Innumerable business from all over the world is collapsing while coping up with the catastrophe of the coronavirus. People are quarantined, and work from home is the new norm.
The time is challenging for small business owners, and newly launched startups since their trajectory path of profit are somewhat going in the downward direction right now.
It would be sheer foolishness even to think that this crisis won’t last long provided the conditions are getting worse every passing day. The worldwide crisis in the late 2000s was quite similar.
Since we are talking about finance, we have tried to sum up a few points on how you can make your survival kit in this pandemic. These tips will surely help in improving the digits in your balance sheets!
- Look out of cheaper alternatives on your internet, cable, monthly rent or phone bills. Use your power of bargaining and make your landlord and service providers negotiate to sign on at a cheaper rate. This will be an effective deal to save money efficiently.
- Make a list of optional and non-optional expenses. Cut down on the optional ones since they are not a necessity amidst this pandemic. You don’t want to be broke the entire month and gift your friend an expensive gift for his birthday, do you?
- Investing in liabilities will not be the right choice during these challenging times. Instead, hold on to that during the recession period since you need cash to fuel your business.
- Give exclusive discounts to your best customers like a 1% to 2% discount on the total price if they pay the whole amount early in a single shot. Also, you can opt for sending an appreciation letter or call your best customers for their continued patronage. Communicating in this way can give you an edge in getting new potential clients through them. This way, you can keep a continuation in the cash flow.
- Keep a limited but efficient workforce. Curtailing is expected during this recession but keep in mind that this could be an excellent time to remind your customers that you continue to provide them with the best services with competitive pricing even during this pandemic. This will help you to keep your usual customers in hand. Also, slashing labour costs while boosting productivity is a challenging task. Thus, layoff the required employees at once if you are considering to reduce the workforce. This will help the remaining employees to focus better without having to worry about their job security.
- Update the amount and the type of stock in your inventory. Reduce and revamp the product line according to the present necessities of the customers. Try liquidating your lowest performance products to deck up some cash for future proposes.
- Launch better initiatives. This will permit you to grab a more significant piece of the market share so that this can be used in the recovery time efficiently. This is a great way to stay ahead in the competition.
- Reduce the working hours to retain productivity in case if you have a thought to cut down on their salaries since it would be foolish to think to cut down on their wages and also expect them to work with the same enthusiasm.
- Transparency is the key. Last but not least, everybody is going through a hard time and staying transparent about the situation with your employees will give boost to the overall business and its productivity. Also, building communication in such a way that they can contribute equally to the problem-solving process is a win-win situation here!
Running a business during these challenging times can be a tedious task. But having a realistic goal and implementing the perfect strategies will help you to pass through this phase seamlessly.
Max Margin Accountants is a registered accounting firm based in Melbourne. We specialize in helping our clients with a full array of Business Advisory, Taxation and Accounting services. We help businesses in all industries and sectors including Automatic Mechanic, Hotel and Bar, Barber & Hair Dresser, Car Wash, Home Builder & Architecture, Cafe and Coffee Shop, Cleaner, Computer & IT Industry, Family Day Care, Gym and Personal Trainer, Small Businesses, Medical Practitioner, NDIS Business, eCommerce, Property Investors, Tradies and Taxi Drivers.