More than 100,000 businesses permanently shut their doors because of the coronavirus pandemic, while many others temporarily put operations on hold. Small businesses were more affected because they didn’t have the required cash flow to keep them afloat until things stabilized.
If you want to revive your business, you’ve probably gained a lot of experience and knowledge to keep your business operating even when challenges arise. Before you start, you may want to consult a financial advisor and have questions to ask a financial advisor drafted.
Here are some tips your advisor may give you:
1. Cash Flow Is Important
Having enough inventory or buying all your office supplies when starting is not enough. Have enough cash to circulate through the different seasons. If you have payments or expenses to pay today, such as salaries, but money is coming in next week, it will not work well.
Have enough cash to support you for several months, which cushions you when business is slow, or clients don’t make payments on time. It’s also essential to have enough liquidity to take care of emergency loans or other expenses.
2. Have More Control Over Your Expenses
Your business has not yet recovered; therefore, make smart financial decisions. You may want to lease rather than buy some of the equipment when starting. The process is cheaper, and you won’t have underutilized equipment lying around.
It may take months before you can perform at 100%. Invest in only what you currently need, then grow gradually. If you are not sure of an expense or investment, give yourself a few days to think about it and if you still feel you should go for it, invest.
3. Build Trust With Your Suppliers
You may want to rethink who you choose to do business with. Although the emphasis is on quality service delivery, you may want to build long term relationships too. Multinationals may offer the services you need, and you don’t have to worry about them running out of suppliers, but truth be told, they don’t have the time to know you personally or care that much about your business.
Small businesses, because they are still expanding, strive to cultivate loyalty. They will go the extra mile to make sure your needs are met. On your part, work to build trust. You never know when you’ll need a favor from them. If possible, send their payments early and notify them. A small business will appreciate a partner who pays earlier because they need the cash flow.
They too will try to reciprocate the kind gesture by sending your deliveries earlier or working extra time to meet your orders. If you are ever in a cashflow crisis and need emergency supplies, they won’t mind making deliveries and then wait for the payments at a specified date. To build more trust, keep your word and only ask for credit when you need it.
4. Hire The Right Talent
It might cost you more, but your business needs the right talent to stand on its feet again. If you have 20 employees and 4 of them underperform, it means that 20% of your workforce’s responsibilities are not met, or the performing employees are overworked. To avoid this, hire the right talent and outsource some of the duties such as IT management, recruitment, and cleaning. You will pay less when outsourcing and at the same time have top talent taking care of the responsibilities.
5. Don’t Ignore Marketing
Your marketing efforts will let your previous customers know you are back in business and attract new ones. Use whatever chance you have to talk about your brand, specific details about products, discounts, or any offers you have. Use any form of communication with your clients as a marketing platform. You can use the printed receipts, invoices, follow up emails, and quotes to softly market your products.
6. Take Care Of Yourself
Your business might need more than 100% of your input, but you will be exhausted if you don’t take a break. Also, pay yourself. Don’t invest all the money you make into the business and forget your other needs. When you have a work-life balance, you are less stressed, have more energy, and can better focus on building a thriving business.
Also, don’t neglect your other relationships. As much as you need to spend time at the company or mentor your employees, your family also needs you.
As you work hard to revive the business, focus on retaining loyal customers. Happy customers market your products to their friends, which helps expand your business faster.