The COVID19 pandemic has weakened the economy so much that many small businesses are facing an existential crisis with many more downing shutters. The financial havoc across the globe has left numerous small companies struggling. Until March 30, when the pandemic was just about to go berserk, 92% of small businesses had already suffered an adverse effect due to the pandemic, observes Bradley J Beman. Only a handful of business owners, about 5%, could escape the harsh effects of the pandemic, as they did not feel any effect at all.
The short-term outlook of small businesses depends mainly on the industry segment. It is important to envisage what the recovery mode will look like once the economy starts reviving to regain the state of normalcy or ushers to a new normal. To stay prepared for hitting the ground soon after the new normal sets in after the pandemic, you must have an exit strategy in place that helps start up the process of rebuilding without wasting any time, explains Brad Beman.
This article should help you formulate an exit strategy post COVID19 so that it is easy to get your business back on track.
Gauge the financial damage – advice from Bradley Beman
Knowing the impact of the damage of COVID19 on your business is the first step in developing a rebuilding plan. Keeping your financial results updated will also help, as well as taking a hard look at your numbers, Profit and Loss statements, and cash flow statements. Prepare your financial records with help from experts so its dependable on for making decisions. Compare the numbers with numbers from the previous year to understand exactly how much your business may be down. Although a minuscule percentage of small businesses say that it has been immune to the effects of the pandemic, it could be that the damage is not as deep as you might think.
Besides evaluating sales, observing cash flow and profits can help determine the effect of the pandemic on your business. For example, you can consider the number of employees that you laid off as part of your survival plan. However, you must also consider the customers who have left you as well as the reduction in the budget for advertisement and marketing.
Review your business plan
Your business plan might have worked well before the pandemic, but there would be some fine-tuning necessary as we come out of it. You must identify the way your business should adjust to the new normal. For example, if you are a brick and mortar store that thrives on foot traffic, these current times would necessitate a new focus of online and digital traffic to capture the same audience that now engages in online buying.
You should analyze the overall impact of COVID19 on the industry segment to which your business belongs. This will help to identify trends and can help you focus on new opportunities. Being able to find a need or gap that your business can fulfil could considerably assist in reclaiming and expanding your customer base. You can seek guidance in rebuilding your business from organizations like SCORE that helps connect you with mentors who can help you gain access to resources.
Consider the need for funding
Restarting your business after the pandemic would be similar to starting it all over again. You will surely need some funds to boost the working capital and jump-start your business. Among several options that you can consider, start by considering SBA (Small Business Administration) for a loan, as they have some programs specifically for helping small businesses. Small businesses that are struggling to retain their workforce during the coronavirus pandemic can benefit from the Paycheck Protection Program. If you need money for other requirements, the Economic Injury Disaster loans can also help.
Rework your budget
To pull your business out from the depths, you must first invest in money to then earn money. For example, to create the workforce that you once had before laying off or retrenching people due to the impact of the pandemic, you have to hire new people or re-engage those you had laid off. Building an inventory to start the operations would require money, just as it would for launching new advertising campaigns. You should list the additional money needed and incorporate it into the budget after recasting it.
Develop a rebuilding timeline
Recovery from COVID 19 will entail doing many, various things, but you should avoid trying to do everything all at the same time, as it is highly unrealistic. To help, you can create a timeline for multiple tasks and prioritize it by phasing out the tasks according to the timeline so that you accomplish the more important tasks first. Start with the immediate goals to set the ball rolling, then move towards the long-term goals. Having timelines for all of the tasks will help to maintain the pace of the rebuilding exercise.
Learning from the coronavirus pandemic, you can stay prepared for the next crisis by working out a contingency plan.
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