Balancing the books is always one of the hardest challenges in business. However, it has become increasingly difficult to manage this aspect of the venture due to the impacts of COVID-19. While there are many contributing factors to consider as you look to repair the damage, the financial elements must remain a priority.
These are probably unprecedented times for your business, but you can bounce back in style. Here’s how:
Due to a lack of revenue over the past couple of months, satisfying operational costs may be a little harder than usual. Therefore, borrowing a little money to get you through this next phase is something to consider. In fact, it could be a good time to expand as your competitors struggle to make ends meet. Some boutique investment banking companies like Everblu Capital can connect you to investors. It could give you the platform to finally gain an advantage over your direct competition.
- Speak to Creditors
Governments around the globe have introduced schemes to aid SMEs with their taxes and financial needs. Meanwhile, finding cheaper services like packaging can help too. However, you can take this process to an even greater level by negotiating terms with your creditors. Expenses like insurance and utility bills may offer a partial refund as you have not needed the services while the company has been shut. Alternatively, agreements on delayed payments or stretched repayment plans can help. Creditors don’t want your business to fail before they are paid. So, they should be willing to discuss some options.
- Drop Your Prices
The impacts of the coronavirus have hit consumers hard. Many of them will not have the financial resources to spend like they did before. A reduction in prices or interest rates may result in smaller profits per item. On a brighter note, though, it can lead to a spike in the volume of sales. The change of tactic could make all the difference over the coming months. Better still, it’s a good way to convert new leads that can subsequently become loyal, long-term clients. The sustained rewards are incredible.
- Alter the Daily Operations
While the value of your employees cannot be emphasised enough, a change to your staffing approach can work wonders. Platforms like People Per Hour can help you fill one-off and temporary roles with freelancers. Meanwhile, remote-based workers can further support the business in a cost-effective manner. The direct staffing costs are reduced while the indirect operational overheads can follow suit. The fact that this helps you manage social distancing requirements without losing productivity is a big bonus too. Do not skip this feature.
- Offer Discounts on Early Payments
If the company is waiting on invoices to be paid, this revenue could be the safety net. Offering a reduced rate for an immediate payment can allow you to gain the funds ASAP while clients cut their overall costs. Right now, this could be a mutually beneficial agreement that has telling impacts on your cash flow management. As for subsequent credit agreements with customers, try to secure a bigger deposit with lower monthly payments. The more money you see right now, the better.