The lockdowns related to the pandemic have seriously hurt local businesses, especially those that are classified under Small and Medium Enterprises. Local business owners had to endure the harsh impact of lockdowns, and those that are allowed to operate had to do so with the strictest of restrictions. Such restrictions heavily impacted their operations that their income suffered significantly too.
As soon as the economy reopened, business owners scrambled to get back on their feet. While some were no longer able to make it due to excessive losses, others managed to re-open.
Bouncing back after a huge business loss
Unlike big enterprises that can count on savings and funds, most small enterprises do not have other means to finance extensive marketing campaigns that could immediately resurrect their respective businesses. Not all small business owners were able to access loans and government assistance concerning the devastating impact of the lockdowns.
This article will discuss some of the best ways to build back the business, to achieve full recovery following the losses of 2020.
Assess the financial damage and other losses
The first step towards total business recovery is to get to know how many losses were incurred during the pandemic. The business owner should update his profit and loss, and cash flow statements and compare these to the past annual average earnings of his business. By comparing the numbers, the proprietor gets to have a good grasp of the concrete data that will tell him how much possible profit went down the drain.
The business owner should likewise quantify other losses such as downsizing of employees, getting a smaller place to conduct business and therefore lowering the capacity for productivity and business operations, cut down on marketing budgets that may have led to a smaller share of the market, among other setbacks not directly related to profits. He must monetize these losses as well so that he could see the full financial impact of the pandemic on his business.
Align the business plan to the new normal
Small business owners should then review their business plan and check if it will still perfectly work amidst the new normal lifestyle. For instance, some brick and mortar stores that significantly rely on foot traffic before the COVID-19 pandemic may have to shift to curbside pick-up and delivery services. He may also have to consider allotting funds for app development, and third-party pick-up and delivery options.
SME Experts also advise small business owners to make sure that the financial goals of the business remain realistic amid the pandemic. After evaluating the business plan, owners should then analyze if there is a need to pour in additional funding or avail a business loan. If the answer is yes, then he should also take the opportunity to see what small business assistance is made available by the state to help business owners get back on their feet.
Set a timeline for the recovery phase
When everything is all set, the business owner should then set a timeline for recovery. The timeline will hopefully lift some of the stress and anxiety in rebuilding the business since not everything could instantaneously happen soon after a rebuilding fund is secured. It takes time to rehire employees, replenish inventories and stocks, and get the word out that the enterprise is once again open for business.