The Covid-19 pandemic has wreaked havoc on the world and businesses are reeling under its effect irrespective of how established they are.
The social distancing and the 2 months long lockdown have compelled businesses to relook at how they manage and operate.
For businesses, the greatest challenge is keeping the cash-flow positive. But that has become a challenge because of the uncertainty of the current financial times and the less revenue churn-out.
The effect on the small businesses or startups can, however, be much more brutal as they have much less cash reserves and much smaller reserves for managing the sudden slumps. The rippling shutdown effect can have a key effect on the global economy as the business sectors are suffering from lower revenue generation because of the slump/halt on the sale of services and products.
It is for this reason that businesses now should adapt to the new set of aspects and rules for surviving this slowdown and alleviating risks triggered by the Coronavirus pandemic.
- Keep Track of Expenditure – Revenues are adversely impacted during the crisis times and it is essential that businesses keep track of their expenditures. Judging the expenses will offer a clearer picture of where the company stands and assists to strategize accordingly. After the pandemic gets under control, companies can follow this to keep themselves constantly updated on where the organisation stands. This also gives them an upper hand to be ready for the unexpected downfalls.
- Check the Feasibility of the Business Model – The market is changing each and every week and it is essential that you reconsider the business model and analyse where the business stands as per the assumptions concerning the cost and revenue. This is crucial for tracking the current financial metrics and flow of cash. Keep in mind what your runway is. Apart from that, businesses must evaluate the new impact on the collections, new sales, potential bad debts and credit cycles.
- Plan in Advance – A forecast would do well for businesses to be prepared dealing with the current situation. On the basis of the nature of the business, this plan can be executed for a period of 3-18 months. Strategies can be made on the basis of the rough estimate of how long the pandemic is going to last. For example, if it is assumed that the pandemic is going to last 3 months, then certain flexible expenses like travel, hiring and marketing can be instantly paused. Now if the pandemic goes on for 6 months or more then the companies have to reassess and focus on the essentials. They should concentrate on the renegotiation of the fixed expenses (salaries, rents, equipment lease agreements), sales (online vs. in person). Now if the pandemic continues for more than 1 year, the business then would require to seriously reconsider their plans and pay attention to keep the business afloat. This holds particularly true for the upcoming company. Businesses would call for revision manufacturing timelines and revenue goals along with the creation of operating plan. Management and leaders of an organisation must maintain the communication transparent and upgrade their investors and employees as frequently as possible.
- Secure the Investments – Capital is vital for fuelling business. For the entrepreneurs, one of the most essential questions may be where the capital will come for the given scenario. There are many who have sufficient capital for deployment for the coming years and they should not opt for using it during this time. However, we may witness a dip in in HNI/VC funding in the short run. Investors may become more vigilant and may take longer than usual because of the diligent, stringent procedures. After every crisis, the market bounces back. For raising the bandwidth, organisations still approach the existing investors for added funding to keep the businesses in an unhindered manner. The existing investors are more likely to present a helping hand as they are aware of the business model that they have invested in. The current focus for businesses is to weather the storm and sail it through smoothly.
- Communicate with the Customers – Your customers are facing their issues and trying to survive the situation that is unfortunate for them, too. They are trying their best to empathise and cooperate with the crisis of the people around them. So communicate with the customers for understanding their perception of the solution that you are offering.
- Keep the Stakeholders Informed – The stakeholders play a pivotal role in the success of the organisation. Seek for the external experts or investors to plan and create strategies to advance. You should clearly communicate the impact of the situation on the business with your various stakeholders.
These are just some of the strategies as suggested by the digital marketing experts that you should implement to help your business survive the current pandemic crisis and emerge out of it for hopefully better days ahead.