Covid-19 pandemic has undoubtedly become an epic catastrophe for every business, not just the small; even large-scale businesses are profoundly affected by this unforeseen circumstance. However, large scale businesses do have some backup to lean on, but when it comes to small scale businesses, the reserve seems to be equal to null. This issue is because most small businesses depend on the format of investing more than half of their profits in up scaling the existing business. To be precise, at the end of the day business owner is left with 25% of his profit that gets used to purchase resources like employees, their salary, and paying the utility bills.
With the current scenario, this format has directly become the biggest enemy of the small businesses, thus, preventing them from taking any necessary steps. However, the startup entrepreneur should understand that the market will never stay afloat even when the COVID-19 pandemic is long gone; they will have to learn and adapt a new set of rules to remain constant.
Here in this blog post, we will discuss a few mindful aspects that will help the startup entrepreneurs in these testing times to alleviate the risks and survive the slowdown caused by COVID-19.
1. Track The Expenses Against The Revenue Status:
It would be best to have a clear picture of where your business stands during this uncertain situation. Make sure to conduct a proper assessment of your variable and fixed expenses and gain details on the actual revenues.
Once you acquire a proper understanding, you can then proceed to make the plan that will fit according to the current situation for your business.
2. Check The Feasibility Of Your Business Model:
The market has certainly changed a lot since it got affected by COVID-19. This means that your solid business model that did well in the previous situation may not necessarily stay afloat now tool.
You must reconsider your business model and reevaluate your business based on the assumptions you had in regards to revenue and cost. Consequently, track your current cash flow and financial metrics.
Stay mindful of your runway to estimate the impacts on your new sales, credit cycles, potential bad debts, and collections.
3. Plan Policies:
The current situation is highly unpredictable; one cannot expect how long the whole lockdown scene may last. That is why you must get prepared for a long time.
Plan policies for 3,6 or 9 months, if possible, cut back major expenses and scale up on marketing costs.
Renegotiate on fixed expenses like rent, salaries, payments, etc. Only focus on high costs that are necessary for survival.
You will have to strategize, communicate, and act with compassion with the new operating plan to acquire sales revenue goals.
4. Be Patient in Securing Investment:
Business needs capital to run, and during these slow times, many entrepreneurs are seeking opportunities to gain capital.
Be on the safer side and approach existing investors for additional funding. Since they already have invested in your venture, they have a good understanding of the concept and will be happy to help you again.
Situations like this may avert you from making the right choices, invest minuscule of your resources in finding the right small business coach, who can help you conclude better.
These were some aspects that will help you understand the gravity of your business’s current situation and assist you in turning it into a favorable position.
Here are a few tips to stay connected and thrive during this worldwide shutdown.
1. Communicate With Your Customers:
Not just you as a business is affected by the situation, everyone is, including your customers. The ideal way to keep your business going through is by staying transparent with your customers. This is because customers tend to empathize with the businesses that are facing a crisis. Also, by being transparent, you can understand their perception and offer a solution as they require.
2. Maintain Healthy Relationships With Your Vendors, Clients, Or Contracted Parties:
By now, everyone has understood that the current phase is very unpredictable in owning proper capital.
Also, it is understandable that it might be difficult for you to pay out on time to your vendors, clients, suppliers, landlords, etc. So, rather than ducking the situation, please provide them with a sufficient notice period about the delays. Trust us, people will understand, all you need to do is ask or say out loud.
3. Keep Your Team Engaged:
Many large companies consider layoffs when the economy goes against their profit margin. However, since you are trying to retain your staff in this period, you must keep them updated about every development.
It should be your first responsibility to keep your team members engaged; you can stay connected with them using different tools and resources like Zoom conferences and Google Hangout.
Maintain the high spirits among the team and understand their working habits within the workforce.
4. Communicate With Stakeholders:
Communication is key when it comes to running a business. Make sure to consult with your external experts and investors, accordingly, amplify the right form of communication to share and gain the thoughts on the current situation.
Be vocal on how the pandemic has affected your business and how you are finding ways to survive in the market.
Even if you have any negative message about your current scenario, make sure to keep it in front of your investor with the utmost empathy and transparent reasons.
So, as you read, our blog post mainly points at one major thing, that is, your involvement. As the owner of your startup, you have to take necessary actions to stand united with your customers, employees, vendors, etc. Understand that everyone is hit hard by the ongoing situation.
If possible, ensure to collaborate with the small business coach as they have a wise understanding of the market fluctuation and how to correctly build a business module that thrives even during harder times.