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The COVID-19 pandemic affected all businesses, wreaking financial havoc worldwide. This left most small and large business owners counting losses due to diminished purchases and changing customer behavior. The NFIB (National Federation of Independent Business) estimates that 92% of small businesses suffered negative effects of the virus. Even though these effects vary by industry, it is important to establish recovery methods as infection rates reduce and businesses resume their normalcy. That said, below is a guide that businesses can use to recover from the virus.
Assess the Extent of Financial Damage
Assessing the extent of financial damage is the first step in building a recovery plan following the challenging period. While there are multiple layers involved depending on your industry, you should begin by updating your business’s financial statements. This includes cash flow, profits, and loss statements for the entire period.
Doing this is beneficial, as it enables businesses to compare the current figures with those of previous years to determine how the business was affected. Interestingly, while only 3% of small business owners claim to have made profits during the pandemic, the financial damage in your business may not be bad as you expect.
Apart from specific figures related to profits, sales, and cash flow, you should also consider other ways that your business was affected. For instance, if you laid off some employees during the epitome of the pandemic, consider this in your rebuilding plan. If you reduced your marketing budget or lost some customers to competitors, include these as you estimate the financial resources required to steer business recovery.
Re-Evaluate your Business Plan
Your business plan might have been effective before COVID hit. Therefore, some fine-tuning is necessary as you recover from the pandemic. Particularly, you should consider how you can pivot your business to adjust to the new normal. For instance, if you relied on foot traffic for sales in your brick-and-mortar location, you should consider digital avenues to accommodate those shopping from home.
You should also analyze how other businesses and the industry, in general, were affected by the virus. As you assess the industry and your competitors, pay close attention to key trends and focus on identifying available opportunities. Finding a gap that your business can fill is crucial to reclaiming your customer base.
Similarly, as you re-evaluate your business plan and model, you should also identify your strengths and weaknesses. Find what worked before and might not be beneficial currently and adjust accordingly. Lastly, remember to assess your goals to ensure that they are realistic, even in the current business environment. For instance, if you had set target revenue goals, you may consider scaling it down.
Determine if You Need Funding
Unless your business had made tremendous revenue before the pandemic, high chances are you will need some capital to bring back your business. Fortunately, there are several options for financing your business after the pandemic. For instance, the Paycheck Protection Program offers financial input to small businesses without sufficient capital to pay their employees during the pandemic.
The Economic Injury Disaster Loans can also help businesses with short-term financial needs for other business needs apart from employee retention. Unfortunately, these Federally-mandated financing options are limited. Therefore, available funds may be exhausted before your loan application is reviewed. If such is the case, consider the following options;
- Traditional Small Business Administration loans and microloans
- Business credit cards
- Small business loans from online lenders, banks, and credit unions
- Equipment financing
- Inventory financing options and many more
Note that these options have specific pros and cons. For instance, some may require only businesses with stellar credit, while others are short-term. Therefore, assess all available lenders keenly when choosing where to source for financial aid.
While this may seem obvious, communicating reopening is another important part of bringing back your customers after the pandemic. Once all your reopening plans are completed, communicate your reopening policies and operating time. You can communicate with your customers through email, social media, business websites, and other online platforms.
While communicating, ensure that you mention that your business adheres to reopening standards for businesses provided by various health authorities. Fortunately, most online platforms, such as Google and Yelp, have included COVID-specific features that help businesses communicate their reopening policies.
Additionally, you can take advantage of your first customers in marketing your brand. Ask them to leave reviews on your social media platforms and business directories about your business in general and specifically your strict adherence to COVID protocols.
The Bottom Line
Most business leaders face the tough challenge of bringing back their businesses after the pandemic. As businesses face the new norm, entrepreneurs should be ready to adjust their business goals, operation models and be flexible to adapt to the changing customer behavior.
Originally posted 2021-09-01 00:38:56. Republished by Blog Post Promoter