Qantas is one of the most shocking examples of what can happen to a large company in a crisis. The huge drops in ticket prices for the year 2020 are well-documented and the airline had to drop most of its international lines to keep them afloat.
Fortunately, the situation isn’t that bleak for all industries.
Use this survival guide to explore some of the most effective tactics to offset the impact of the worldwide business slowdown.
It’s past time that you got your cash flow forecasts and financial statements ready.
Despite the current downward trends, it’s best to invest in getting the core accounting statements done. Because with the numbers at hand, it’ll be much easier to assess what’s going to happen in the coming months. You’ll also get a much better overview of your financial situation.
While you’re at it, you can rest assured that there are other companies that have to struggle to meet every bill. On the bright side, you can avoid following that path because your financial statements will serve as a reference for your investment and purchasing decisions. You can find out if you’re spending money that might hurt your cash flow.
The critical thing is to be rational with your decision-making in relation to your spending.
However, a thorough analysis may actually reveal that your business is doing just fine. It may turn out that the only thing you should focus on is to be clever with how you spend money.
It goes without saying that you have to keep an eye on your accounts receivable. Shifting your focus to other things may make a major impact on your cash flow, especially for SME business owners.
But how can you chase down debtors without souring client relationships?
For one, make sure to automate payment reminders and invoices. There are plenty of services that streamline this process and you can integrate them into your business.
At the same time, you should reach out to your customers and ask if they have problems making payments. As applicable, it may serve your interests to negotiate a more favourable payment plan. For instance, debtor financing could be an option.
In consideration of the payment options, these are the things to keep in mind.
- Invoice size
- Debtor profile
- Time elapsed
In the midst of hard times, tightening the belt is critical for your strategic thinking.
Are there any expenses that you can cut right now? How many luxuries is your business indulging in?
And if you have to make cuts, you should once again refer to your financial statements. The idea is to create room for keeping your business afloat before it’s too late.
In the case of Qantas, the company had to cut more than half of its staff. This happened in the first weeks of the global business standstill. A great many companies even had to temporarily or permanently close their doors.
On the other hand, it might not be necessary to let go of most of your staff. Small businesses may have the option to reduce employee hours instead. And if it comes down to that, you can always discuss pay cuts with your employees.
For example, you can convert a couple of full-timers to part-time, instead of laying off one of them.
Nowadays, there’s a rush to email as many of your contacts as possible, and there’s a good reason for this. Email marketing has proved to be very resilient to market downturns. But if you’re just blasting your contacts, you’re not off to a good start.
Put yourself in the shoes of the email recipients. With their inboxes flooded with offers and everything else, your emails may get lost in the torrent and remain unopened.
But this doesn’t mean you should stop talking to your customers. You just have to create an emailing strategy that would best address their pain points. As a general rule, make your emails short, to the point, and actionable.
More specifically, you should start using a software tool that can personalize and automate your emailing effort. As for the content, focus on why you’re contacting the client and how you can help. You may want to test a few different approaches to see what works best.
Transitioning your operations to the digital world may seem daunting. But in reality, it isn’t that difficult and there are lots of tools that can make your job easier. Of course, this applies to both small businesses and large enterprises.
For example, retailers can choose from a wide variety of ecommerce platforms. Most offer competent inventory management, a drag-and-drop website builder, and different payment integrations. Even better, you can get 24/7 customer support to help you get started.
You can start by weighing your needs against the options available. For instance, you may want a platform that can send automated emails and that you can integrate with your company’s CRM software.
Whatever you do, don’t hesitate to get in touch with the provider and tell them what you want to set up.
This business survival guide only touched on the basics of weathering the storm. Other options that you may want to consider include tax payment plans and government incentives. And as for the latter, you may agree that the Australian government has done a decent job of making things easier for business owners.
The key is to stay on top of your current financial situation and adapt. And if there’s room to take an asymmetric risk in your favour, consider taking out a small business loan. This may be just what you need to seize an amazing advantage in your niche.