As the COVID-19 pandemic is spreading rapidly across the globe, it is tossing markets, disrupting supply chains and casting a long shadow on the global economy. It is also forcing many businesses to shut down completely or sustain unprecedented losses while struggling to survive in the market. And unless your company happens to vend face mask or hand sanitizer, you may be also going through some sort of financial crunch due to the situation. So, in such a dire crisis is it possible for businesses like yours to stay afloat and pull through the economic fallout of COVID-19? Well, the answer is yes. Though there is no magic formula that can instantly perk up your finances, some strategic planning can surely mitigate the impact of the economic fallout on our businesses. That being said, here are a few effective strategies to deal with the potential economic ripple effects of the outbreak.
Get a Clear Picture of Your Current Financial Position
First of all, you need to analyze your current financial situation to make informed decisions about your business. Running through the numbers will help you determine whether you can afford to keep your employees, pay outstanding debts, or meet existing leasing or loan repayments. While clearing the debts today may seem plausible, it may not be the best decision right now. That’s because maintaining a cash flow balance is essential to keep your company alive amid this financial crisis. As long as you have a well-balanced cash flow, you can make it work. So, don’t rush to pay out more than what comes in. You can discuss the various options regarding the finances with your accountant and put a plan in place to manage your cash flow.
Figure Out Ways to Cut Costs
No, you don’t have to cut expenses out there. But, you need to differentiate between luxury and necessity. Have a close look at your ongoing expenses, and eliminate all the unnecessary outlays to keep your finances on track. In these days of uncertainties, a lot is going on which is outside your control. But focusing on what you can control to improve your finances can help your business to navigate through these tough times.
Brainstorm the Opportunities for Your Company
With traders around the world shrinking their capacity, business development plans are the last thing anyone cares to discuss right now. So, you can’t work on mission-critical things such as supply chain and production for the development of your business in these times. But you can’t just sit back either to let the virus spell the end for your startup. So, this is the time to look for an opportunity to improve your cash flow. Adapt your services to the current situation, get creative and figure out how your product and services can be relevant amidst this dire coronavirus crisis. Your product or services may not help people directly when it comes to dealing with this COVID-19 or quarantine situation. But, your business can still provide value to them by inspiring and educating them.
Take a Cue from China’s Efforts in Managing the Crisis
Lastly, one of the effective ways to deal with the crisis is by supporting each other. What if one business can offer support to the employees of other struggling business until things get better? Well, this is what the businesses in China have been doing for a while now. Amid the fallout from the virus, many sectors especially the restaurants in china are suffering economic hardship. Owing to the need to quarantine to stop the pandemic, restaurants and eateries have closed their doors and as a result their workers are being unemployed for the foreseeable future.
On the other hand a few businesses such as the online grocery delivery platforms are seeing an unprecedented surge in demand. These businesses are being overwhelmed while trying to meet the increasing needs of customers. So, one of the biggest retailers in China came to the forefront and employed the waiters, and other workers of restaurants who had lost their jobs due to COVID-19 closures. This approach helped many unemployed workers to continue their livelihood. But at the same time, it also took the pressure off overburdened online grocery platforms. Businesses around the world can learn from China and adapt this method to manage the crisis.
Final Word
If your business is significantly being disrupted by COVID-19, you can look for the available government assistance in your region. The governments in many countries have declared several stimulus packages to help business owners manage the disruptions to their business. So, don’t give up hope and take every measure possible to protect your business from financial difficulties. At the end of the day, it boils down to adapting smart strategies and taking wise decisions early on.