Jump-start Your Business Post Pandemic
The COVID-19 pandemic has been devastating for small and large businesses alike. Even those companies that remained open during the pandemic saw dramatic falls in sales. And, of course, consumers have been badly affected by the crisis. Many people lost their jobs or were reduced to working fewer hours. The rollout of the first vaccines hopefully marks the beginning of the end of the COVID-19 crisis. So, companies must now turn their attention to recovery. But how do you put the pieces of a business back together again after such a catastrophic event? Here are nine ways to help you jump-start your business following the COVID-19 pandemic.
1. Assess the Damage
The first step towards rebuilding a business after a pandemic is to assess your current situation. So, update your accounts if you haven’t been doing so. And take stock of the assets you have in the business. Compare your balance sheet as of today with the prior year’s balance sheet to reveal the crisis’s financial impact. Consider, too, the effects that may not be shown in the financials. You may have laid off staff who will need to be re-recruited or replaced. You may have put advertising and product development projects into hibernation. So, the cost of restarting the business is likely to be more than repaying overdrafts and loans that you have built up during the pandemic. And you may need a cash injection to get the company rolling again.
2. Revisit Your Business Plan
The restarting of a business after the pandemic will be like starting over again to some companies. You may not be able to rely on the assumptions that you made in your previous business plans. Consumer shopping habits have changed during the pandemic. Some people will be reluctant to revert to visit physical stores, instead opting for online shopping whenever they can. Business to Business (B2B) sales will not be the same again for some time, too. More meetings will probably be conducted online. Things like trade shows will likely be virtual for some time, too. So, your business plan will need to be adapted to the new normal. As mentioned above, you may also be constrained by the pandemic’s financial impact on the business.
3. Update Budgets and Forecasts
Budgeting and forecasting will be a bit hit and miss following the pandemic. The business landscape will be different, and there may be virus outbreaks in the future. Even so, you can be sure that your old budgets and forecasts will need to be updated. And you will need to budget for the business restart costs, like recruitment, restocking inventory, and servicing debt built up during the pandemic. It will be best to assume the worst at first. So, prepare budgets based on limited sales and look for ways to reduce costs through efficiencies. Build as much agility into your as you can, too, so you can adapt quickly to changes in the COVID situation.
4. Consider Funding Options
Your business will likely need an injection of working capital to get started again. Unless you had a substantial business cash reserve or have personal funds to invest, you will probably need external funding. You may be able to obtain financing through federal systems like the US Small Business Administration (SBA). Alternatively, traditional forms of lending, such as standard bank loans and overdrafts, may be an option. However, it may be challenging to get approval for loans in the short term if your business can only demonstrate minimal sales for the past twelve months. So, you will need to demonstrate good growth potential in your forecast figures or be prepared to guarantee loans personally. You may want to consider alternative lending such as accounts receivable financing or invoice factoring. Invoice factoring is a fast and easy way to improve cash flow. And, because you sell your invoices to a factoring company, the funds you receive do not appear on the balance sheet as a loan. Factoring sales invoices provides access to the cash due from sales almost immediately and smooths out the cash flow. Factoring give you a cash injection and makes cash flow management more straightforward.
5. Set a Realistic Timescale for Recovery
You will probably be itching to get your business running at full capacity again. However, full economic recovery is likely to take time, and there may be some setbacks along the way. So, it would be best to rein in your ambitions at the start and plan for your business’s long-term recovery. The priority is getting the company back into a profitable trading position first, albeit at significantly lower turnover. Then, aim to expand the company over time, taking account of the various costs you will incur restarting the business. For some businesses, reopening post-COVID will be like launching the company from scratch again. So, it would be best to apply the same level of caution now as you used when you first set up the business.
6. Kickstart Advertising and Marketing Early
It would be best to restart marketing and advertising as soon as an end to the pandemic on the horizon. Customers may not be banging on your day from day one. But it would help if you let people know that your company survived the crisis, and you are open for business or opening soon. Demand may be stifled for some time to come. As a result, your marketing and advertising budget may need to be higher than pre-COVID days to attract customers in sufficient numbers to return the business to profitability.
7. Gear Up for Increased Demand
As people get back to work, retail, leisure outlets, and other businesses reopen, there will be an increase in demand for most types of products. In some sectors, the initial surge in demand could be significant. So, businesses must be prepared to meet this demand and benefit from the early stages of recovery. People may need to be hired, and orders for materials will need to be placed. But there will be lead times on all items needed to get a business restarted. So, it would be advisable to begin gearing up for the increased demand sooner rather than later. However, it would be unwise to expect a full recovery immediately. So, it would be best to order materials for the short term only to hire employees when you are sure there will be sufficient work for them.
8. Be Prepared for Further Waves
There could be a few false starts on the road to recovery. So, it would be best to plan for the possibility of putting your business back into hibernation again. New variants of the virus could emerge. And some countries in the world are a long way behind others in getting the virus under control, which will continue to hold back the world economy. The relaxation of social distancing rules could also cause a further wave of COVID-19. So, plan to maximize profits in the short term and try to build up a cash reserve if you can. You might need to manage your business through a few more lean times before things return to anything like normal.
9. Plan for the Next Crisis
Hopefully, the recent pandemic will be a once-in-a-lifetime event. However, there are no guarantees. So, savvy business owners will use what they have learned from the COVID-19 pandemic to plan for the next crisis. For example, once trading conditions improve, you might want to consider building up a cash reserve. Being prepared for workers working from home again in the future might also be a good move. The crucial thing is to retain a degree of flexibility in the business so you can swiftly put a plan B into action should it again become necessary
The Bottom Line
To sum up, assess the pandemic’s financial impact on the business and take stock of where you are now. Raise financing if you need it to restart the company. Then, plan to maximize the short-term benefits of a return to normal but be prepared for the possibility of some setbacks in the long term. If a business was sound pre-COVID, there is no reason why it will not prosper post-COVID. But you may need to make some adjustments to remain competitive in a post-COVID climate, and you will need to recoup the losses incurred during the pandemic.
About Universal Funding
Universal Funding is a nationwide invoice factoring solutions leader, supporting growth-focused businesses with scalable factoring solutions. With its invoice factoring, payroll funding, and purchase order financing services, Universal Funding provides clients with the working capital needed to grow and support their businesses without taking on new debt. Ranked as one of the nation’s top invoice factoring companies, Universal Funding provides cash flow financing for businesses all across the United States.