The coronavirus outbreak is a human tragedy affecting millions of people worldwide. More than 175 countries have reported COVID-19 cases with global cases at more than 740,000 and around 35,000 deaths as of March 30. It has impacted the global economy in unimaginable ways from which recovery may take years. As global demand has decreased, many businesses have shut down globally.
In these challenging times of global coronavirus pandemic, businesses are in a fixed position. Many small businesses and SME’s have been adversely affected due to lockdowns and quarantine. However, it is not yet too late to take the right measures to save your business.
Ways to Survive COVID-19
Small businesses need to weather the pandemic because these businesses provide services to large industries, and so are vital for the national economy. But the question is, how can your business keep up with this crisis of colossal magnitude?
Here are some of the ways small businesses and entrepreneurs can protect themselves.
Secure LiquidityIn this situation of a global pandemic where businesses are shutting down, and demand is almost zero, accessibility to cash is a massive problem for small companies. Hence, small businesses are more vulnerable as they have very less liquid cash. With a further decrease in revenue due to low services required as a result of the pandemic, these companies are surely devastated. You need to secure liquidity not only to survive this crisis but also to grow your business once the customers return.
Karen Mills, Administrator of the US Small Business Administration, says:
“If small businesses can stay solvent, then there is a greater chance for recovery after the virus threat subsides.”
To brave the situation in the short-run small companies should make efforts to liquidate their assets so the business can remain solvent immediately. There are many government initiatives out there to help small businesses, so consult from bookkeeping and accounting firms in Dubai to help you liquidate and keep your business alive. There are different government assistance programs to provide relief to small businesses like an increase in loan limits, deferred payments, etc.
Also Read: How Coronavirus can Infect you via Surface
Create a Quarterly Financial Plan for Upcoming DaysNow is the best time to create a quarterly expense report and a detailed financial plan as this situation could extend until June if things don’t change for the better. Some key expenses to record are employees’ salaries, utility bills, office rents, etc.
After creating the report, speak to your suppliers and landlords and find all the options for payment. The chances are that these people are understanding and already have options that can help your business. You can extend payments in small portions to be paid monthly. As for personal expenses, look for areas where you can cut costs.
Upskill Your StaffDo whatever it takes to keep your staff with you instead of layoffs. These people rely on you, and your business relies on their support. In light of the current crisis, train your staff with additional skills to make them more productive rather than hiring a new team after and when the pandemic is over.
Enroll them in online courses that are affordable or free. For example, your sales team can sharpen their marketing skills through an online digital marketing course or by attending a webinar. Technology is everything in this digital age. By doing that, your workers would be able to implement new digital marketing strategies for your company, which can be done in quarantine or isolation.
You can also use work from the home strategy with flexible hours and get the job done just like on a typical day. Communicate with them through online platforms like Skype and get work done through computers.
Ensure Full Access to CapitalFor small businesses, liquidity is not enough to stay afloat. With almost zero revenue generation and quarantine, businesses in the service industry still have to pay wages to their staff. Debts are common for small businesses, but they can put severe pressure on the business owners. And then there is also the concern of layoffs.
According to a study conducted by JPMorgan Chase Institute, the average small business has almost 20 days worth cash in reserve. Hence, most vulnerable companies won’t last long without capital buffers and external financial support.
To cover payroll expenses and other expenses like sick leaves, loan repayment, etc., ensure that you have access to capital. There are several economic restoration programs for small businesses that you can get help from to cover your expenses and payroll payments. Contact your authorities or private financial experts to help you secure a relief package so you can maintain your staff in light of this crisis.
Tap into Resources Provided by Policy Makers and GovernmentAs discussed above, governments all around the world are putting financial initiatives to support small businesses from shutting down and layoffs. You have to be up-to-date about government announcements and their initiatives for you to meet with your expenses. You can also consult bookkeeping and accounting firms to help you register for relief programs and explore different options for financial support.
For example, the Dubai government will announce a financial package in the next week of April for SMEs in Dubai to support small businesses and entrepreneurs. Apply for loans from your government institutions dealing with small businesses, and explore private sector programs and different fintech products. For example, Facebook recently announced that because of the current disruptions due to COVID-19, the company is offering $100 million in cash grants to small businesses.
It Is Time to Take Action to Survive COVID-19 Crisis!
These times of the global pandemic of COVID-19 have taken a toll on millions of people and have disrupted healthy living. In such a situation, your company needs to be flexible to ensure that you survive this crisis. Take the above-mentioned measure before moving to cut costs and layoffs. Use this as the last measure after you have seen at least two months of damage from the coronavirus.
Don’t give up as you are not alone in this fight! Reach out to people and financial experts for support as it is time to take action.