The Covid-19 pandemic has hit small businesses hard. What’s worse is that no one knows how long the pandemic will last.
Winston Churchill said “Don’t waste a good crisis”, now is the time to reassess our business strategy so that we not just survive, but strive.
Some ideas to help you look critically at your business:
1. Get control
Verify that every payment is going to a legitimate creditor and that your inventory is going to paying customers and not home with your employees. According to PWC’s Global economic crime and fraud survey 2020, 60% of South African organisations have been victims of economic crime and fraud.
Not taking the necessary precautions to prevent fraud is throwing money away. Often small businesses rely on their sense of family to prevent fraud, but as Ronald Reagan said, “Trust, but verify”.
2. Tightening your budget
Look at where your business is currently spending money, and consider which expenses are avoidable. Don’t slash and burn, making cuts that will cripple your business in the long term but look at the superfluous expenses. (This could include items like software that rarely get used, subscriptions, excess marketing producing minimal returns and rent.)
Do a thorough review of your staff to make sure the right people are on-board and doing their jobs effectively. Consider how technology and outsourcing can save you money.
Selling excess inventory, even at fire-sale prices will generate cash.
Many businesses run with lots of excesses, and this is the perfect opportunity to ensure you are running more efficiently. The key is to run as lean as possible without sacrificing quality.
3. Rethink your business opportunities in current times
Times have changed for all of us and to survive, we have to adapt our businesses accordingly. If you quickly spend the time to understand the current landscape of your market and the world, you can reoptimize your business’s positioning. Look at your competition to see what systems they have put in place, this can potentially ignite ideas and creative ways in which you can adapt.
- Maybe your business can provide its product or services more remotely than you thought.
- Maybe you have a unique in-house service you can offer on a consulting basis direct to other businesses.
- Maybe you can repurpose current processes to develop a new product that is needed during this time.
- Maybe you can work with a competitor offering complimentary services.
While the short-term will continue to be dominated by the pandemic, it is important to look at the “big picture” to make a positive and lasting change.
4. Ask for concessions
Don’t be ashamed of asking for help, you’ll probably be surprised how willing people are to assist you in this time of need. Don’t hide from creditors, they will often be willing to work with you if you communicate with them.
Consider the following:
- Determine whether your business is eligible for a government COVID-19 grant or subsidy.
- Explore options to defer or renegotiate financial payments eg. smaller instalments, payments discounts, and lengthened payment terms.
- Explore debt restructuring plans.
- Negotiate a concession on leases.
5. Keep an open mind and stay positive
In these times, small business owners must be adaptable and think outside the box. Perseverance, tenacity, creativity, determination, and passion are traits synonymous with entrepreneurs. Now is the time to call on all of them , and always be ready to seize the opportunity when it presents itself.
We do not need to completely change what we do but find new ways to deliver our product, dust off old ideas, experiment with existing strengths, search for new customers, and change our story.
Eventually, things will get better. We’ve got this!Contact us to find out how we can help you manage these difficult times.