It doesn’t matter if you’re a small or big business. The coronavirus pandemic is a threat to your operations. You’re looking at as much as 82% revenue decline, a business leader’s survey details. That’s if your enterprise is still breathing. By now, many are already folding for good.
The painful truth about business closures is not just about the business per se. When your operations call it quits and file Chapter 11 bankruptcy, you’re leaving behind a trail of misery for your people. Your workers will have to fend for themselves. As a CEO or owner, you can’t help but feel responsible.
Or while you’re still struggling and breathing, albeit heavily, you can make sure your business doesn’t go down. One way to not be financially paralyzed by COVID-19 is to minimize your losses. Acknowledge certain situations beyond your control, but there are others you can largely manage. No single method fits all, but here are three expert-recommended approaches to help you cut loss and survive the pandemic.
Forecast Cash Flow
When you have a longer view of your cash flow, this positively affects your liquidity. You can manage it better by boosting it in the process. In this sense, you need to do your due diligence. In short, do the math.
As simple as a long-term cash flow forecast is, many leaders still falter in managing it. Remember that cash flow is the lifeblood of your organization. Protect it by maximizing incoming cash flow and minimizing outgoing. To do that, map out how your money will flow in the next 90 days. Don’t leave any stone unturned. The more detailed you are, the better.
There are ways you can get a better deal. Stress-test your 3-month forecast. Find ways to maximize the incoming cash flow and minimizing the outgoing.
Scrutinize Financial Data
An excellent way to do that is to look into your customer base. Who are your cash-paying customers? Offer them discounts so they can acquire more. That puts added value on your cash flow.
Additionally, hang on to your cash as long as possible. For your suppliers, negotiate a better deal, so you get to pay later. Outstanding expenses that can wait must wait. Squeeze as much time as possible.
Check out where you can source added cash. Be on the lookout for loans and grants from the government. Additionally, grants from private institutions should be a timely help. Just go over the fine print, so you don’t put yourself in a compromised situation.
Then, know that wage subsidies can be a timely boost too. Check if you can have that kind of help for your government workers.
By the same token, small businesses have been thrown a lifeline by the government. Check out SBA low-interest loans here.
This is where proper record-keeping is spot on. It raises your chances of getting reimbursed on time for business insurance claims. Look into your accounting system. You may have to set up a different charge code.
Zero in on the “baseline” of your business. This way, you can compare your numbers before and during the pandemic. Moreover, this is where quality bookkeeping services are paramount. Having your numbers right is essential for you to get your direction straightened.
Determine the Right People Who Matter
It would help if you didn’t lose your focus. And that means knowing what’s keeping you afloat. With all the chaos setting in, you could freeze in fear and forget about the essentials.
This is where you should look into your business relationships. Think who is keeping you afloat? Have a team to look after your current clients. You should know who are the ones that have been with you for a long time. Ensure this clientele feels catered to and not left out during the pandemic. A letter of thank you or an act of reaching out should start the ball rolling. Or you can offer timely solutions to their pandemic needs.
Knowing that you’re there for them can go a long way in helping them out. Connect with them in these hard times. Make sure you make it personal so they know you’re really concerned about their welfare.
Don’t go into hard-sell tactics. The worse thing you can do now is to erode your brand. When your customers start to think you’re taking advantage of them in this crisis, you’re going to shoo away many potential customers.
Lastly, don’t be afraid to navigate new waters. Technology has offered tools that can help you connect with your client base, for instance. Zoom and Facebook messenger, and even traditional text can be a great marketing tool or a better way to foster your customer loyalty program.
It’s a lot of work. But when you do your due diligence, chances are you get to keep a business running. And expand from there.