COVID-19 has brought uncertainty and anxiety to business owners all over the world. Luckily, there are key actions you can take to minimize your losses, stay healthy, and recapture lost revenue.
First, you’ll want to analyze your current situation in depth. Once you dig in and have clear numbers for your payables, receivables, and inventory, you can begin to make decisions for the survival of your business. Let’s get started.
1. Create a battle plan for the next six months
“Battle planning”, as I like to call it, is a must in our current economic reality. No matter how much or how little COVID-19 has affected you up to this point, you need to list out, in specific order, the decisions you will make if they become financially necessary. Check out our cost-cutting checklist for every business expense category to get ideas. Getting ahead of the game on this will make it much easier to make rational decisions without getting caught up in emotion when the time comes. Knowing what triggers you plan to pull first, second, third, and on down the line will help you make smart, swift decisions to maintain health in your business.
2. Drive digital sales with a rebooted website or app
With strong social distancing measures in place, the digital world is your best bet for capturing customers. Freshening up your website or expanding offerings on your eCommerce site can do wonders for driving new business. You need to take a close look at your website and whether you are truly doing a good enough job at creating calls to action that result in direct sales or leads for your sales team. At times like this, you cannot afford to lose out on those visiting your website who could be potential customers or even new additions to your mailing list.
You should also consider whether a mobile app for your business would be a smart decision to drive more sales or to enhance the customer experience in a way that would make your current customers more stickly. Not only should you be looking to bring on new customers, but you need to find new ways to keep your current customers loyal and compelled to buy more.
If you think an app might do the trick, Onsharp can help you plan, develop, and launch your project.
3. Promote gift cards to boost cash flow
The viability of gift cards will depend on your industry, but they are a great option that you should be considering right now. As part of your social media strategy, promoting digital gift card purchases for later use will produce instant cash flow in a way that doesn’t require physical contact with your customers. You can also sell physical gift cards and mail them to your customers. Either way, gift cards are a great way to bridge the gap until you are able to reopen your physical location.
4. Leverage insurance policies and crisis loans/grants
The US government recently launched the Paycheck Protection Program (PPP) and the SBA has expanded the EIDL program to include helping small businesses distressed by COVID-19. Both of these programs should be high on your radar.
Though the funds for the PPP program were exhausted after about a week of its launch, it appears that a second round of approximately 500 billion dollars is going to be added to the program as there were not enough funds to help all the small businesses that needed it. You need to be applying for these programs as quickly as possible. The PPP loan, if approved and used on payroll and other qualifying business expenses, can be converted to a grant. That’s free money.
The EIDL program is money that you can borrow at a very low interest rate, so it would be smart to apply for it to have that money available in case you need it. If you don’t end up needing what they give you or needing all of it, you can simply pay it back early with no penalty.
I would also recommend that you take a good look at your insurance policy and see if there’s any coverage for crisis circumstances like COVID-19. Since the legal language of insurance policies can be daunting and confusing, I’d recommend you call your insurance agent and have them talk through it with you to see what options you may have under your insurance policy.
5. Get clever with inventory
What products are your bestsellers? As the saying goes for many businesses, 80% of their revenue comes from 20% of their products. In a pinch, consider promoting your best selling or highest margin producing products and cutting down on other products that have lower margins or are expensive to ship. If you’re struggling to manufacture because of factory shutdowns, you need to focus on moving the inventory that you do have as quickly as possible and turning it into cash. There’s even WordPress features to help you track inventory and find insights.
6. Launch creative revenue streams
Alternative revenue streams are everything in a COVID-19 world. You should think about how you can offer products or services in new categories or using new methods. For example, if you’re a yoga studio, you may be able to offer classes online. Or if you’re a bookstore, you may do some social media campaigns to “send a book to a friend” to generate income while your brick-and-mortar store is closed.
While the current COVID-19 situation isn’t easy to navigate, it can be done and it can be done with low stress and well-planned decision making. I encourage you to really dig deep into your business and into your finances, making sure you understand what must be done in order to keep your business health.
Take a serious look at our cost-cutting checklist for every business expense category. You may just find corners to cut and new revenue streams you didn’t know were possible. With proper planning and execution, you can set up your business to not only survive, but to thrive as we work to defeat this current health crisis.
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