The COVID-19 pandemic is affecting businesses differently depending on a variety of factors including industry, location and mode of operation.
Regardless of your industry, the economic impacts are wide reaching in the economy so every business owner is encouraged to take the time to assess and plan. Use the current climate as an opportunity to establish a good foundation to help your business adapt and grow.
Ask yourself some hard questions such as "could I lose my client's over this?". If things continue the way they have, with the way that you're running your business right now, will you be able to continue serving your customers? Is your business being interrupted because you're being forced to close due to curfew or mandatory closures? Is your supply chain being disrupted?
Evaluate your risk, and then think about what you can do to minimize the impact.
Check your insurance coverage
See if you have business interruption coverage, and see what the coverage is. Not all policies will cover interruptions from this, but it's possible so you want to make sure that you understand what your options are.
Identify alternative sources of revenue
Start thinking of alternative things that you can tweak to help your business survive and to help keep money coming in. This may include providing digital or DIY versions of your services, running promotions on gift cards for clients to use once things go back to normal or adding an eCommerce component to your business.
Identify non-essential expenses
This is a time to run as lean as possible. You may have signed up for a program or subscription with good intentions of utilizing at some point in our business to run more efficiently. Or perhaps that subscription is for the benefit of physical customers that won’t be coming in for a while.
The fact is as business owners we get pulled in a million directions and unfortunately we end up paying for services that we aren't using. Now is a great time to look at services and subscriptions you're paying for that you are not using or temporarily pausing due to the COVID-19 crisis. Perhaps you have been paying advertising that hasn't been generating results. Look at your profit and loss statement and identify the must have expenses to properly operate your business and remain compliant. You want to be thinking both short term and long term.
Check your business’s financial health
Review with your accountant or bookkeeper your cash reserves, make sure that you're looking at all of your assets, look at their liquidity, how quickly can you convert them into cash if necessary? Also look at your cash flow, how has your money been flowing so far? Do some forecasting, creating some trend scenarios, how things could play out.
If all income stops suddenly, how long can you pay your bills for? This is a time to be very frank and think about the worst-case scenario, just so you can make informed decisions going forward. For you to be able to do this you will need to have a good set of books to properly evaluate your current expenditures and identify anything that isn't truly essential. If your books are not up to date or accurate, this is the time to address that.
Use credit wisely or don't use it at all
Using credit, either in the form of your existing credit cards, lines of credit or through economic disaster loans, is something you want to use credit as a last resort to keep you in business and after careful planning and consideration. Do not rely on credit to carry your full load overhead and administrative expenses if you normally wouldn’t be able to afford the payments when things are back to normal.
Tweak your marketing strategy
Identify what is working, what is not and needs to change. You may want to increase your use of social media and change your messaging to get in front of more customers as everyone is home on their computer or phone. If you find yourself with events being canceled, customers not coming in and prospects drying up, you will have time that you can use to work on your marketing strategy to make things better.
Keep communication lines open with your customers, If you have a mailing list or social media, you can send newsletters or do live videos to keep them engaged, nurture it, they'll remember that.
Use your time effectively
Create that content that has been on your to-do list for weeks or months, organize your admin files, review your calendar and make sure it is accurate, get your receipts and tax documents to your accountant, revamp your systems and workflows so you’ll be more efficient when things pick up again.
Don't waste this time feeling sorry for yourself because that is not going to be beneficial for your business. Learn, read, take courses, there may have been courses that you have purchased and then got too busy to finish. This is an opportunity for you to have a good foundation put into place to help your business thrive in the future.
Right now, it looks like the disruptions are only for a couple of weeks, but some sources indicate the effect will last months for some business and years for the economy as a whole. So be proactive and not reactive in your adaptability to change how you do business.