4 Financial Tips For Businesses During COVID-19
The coronavirus has radically altered every aspect of daily lives, and while these strange times are being experienced globally, one area in which they are being felt acutely is business. Employees are now working from home, storefronts are closed, supply chains disrupted, and there are real concerns over the unknown future.
Many business owners are having to manage not only their uncertain future but also a current lack of cash flow, alongside the impact already being felt by current employees.
Businesses, particularly small local businesses, play a vital role in the health of the nation’s economy.
As the Harvard Business Review describes, small businesses employ 58.9 million people, which is about 47.5% of the total number of workers within the private sector. The GDP of small businesses was $5.9 trillion in 2014 (the most up to date small business GDP data figures available).
While things might look rather bleak right now, there are practical things that can be done to help establish a bit more security in these uncertain days.
Do a Financial Assessment
The best place to start, when it comes to making an action plan, is to assess the state of your business’s finances.
Simply put, working out if there is enough money to meet the outgoings is essential.
During this assessment, it is good to keep a few things in mind.
- Firstly, create a cash flow budget to understand if you have enough money to meet your fixed costs.
- Next, it will be time to take a look at expenditure to consider if are any costs that do not directly increase revenue, which can be cut.
Consider Applying for Finance
Experts are predicting that the effects of coronavirus will be felt for many months, if not years.
This will mean many companies will have to apply for a business loan after they have performed a careful assessment of finances. This provision of immediate liquidity can help to keep a business solvent, making the prospect of recovery much more likely.
Keep Employees Working When Possible
Whenever possible, keeping staff on and working is always preferable, as it will help to maintain some form of cashflow. Using platforms such as Zoom, Skype, or GoTo meeting can help keep communication and productivity going.
You can make use of these communication tools, but make sure you supplement them by creating a clear policy regarding remote work. This should cover when employees are expected to be online and contactable and the specific tasks required by each individual.
However, it is worth remembering that with many children out of school, working hours might need to be a little more flexible. For those businesses who are really struggling to keep workers on, the government’s Small Business Retention Scheme might offer some help.
Delivery and New Forms of Sales
- If the business is selling a product, can it be sold online?
- If it is a service, is there an option for online classes or consultations?
Diversifying business methods is one of the bests ways of adapting to the new business climate.
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