose to focus on reducing your debt and trimming non-essential spending to keep your budget in check. Or you may need to find ways to help your staff work more efficiently to cut operating costs.
The pandemic also may have taught you a thing or two about how important it is to be able to adapt and keep your business fluid so you can reasonably weather storms. For example, if your employees didn’t have the option to work remotely before, that’s something you may want to incorporate in your business model going forward.
With more creative thinking you can prepare for a worst-case scenario. Having a Plan B can help improve your business’s odds of surviving and eventually thriving again during tough financial times.