A Business in Crisis – Develop your Long-term Business Survival Plan
Operating a small or medium sized business is tough in the best of circumstances and in these unprecedented times, a decline in transactions has severely impacted most businesses.
We all share the same concerns about the well-being of our families, employees, friends, co-workers and community and wonder if there is an end in sight. And now you are worried about the demise of your business which is your livelihood. Blood, sweat and tears have been poured into it so there is justified anxiety surrounding these unprecedented times. Some industries have been decimated such as restaurants, tourism, entertainment, and aviation. Others struggle to keep their heads above water and establish additional measures to be able to operate, (which in most cases are extremely time consuming and do not result in sales that come close to pre-pandemic sales figures).
While each business is unique, it is important to spend some time thinking about your current business model and how you have brought your products or services to the marketplace. Many companies are already set for alternate ways of selling and simply switched their models of operation over to these. For example, many restaurants utilized take-out and delivery for their food. When the epidemic started to get serious, they shut their dine-in service and ramped up delivery and take-out while enhancing cleaning procedures, wearing personal protective equipment and implementing safe distancing. Others are still unsure what to do and are waiting to see how things progress and some are considering various options to assist them in continuing to do business. No matter which stage you are at right now, it is important to protect your long term business continuity. If you have not yet thought about a survival plan for your business, it should be conceived now. Even after the first phase of this pandemic passes and businesses start to reopen, it will not be a case of hitting a re-set button and automatically things will revert to the way they were before. Looking to history as guidance it is not unusual that outbreaks can occur in waves, resulting in hot spot areas and threats of large spreading again. Businesses need to prepare for this marathon.
Initial Steps to Consider
The first thing, if you have not yet done so, is to contact your financial institution and inquire about all the ways they are able to help you with your loans, mortgages, and credit for yourself and your business. The sooner you can establish financial stability in this uncertain time the better, and every penny you can save now can help you through this tough time. Even if you think you are going to be okay, consider all the information you have acquired to potentially give yourself some financial flexibility, just in case. Decisions need to be made now, before you start missing payments.
Secondly, consider all of the programs in the Federal Government’s rescue package, which is great news for many local businesses. With emergency wage subsidies, emergency loans and benefits and deferral assistance, they can help you free up critical cash to keep your business afloat, keep the economy going and keep some, if not all, of your workers employed. For all the latest updates look at: https://chamberstoneycreek.com/government-of-canada-updates-april/
Next, consider your outgoing business expenditures for everything, including rent, supplies, and services. Some of these will be covered off by the government programs, however this is a great time to evaluate waste, possibly change suppliers and negotiate extended or altered re-payment terms. Consider how much inventory you need going forward and delay future purchase orders as required. It is important to maintain good supplier relations so ensure you work with them to have a solid supply chain for the future.
Evaluate your current accounts receivable and reach out to see if your customers can pay their current amounts outstanding. There may also be some opportunities to make new sales to some of your existing customers.
If you are a franchise or have a parent company, lean heavily on them however you can. It is in their best interest to ensure your success. Reach out to your industry specific organizations that you are a member of (such as Travel or Tourism, Home Builders etc.) and inquire if any special help is available industry wise. And do not forget to reach out to business associations such as your local Chamber of Commerce. They support and promote local business and are dedicated in advocacy efforts at the municipal, provincial and federal levels to ensure a positive economic environment in the community they serve.
If you require further legal or accounting expertise to help you understand the full picture for your business, ensure you contact your lawyer or accountant. This is very important to ensure that you have the best information (both in the short and long term) to help you in planning for your specific instance. You also have rights and responsibilities as an employer so ensure you are making informed decisions.
Long Term Business Strategy
Your business has slowed its operations, closed as a health precaution, or you are working harder than ever to keep yourself afloat. No matter your stage, this is an opportune period to rethink your long-term business strategy and find new ways to deliver your services and generate revenue.
Did you create a Business Plan before you launched your business? It might be good to review it now as you may have recorded some great ideas at that time for alternate sources of income. Can you think of some “out of the box” ways you could deliver your products or services differently? What kinds of changes are your competitors implementing? What are your current marketing and sales strategies and how can they be altered (either to get to a new market or an existing one)? And do not forget to utilize your staff’s expertise and experience – they may have some great ideas that you can tap into.
Some of the ways you can implement changes may include:
- Increase your social media presence to ensure your customers know your current status of business operation; let them know how you can help them and how they can help you.
- Choose alternative sales methods to liquidate stock.
- Implement telephone sales (including establishing and scheduling curb-side pick-up or delivery).
- Implement a secure sales portal on your existing website.
- Promote online sales if you already have a platform by offering deals and discounts to boost sales.
- Utilize technology to maintain customer accounts.
- Utilize platforms such as Zoom, Google Hangouts or Skype to keep in touch with customers and offer virtual support such as content webinars or live videos.
- Promote gift cards or gift certificates (which are great short-term cash sources).
Also note that regular Health & Safety procedures will need to be upgraded, some permanently going forward. Many jobs require that employees work in close proximity to others or to the public, so it is imperative that you think about possible solutions to this. Remote work, creating greater physical spaces between employees, job sharing, and implementing various shifts can be some options for some businesses. When updating your employee procedures think about some of these and how you can best achieve your objectives. Building in physical distancing will be imperative. We have seen innovations such as plexiglass barriers at cash registers, physical distance markings on floors, limiting the number of patrons at one time, and implementing one-way aisles. These are visible steps that protect employees and the public. Some companies have already implemented “no handshake” policies and we will see more of this going forward. Personal Protective Equipment, in some shape or form, in addition to changes to tasks, physical workplace layouts, and enhanced cleaning procedures will be the new norm for many jobs. You must ensure you plan financially for these changes. Being tenacious towards the health and well-being of your staff and the public will bode well for your reputation.
Seize the opportunity now to make the adjustments you need so your business will be stronger than ever when we put this crisis into the history books.