Guest post by Meredith Young.
The past several weeks have been anything but business as usual. COVID-19 has spread around the world and impacted every type of business. From resource allocations being shifted by manufacturers to products such as protective face masks, to a boom in telecommunications services and closing of non-essential businesses, plus everything in between.
This is a shift never seen before, and the implications for small businesses are staggering. Here are four key points every business owner should consider while weathering this COVID-19 storm and preparing to come out the other side stronger.
Be Financially Savvy
According to Fundera, one of the biggest concerns small business owners have is economic uncertainty as it pertains to the balance sheets of the business and changing consumer trends. The decline in customer spending with so many businesses closed makes it imperative for owners to secure their financial stability.
A digital banking platform that easily organizes expenses, invoicing and budgets, and is accessible 24/7, is a great first step to help owners get control of their finances. Taking extra time during COVID-19 to understand the financial side of your business will help you make more informed decisions and better budget your business going forward.
Adjust Your Budget
With a better understanding of the business’ financials, budgeting for this time now takes priority. Coupling healthy business finances, organizing smart budgets, and allocating spending wisely over the course of the year can be not merely the difference between a profit or loss, but a matter of survival.
While some expenses in your budget may be fixed, such as rent, others that are determined by the owners’ discretion or business’ needs can fluctuate greatly. One of the first areas affected by budget cuts tends to be marketing and advertising.
However, those who continue spending during downturns historically fare better. Chief Innovation Officer of Kantar, Rosie Hawkins, believes cutting budgets in marketing can have negative impacts on businesses during COVID-19 in the short and long term.
With only a few exceptions in segments like healthcare, tech, and distribution, the vast majority of businesses will experience a hit in sales during COVID-19. While the balance sheet matters at the end of your business’ financial year, it is bound to look different than in years past. If your business has stakeholders or investors, consider issuing a professional statement on the state of the company.
Crunching the numbers behind the scenes and finding the correct way to communicate with people close to the company will not only help you be transparent, but also build trust that the business is dealing with the reality of the circumstances head-on.
To go one step further, businesses should constantly be communicating with followers on social media with regular updates, changes, and precautions the business is taking during these times.
Finally, do what your business does best. The “good” news, such as it is, is everyone is in the same boat and must innovate in order to survive. Lean into your business’ strengths and triple down to deliver the best customer experience / product possible.
This is not a time to go to the drawing board and reinvent yourself completely and work on your weaknesses. Rather, do what makes you stand apart best. Focus on the positive, keep your head down, and work hard.
Meredith Young is a finance blogger who spends her days writing for small business and startup focused sites. She is enthusiastic about offering readers valued content that’s not only insightful but also relevant to the current climate of the industry and world.