As the COVID-19 pandemic has spread and caused periodic shutdowns across the globe, the requirement for having a strategy to preserve your small business or startup has never been more important.
To keep your company operating at its maximum during a pandemic and in a strong position for success once it subsides, consider these business planning tips.
1. As always your health and safety should be number one
If you’re a one person business or sole proprietor, your health needs to be first to earn income. Reduce your trips and increase communication and marketing from your home office and invest more time into business software.
If you have employees, keep them updated about any limits on travel and encourage them to work from home more. If your business is regarded as essential, take all steps you can to decrease the spread of the virus at your office or workplace. This consists of physical distancing, changing work schedules, and repeated sanitization.
2. Analyze the impact on how your business functions
How will this crisis change your business? The best remedy is to estimate real-world best-case and worst-case outcomes and establish contingency plans for both.
It’s important to note in your assessment how long the pandemic will impact your business. Will it be a problem for six-months, one-year, or much more?
If your suppliers or customers cannot make purchase for a few weeks or months, what effect will that have on your projected income and sales?
3. Prepare to respond to changes
We could never have pictured the changes in the way people live today due to the pandemic. The business plan you planned six months ago may not work well today. You need to modify your plan and set up your business for how this tragic event has evolved. If your issue is temporary for less than three months, then reducing your expenses on marketing, travel, and staff hours could help you get through a rough period.
If the pandemic and lockdowns persist for multiple moths or even a year, then you have to make an additional backup plan; one that addresses minimizing your fixed costs, cutting down benefits, and even having to let good workers go.
4. Evaluate your finances
The financial risk and impact needs to be carefully weighed with your back-up plan. Where possible seek out ways to decrease non-essential expenses and regularly monitor your profit projections. Also, don’t overlook your accounts receivable and determine customers who are high risk of late payment.
Many business owners have savings they can draw on or access to keep them afloat. The best option for this is to secure a business line of credit prior to the actual need, so you can access those funds while in a disaster or pandemic. Another option for business owners is a mortgage for self-employed people likely provided by a mortgage broker.
None of us are fully aware of what’s coming next or if we’ll have to deal with a pandemic similar to this again in our lifetimes. But it is advantageous and wise to have a plan for your business during emergencies such as COVID-19 and makes sure it’s in a healthy position for recovery once things move back normal.