Small businesses have been hit hard during the COVID-19 pandemic. Even as states begin to reopen, many businesses are struggling to stay afloat. Closures lasted longer than anyone could have anticipated, leaving some small business owners in a panic as they tried to make the best of the situation. We’ve seen many businesses succumb to the pandemic’s economic consequences. With prudent financial planning, however, you can strengthen the financial security of your business for the long-term.
Here are 9 of our advisors’ best tips.
Take stock of the big picture.
Before you begin making changes, take stock of your situation. Enlist a professional to analyze your business’ overall financial health. This way, you can assess the situation for what it is, without infusing your emotion into it. You must know what you’re dealing with before you can create a plan to improve.
Cut where you can.
Once you have this analysis, take a good hard look at your costs. There are likely areas that you can cut that will add to your bottom line. But, make no mistake: do not cut too much. Some spending is necessary to sustain and grow your business. You want to decrease expenses that are not vital. For example, a great item to cut would be a software program or tool that you no longer use or that didn’t have the return on investment that you had hoped for. As you analyze your profit and loss statements, it’s likely that you’ll see spending like this that can quickly and easily be stopped.
Negotiate with your vendors.
Vendors are dealing with similar circumstances and, ultimately, they want to keep your business. Talk to your vendors about the possibility of lowering their rates or reducing your services in a way that is not detrimental to the quality or growth of your business.
Consult your financial advisor.
Your financial advisor can truly be an ally in difficult times like these. An advisor can design a sensible plan that will guide your financial decisions through rough patches. Beyond that, an advisor can build a strategy that maps out your path to reach your highest financial goals.
Consider refinancing.
Refinancing when rates are low could be an excellent option to lower your expenses, depending on your individual circumstances. Talk to your financial advisor to learn more about the refinancing process and whether it’s right for you and your business.
Stay abreast of future assistance opportunities.
Always be on the lookout for potential assistance. There are many organizations lending a hand to small businesses. Search for local and national grants that focus on businesses like yours. For example, if you are a registered woman-owned business, you can find multiple nonprofits that have resources that might be of interest to you.
Maintain or improve the quality of your product or service.
This might seem difficult during such challenging times; however, quality plays a major role in your business’ success. It’s crucial to ensure that your quality doesn’t decrease. Ensuring that you’re upholding the highest standards will keep your customers satisfied and engaged with your business. Word-of-mouth advertising can go a long way in improving sales and helping you recover.
Increase communication and transparency with customers.
Customers are not under the assumption that their favorite local businesses are doing just fine during the pandemic. They know it’s hard, and they likely want to help. Share the different ways that your patrons can support you. Maybe it’s purchasing a gift card, or maybe it’s referring your business to their friends. Whatever it is, they will feel good about keeping local businesses alive.
Don’t try to go it alone.
As a small business owner, you might sometimes feel like the weight of your business rests entirely on your shoulders, and there aren’t people out there who can—or want to—help you. We’re here to tell you: you aren’t alone. Those people are out there, and we hope that you feel empowered to reach out and get the help you need.
Contact us today to learn more about improving the financial security of your small business.
