COVID-19 is among us and may remain with us for a very long time. Even if a vaccine is ready by the end of 2020, it may take several years before the largest part of the world population has been innoculated. And even then, things may not return to the way they used to be. We do not know the future. So what can you do to prepare your business to survive?
1. Reduce costs as much as possible
Do you have a complete overview of your expenses? Do you know how much money is coming in and how much is going out on a weekly or monthly basis?
Do your cash flow estimate for the next 6 months. Then go over your expenses and do not hesitate to reduce. Design a cost reduction strategy by looking carefully at each expense and finding 3 ways to reduce or eliminate that expense.
Do you need to reduce employee working hours or lay off staff? Can you stagger working hours so that you need to use less office space (and reduce electricity costs)? Can you negotiate with the building owner to extend rent payment? Can you do the same with the bank about a loan? Can you return some of the inventory that you have not yet paid for? Can you use your inventory to get a cash flow loan to cover the next few months until you are able to sell the products? Can you negotiate with suppliers to let you pay for products in installments?
Do not hold back. Where it is possible to cut costs, do so as soon as possible.
2. Look for ways to increase your income despite COVID-19
Can you find ways to attract customers that normally would not come to you? Do you need to start doing more promotion to tell people about your products and services? Are there services you can add on to products to create a new source of income?
For example: suppose you are a hotel. If people are working from home, can you start offering them opportunities to use the rooms as work from home day-office? Can a large space be used as a meeting room where physical distancing is possible? Can you offer parking space at a daily, weekly or monthly charge? Can you offer food and drinks to go? Can you offer smaller portions of food or drinks to still get some income?
If your country is mandating quarantine after arrival, can you serve as a quarantine center for people who have travelled to the country? Can you start renting rooms to people to live on a 2-weekly or monthly basis? Can you start offering access to internet on an hourly basis? If you can maintain high hygiene and disinfecting capabilities, can you offer laundry or food delivery services?
But whatever you do, make sure to pay strict attention to government health regulations.
3. Look for ways to diversify your income
Look for and launch new ventures that will serve to bring in some additional cash to help you get through the current situation. Can you organise a drive-in cinema in the church parking area?
If the number of COVID-19 cases is still increasing, find out if you can work with NGOs to turn your school or church into a hospital to serve non-critical cases. Can you start producing soap or disinfecting hand gel to sell?
If launching a new venture is a challenge due to lack of funds, this list of 31 best businesses to start with little money may give you some ideas.
4. Keep in touch with your customers
A business needs customers to survive. Try to keep in touch with your customers. If you live in the same area, maybe you can stop by their home once in a while. If you are mainly in contact with them through email, now may be a good time to start sending a monthly newsletter to update them about developments.
You can also maintain contact with your customers through social media, using your personal page or through a business page. This is an easy way to share updates about your business.
Finally, you can use this time to try to attract new customers. Even if you are not able to go out, social media can help to promote your business and keep you in your customers’ minds.
5. Optimise your business operations
This is also a good time to prepare yourself and your business for what comes next. Can you improve your bookkeeping skills? Maybe customer retention is an area that needs improvement.
Perhaps your business only has limited financial forecasting skills or your sales strategy needs to be upgraded. You can also look at your business systems and processes; are there ways to upgrade them at low cost?
Using this time to improve your business management skills will help you run a more successful business after the COVID-19 crisis is over. It will also help you take your business to the next level at a faster rate.
6. Save as much cash as possible
In developed countries, people are advised to have at least 6 months of living expenses saved in a bank account. In case of an emergency or unforeseen situation, this will give them chance to deal with the situation while still having some income.
Your business should follow a similar strategy. After reducing your costs and increasing your income, try to save as much as possible. More savings will be able to carry your farther during the crisis and help your business to survive.
If all goes better than expected and you do not need to use the money during the crisis, the savings will be a financial reserve for your business. When the economic situation starts to improve, you can use these savings to take advantage of any new opportunities on the market. You can also use these savings to grow your business instead of looking for funding elsewhere.
If you are one of the lucky people…
The COVID-19 crisis was unexpected and is hitting all countries and businesses. However, some businesses are doing very well. For example businesses that are in the healthcare sector, businesses facilitating working from home, and businesses like supermarkets and food delivery services. If you are one of the lucky ones, you can use this time to speed up investments, carry out maintenance etc and prepare yourself for bigger things.