Sustaining your business during a pandemic
Tips on Managing Your Business Through the COVID-19 pandemic
We know that with the COVID-19 closures, operating your business is becoming increasingly challenging. We have provided some tips below to help you manage your businesses.
Monitor Your Cash Flow
Managing your cash flow is absolutely imperative during times of closure. If your business is completely unable to operate due to closures, consider applying for one of the government or private sector programs available, including those outlined on our COVID-10 Resources page. If you can operate, but at a reduced capacity, you should be focused on reducing unnecessary expenses to boost your cash flow as much as possible, as well as exploring these support programs.
Examples of expenses to reevaluate might include marketing activations, business travel, unnecessary product packaging or third-party subscription services.
Remember when you completed a cash flow statement during your ACCESS Small Business Loan application process? Consider updating it to reflect your actual cash flows. Mapping out your historical sales, expenses and resulting cash flow changes will help you calculate how much cash you spend to run your business on a regular basis. Looking at this rate and how much cash you have on hand will determine how long your business can continue to operate if it faces a temporary shutdown.
Connect with your Business Coach to get more information on how to monitor your cash flows, identify expenses that can be reduced and sustain your operations as long as possible. As a reminder, contact us if you’d like to be paired with one.
Remember that even when the lockdown period ends, a prolonged recession (a reduction in overall economic activity, and as a result, spending by your customers) may also impact your business.
Consider Online Selling
If your business cannot operate as usual, for example retail or catering catering services, consider moving your distribution online or identify new ways to serve your customers. If you already have an online sales channel, consider shifting your marketing efforts to support this channel. Be aware that due to COVID-19 disruptions, there may be issues in shipping product. Taking pre-orders on sales and committing to sending these products out later may be one solution to help manage your sales during this time. Offering gift cards could be another solution to continue generating cash inflows in the meantime.
Some industries (e.g. food), have dedicated services to help distribute their products. In addition, some businesses may have the option to sell through third-party ordering and delivery services. Be aware that many of these services charge commissions and fees for usage.
Do not assume your product margins will stay the same if you explore these options. This is also a great opportunity for you to consider increasing your online presence and leveraging the current environment as an opportunity to market your business differently.
Consider leveraging social media as a resource for maintaining and increasing your brand’s awareness. Furthermore, consider if there is an opportunity for you to leverage technology to continue operating as normal. Businesses that innovate and adapt to change quickly to turn a threat into an opportunity will often experience unprecedented growth. Is there an opportunity for you to turn this threat into an opportunity?
Schedule a phone call with your coach
The above questions are the types of discussions you could have with an ACCESS coach. In addition, if there are areas of training that would help you as you pivot your business in response to COVID-19, please let us know.
We have dedicated team of business volunteers who can work with the ACCESS staff to arrange webinars in specific areas of business practice (e.g. digital marketing) if there is an interest from ACCESS clients. We can also keep you posted on training being offered from our community partners.
Manage Your Debt
Many of the support programs available for COVID-19 involve taking on debt obligations.
Debt is not always a bad thing for businesses – it can help sustain your operations while the impacts of COVID-19 are most severe and help manage your business during a lockdown.
However, business owners should be careful that they fully understand the total monthly cash outflow required to pay back the debt. If there is a preferable interest rate offered for a short period of time on the loan (for example, no or low interest during the first few months), you should fully understand if those rates will change in the future and how that will impact your repayments.
If you believe that paying back these loans will create challenges after your sales begin to return to normal, you should think twice about taking on more debt.
Keep in mind that the impacts of COVID-19 might last longer than the initial pandemic. Even as businesses re-open, consumers may choose to spend less money as they are concerned about their finances. This might have a longer-term impact on your business, so be cautious before taking on any additional debt knowing that your sales activity may be impacted beyond the next couple of months. Thinking about this impact is something your Business Coach will be able to help with.
ACCESS is here to help
Contact us if you need any help or support. If you believe your repayment of an ACCESS loan is at risk, reach out to us immediately so we can work with you to ease your burden during this time.