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Building up financial capabilities remains the best way for small businesses to guide a planned reopening. The U.S. Chamber of Commerce issued a State-by-State Reopening Guide to help guide businesses.
For startups and small businesses that shut down during the COVID-19 pandemic, reopening brings a new challenge: crippled finances and reduction in reliable resources. Focusing on building up financial capabilities remains at the top of the to-do list for these businesses; the lack of adequate paying customers adds to other challenges.
Here are three ways in which small businesses can maximize the reopening of their business:
1. Reduce costs; enhance revenue
Lack of revenue, inadequate or even non-paying clients, and the inability to reach long-term goals are a few of the challenges small businesses face as they begin to reopen and as they hope for a recovery. Prudent utilization of existing resources can help reduce the pressure of financial challenges until operations become self-sustaining. If the small business is a brick-and-mortar entity, safety protocols and social distancing can motivate customers to engage. To further reinforce physical safety, communication can be contactless or restricted to the telephone, moving to physical contact only when unavoidable.
Enhancing revenue can include reaching out to new customers. Paying close attention to market trends can provide input to what customers may be saying. Identifying and incorporating demand into the business plan can help improve revenue-generation streams.
Other measures to enhance revenue, highlighted by a Deloitte report, include cutting back on variable costs and extending business payables, whenever possible. The report also outlines the importance of reviewing tax payments; a thorough study of tax obligations may reveal any payments made over and above what is actually due.
2. Embrace change; adapt to changing needs
Businesses that can adapt will survive. Just as businesses are challenged by financial uncertainty, customers are impacted similarly. Most likely, many customer requirements have changed since the pandemic began. With disposable income affected and survival threatened at all levels, businesses may need to reorient themselves to even long-standing customers and their modified means and requirements. This may extend to service offerings or marketing plans and schedules. The best chance to survive and thrive is through adapting and embracing change where necessary.
The successful business analyzes the current environment, identifies new growth opportunities, and works their business plans around changes to ensure they continue to draw customers, existing and potential.
3. Update and upgrade to thrive
Whether engaging and interacting with clients in new ways, or meeting changing demands, adapting and upgrading is essential to business sustainability. The COVID-19 pandemic has required immediate adoption of technology and digital tools and software among businesses and customers. A report by McKinsey finds that customer behaviors have changed significantly, and even as they continue to shift, the increase in the use of digital services is here to stay. The report says that demand recovery will be unpredictable and uneven across sectors, product categories, and customer segments. With digital adaptation here to stay, the ability for businesses to adequately change plans to address new requirements will be critical to a successful recovery.
Focusing on the agenda ahead is vital
It is critical that small businesses do not feel overwhelmed; the good news is that judicious small business accounting and bookkeeping practices can help ensure steady and growing cash flow. With the selective adaptation of technology, key operational areas, including bookkeeping, can help businesses develop improved financial health and manage it to levels that can support sustainability and growth. According to an article in the Journal of Accountancy, here are some key questions that can help develop a better business recovery plan:
Excellent accounting and bookkeeping practices remain the mainstay of the small business reopening guide, not just during crisis but always. Choosing help in the form of outsourced solutions can help small businesses access resources and improve cash flow, taking the much-needed step towards sustainability, together with their customers.
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