The COVID-19 pandemic and the recession that ensued have brought many businesses to their knees. From larger corporations to small and mid-sized businesses, not many were immune to the effects of the global lockdowns and stay-at-home orders. Small businesses are particularly vulnerable since they don’t have the same resources and privileges that larger corporations enjoy, and they also have greater credit constraints compared to their big business counterparts.
Here are some financial solutions and tactics that business owners can look into if they want their companies to survive these dire economic times.
Simplifying and streamlining
It may be tempting to go on the offense and burn out using all of your personal and financial resources trying to mitigate your future losses. But now more than ever, business owners need to use this opportunity to spring-clean outdated processes, streamline solutions, and simplify internal bureaucracy. Some examples include:
- Reducing paper usage
- Automating repetitive tasks
- Developing a long-term technology plan
- Promoting action-oriented people
In dire financial times, you must take a good look at your liquidity. Now more than ever, you need access to capital, as well as a revolving line of credit to provide you with emergency cash when desperate times come. If you don’t have an emergency fund to fall back on, you should prioritize the tightening of your outgoings by cutting non-essential costs. Since we’re currently in a pandemic, travel budgets are already immediately cut. Consider freezing pipeline investments for now, and hiring talent that is only necessary for business growth in the long-term.
One of the very few upsides of the is that it has brought many in the world a feeling of solidarity. We feel closer to others than ever before since we are all going through similar trauma. Business owners who were former skeptical about remote work were left with no choice but to adjust to the current climate, and are now finding out for themselves the multiple benefits of teleworking. Business owners need to take advantage of these tools to maintain communication and transparency with the company’s employees and stakeholders.
Aside from internal communications, businesses’ first line of defense must be constant communication with their audiences. There are an estimated 1.8 billion online shoppers in the world, and since most consumers would rather shop online now due to the virus, business owners need to prioritize digital marketing and other means of communication with their audiences and target demographic.
Digital and technological solutions
Don’t forget to constantly update your technological and digital processes, like your order and delivery systems. Nothing turns consumers off more like a bad experience with transactions. Stay on top of customer feedback regarding these processes so you and your team can improve them. Constantly remind your audience about your business’s digital alternatives and how it can make their transactions much more convenient while keeping them safe.
Since the pandemic was announced, there has been a slew of government assistance programs like the CARES (Coronavirus Aid, Relief, and Economic Security) Act and the SBA’s (U.S. Small Business Administration) grants for small businesses.
Stay informed of government-assisted programs and resources. Stay updated on the deadlines for applications and make sure you don’t miss them. Don’t say no to financial help for your business, no matter where it comes from and as long as it’s above board. And if you don’t know where else to look, don’t hesitate to reach out to those that do. You can network with peers and colleagues in similar situations through free webinars, or even through dialoguing with them on platforms like LinkedIn.
Mergers and acquisitions
Recently, ride-sharing service Uber purchased food delivery service Postmates for $2.65 billion. Postmates is significantly less popular, and Uber Eats can now offer them more technology and tools for more restaurants and consumers, who will ultimately benefit from a more expanded list of options and a wider range of merchants and restaurants.
Combining two companies into one may help the leaders and owners gain the means and resources to run the businesses more efficiently. It may be a way out of financial and leadership stress for some. But of course, mergers bring about their own set of challenges, even outside of a pandemic. So businesses would be wise to outsource this process to post-merger integration consulting agencies who can help them navigate the changes and adjustments that will have to take place.
A study done by the YPO (Young Presidents’ Organization) found that 60% of global CEOs believe that the recession recovery will be U-shaped and that things might get worse before they get better. So keep abreast of global economic trends, and don’t be afraid to make tough decisions for your employees and stakeholders.