Small businesses are more vulnerable than big corporations in times of economic downturn, since they usually only have cash reserves for several months at most. And if resources are mishandled and wrong decisions are made, the COVID-19 pandemic could be disastrous for them and their employees.
While there’s not one foolproof way for small and mid-size enterprises (SMEs) to survive the business effects of COVID-19, the following practices can help yours stay afloat.
Tap into financial aids offered by banks and the government
This may be a rough patch, but you don’t have to go through it alone. The UK government is doing its part in helping small businesses recover from the losses: according to its official website, support will be available to businesses in the form of loans, tax relief, and cash grants. Employers can also apply for grants that provide staff up to 80% pay in case they can’t work.
What’s more, banks and other financial institutions are offering assistance to SMEs that are losing revenue. The Coronavirus Business Interruption Loan Scheme (CBILS), for instance, is a financial assistance program specifically enacted to help small businesses across the country during this difficult time. And more recently, the government has offered to back up 100% of high-street bank-issued rescue loans to SMEs, meaning the government will pay off the entire loan if the borrower is unable to do so.
Make a financial plan for the next quarter
Being able to cut down on expenditures could be easier for SMEs than for big businesses, since the former have fixed expenses and fewer risks. Sit down and plan for the next three months, with the goal of making finances last longer.
To minimise operating costs, consider downsizing your office and adopting remote working arrangements, if you haven’t already. To save on staffing costs, temporarily put a freeze on hiring full-time employees and outsource projects instead. If your in-house staff can take on new projects themselves so you don’t need to hire freelancers, even better.
You have to be smart about where to allocate your limited budget. Ask, ‘Which vendors and suppliers need to be paid during this time, and can the payment terms be more lenient?’ For example, is it possible to pay in installments as a guarantee that a vendor will get to keep you as a client? However, when working with other small businesses, keep in mind that while it’s important to look for ways to make payment terms bearable for you, other SMEs also need to pull through.
Look for opportunities
The world is changing, and customers’ habits are changing alongside it. If your SME could adapt to those behavioural changes, your business can survive. For instance, since this pandemic has seen an increase in the time people spend online, you can take this opportunity to strengthen your digital marketing and reach a wider audience.
You can also take this time to improve customer service. Going the extra mile by giving discounts or offering free delivery demonstrates that you have your clients’ back and that you care about them.
Lastly, this can be a chance to upskill your workforce. Take advantage of free online learning courses, and choose ones that can help solve business-related concerns. For example, a digital marketing course can equip your sales team with better strategies on how to sell your products and services. Ensuring your employees are constantly growing career-wise even during a pandemic not only empowers them but also boosts their morale and makes them feel more productive and useful.
Running an SME isn’t easy to begin with, and the COVID-19 situation might have made it a bit more difficult. We understand that this is a time when you need everything to work perfectly. Our IT experts at Office Tek can take care of your technology, so you don’t run into IT problems that can cause bottlenecks and downtime. We guarantee 24/7 monitoring to minimise risks, maintain productivity, and protect your bottom line. Request your FREE security assessment today.
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