It won’t be business as usual for a long time. The effects of lockdown and the subsequent post-lockdown safety measures imposed on business are not yet fully understood. Small businesses are likely to be the hardest hit from the current COVID-19 pandemic. However, a volatile and uncertain economy can create just as many opportunities as it destroys.
Depending on the industry you’re in, some losses are unavoidable, but for many entrepreneurs, it’s about minimizing your losses and finding ways to capitalize on opportunities. One of the best qualities that will serve you now, more than ever, as an entrepreneur is adaptability. By adapting to the way things are currently, you’re more likely to survive, and there may be tremendous opportunities for business growth. Here are a few general points to consider.
1. Take care of yourself, and keep calm
Self-care can relieve stress, reduce burnout and promote positive energy. Establishing or sticking to a regular self-care routine is so important for our physical and mental wellbeing, especially during difficult times. Do it in a way that works for you. For instance, try to get connected, eat well and get some exercise.
It will also help you to keep calm, which in turn will also mean keeping your staff calm, and ultimately, this will increase your team’s productivity and innovation.
Things will get better, and you aren’t in this alone. Ask for emotional support where you can, and when you need it.
2. Check what help/supports are available to you
The UK Governments have put together loans, tax relief and cash grants to support small business owners, and this support will keep evolving. Keep up to date with how this help from governments can help cut costs. Additionally, there are support packages offered by other institutions, such as banks, which could be of assistance in this turbulent economic time.
3. Make a wise financial plan
Use this time to reflect on your business strategy and re-focus on the things you did not have time for previously. Gather, understand, and process as much data as you can to make strategic decisions for your business. Try to create a budget plan with the following information and review it on a monthly basis:
- Sales – If possible, break this down by product and is calculated as the number of sales multiplied by their average sale value
- Fixed costs – Take them from your recent financial statements and adjust them for expected increases
- Variable costs – Costs will vary with the number of sales and often decrease as sales numbers increase. However, that is not always the case and so these need to be calculated carefully.
Create a cash flow forecast to estimate your cash position in the future once you have completed your budget. You will be able to estimate your business cash inflows and outflows, and give yourself time to financially prepare your business.
4. Focus on the opportunities for revenue
Naturally, cutting costs is one of the first things on a business owner’s mind when in a difficult time. In an uncertain economy when every penny counts, even the smallest increase in revenue or reduction in expenses can have an impact on company profitability. But there is a limit to which expenses can be cut without hurting your competitiveness. Ultimately, expenses should be viewed as a resource for generating income. Not to be wasted but used productively to maximize revenue.
On the other hand, there is no limit on the opportunities for revenue you can explore. You should consider the driving forces of revenue, which in most businesses are:
- The number of customers
- The number of times those same customers bought from you
- The average sale you made each time a customer bought from you
Put strategies in place to increase each of those critical measures once you understand the driving forces of your revenue.
Strategies to drive revenue
Keep existing customers happy: Loyal customers give you more sales opportunities. Be sure to communicate business changes, including hours of operations, virtual offerings, and managerial decisions to keep customers in the loop during shifting times. Communicating is more important than ever right now.
Boost your customer base: Get creative and hustle. Leave no stone unturned in pulling customers from competitors. And don’t stop marketing. A lot of businesses will stop the cash flow of marketing funds first, which is a mistake. Chances are that competitors will pull back on ad and marketing spend. This can give you a chance to gain market share.
Invested in online: If online marketing works for your business, here are some important questions to ask when it comes to reaching your buyers online:
- Does your business have a reputable online presence and an intuitive and easy-to-use online interface?
- Have you implemented a Pay per Click (PPC) online advertising campaign to pull in buyers searching for your services?
- Do you have a social media campaign that engages with your potential customers?
- Is your website and content optimized for search engines when clients are browsing and researching online?
- Is your website delivering a superior user experience – making it easy to navigate, explaining your value proposition and how to buy your products and services?
If you have not invested in an omnichannel digital marketing strategy, with consistently aligned messaging and customer experiences across channels and platforms, it’s not too late to start. If you are already invested in an online strategy, consider devoting even more resources to this critically important area.
5. Upskill your staff
Wherever possible, try your best to keep your staff– they rely on you, and if you have managed a good team, they should be supporting you. You could train your existing staff on additional skills, which could make them more productive and efficient. There’s plenty of online courses that are very affordable, and these will allow them to focus on other areas of the business when their department is down- for instance, your sales team could perhaps also help out the marketing team. Look for courses and resources that most match your needs and also your budget during this time.