Coronavirus self-help tips
As you apply for and await help from the Government, there are many actions you can take to help secure the future of your business.
These can be summarised into the following (click to jump sections):
Being able to quickly adapt to change
Any successful business needs to be able to respond and adapt to change in the environment. This is something that you should be monitoring and reviewing all the time, not only for the duration of Covid-19, but beyond.
Anything that would affect your organisation. This could be a change in market conditions, such as interest rate and inflation, new competition in the market and even internal factors such as your staff and workforce.
The easiest and simplest way is to perform a Strength, Weaknesses, Opportunities and Threats (SWOT) analysis.
How to perform a SWOT analysis
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What are you good at?
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What is unique about your business?
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What would other people say is unique and good about your business?
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What could you do better?
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What do others see as your weakness?
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What opportunities are out there?
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Which topics are trending and can you take advantage of this?
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What resources do you need to take advantage of the opportunities?
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What has the potential to harm your business?
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What are your competitors doing?
How do I analyse a SWOT?
The crux of a SWOT is to:
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Identify anything that could be a threat to your strengths.
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Identify how to turn a weakness into a strength.
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Identify how to actualise an opportunity.
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Identify how to nullify a threat.
Going digital
An opportunity for most businesses, particularly during Covid-19, is to transition their business to online and digital as much as possible.
What are some examples of going digital?
Ask yourself the following questions:
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Can any part of my business go online? For example, online / paperless payments and deliveries or using a website and social media to keep operations going.
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Can any work process or workflow, formally manual or paper, be digitised? For example, your staff could work from home, you could scan and digitised all required resources that can be accessed online and the continue the line of communication via video calling.
Fiscal reviews
Ultimately, the survival of a business comes down to cash flow. Fiscal reviews are very important, here is what you need to do:
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Write up a cash flow forecast for the next six and 12 months.
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Prepare a balance sheet.
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Prepare a profit and loss statement.
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Become as ‘liquid’ as possible.
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Review the Government grants you could be entitled to.
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Review your Working Capital.
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Review Debtors and Creditors.
As the name suggests, it is a forecast, so you have to do your best to predict money coming in and out of your business.
A cash flow forecast predicts the future growth of the business. You can use it to predict when there might be shortage of cash and thus plan in advance to address this. It also lets you understand how any new saving or new expense affects the flow of money. For example, if you wanted to buy new equipment, you can put the figures into the forecast to assess whether it is financially viable or not.
A report that lists your assets (what you own) and liabilities (what you owe). This is an effective way to assess your debt.
A document that shows a company’s revenue, costs and expenses.
The liquidity of a business is measured by its ability to turn assets into cash. The more easily and quickly an asset can be sold, the more liquid it is. During Covid-19 and other times of uncertainty and recession, it’s important to maintain a high level of liquidity so that you can plug cash holes easily.
The first thing you should do is look at assets that are not giving the business any value. For example, machinery that is not in use or stock that you are struggling to sell and try to get rid of them as soon as you can.
You can also make sure you are billing and receiving payments from clients on time as well as negotiating the best terms with your Creditors.
Overall, anywhere you think a saving can be made, will increase liquidity.
Working Capital is the money you have available to spend immediately on daily operations.
There is a direct link between Working Capital and your liquidity. The more liquid your business is, the more cash it has available to spend thus the Working Capital is healthier.
Workforce and customer relations
A motivated workforce and loyal customers are key to your success throughout Covid-19 and at all times.
What considerations do I need to make for my workforce?
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How can I maximise their safety? Coming into the office vs remote working.
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Do they have everything they need to be able to work from home?
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What can I do to make sure I can effectively lead throughout remote working?
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Am I regularly having health and wellbeing conversation with staff?
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What Government support can I tap into to help my staff?
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Are there clear and transparent lines of communication?
With customers, communication is key. Chances are it’s not business as usual for you; let your customers know. Tell them you’re still available, how they can continue buying from you, how existing orders or subscriptions are affected and anything else, as appropriate.
You need to give them clear visibility of what is going on, and that you’re still around. This means sending out regular and appropriate communications.