It has become challenging for most businesses to keep their financial wheels rolling due to less revenue churn and the general uncertainty in the global financial environment. Unfortunately, the impact on startups or small businesses can be way more brutal as they have scarcer cash reserves and a smaller margin for managing such a big blow.
So, during such testing times, entrepreneurs can adopt the following practices to cope with the ongoing crisis.
Take support from your employees and reduce their cost to the company.
Ask for a better credit line from your vendors and suppliers.
Try to take advance payments from your customers and clients.
Talk to your bank for increasing credit limits, limits of credit cards, corporate credit cards. Take approval of new loans.
Take overdrafts, BG, and LCs from banks.
Sell off your nonproductive assets even if you are getting a little or no profit. Any asset or business which is not giving your good cash flow or which is not going to give you in the next couple of months can become a liability for you. Sell it off and convert it into liquidity as fast as possible.
During the time of crisis and pandemic, digital will not die and will prove to be a prominent mode to reach consumers. More and more businesses are exploring Facebook, LinkedIn, YouTube, and Instagram to build connections with their target audience on online platforms. Elevate your digital strategy during the COVID-19 crisis. When you go digital, you enter a global level competition so you have to be unique.
If any of your clients can give you regular cash, retain that client, and give extra mile services. If you retain existing clients then there are high chances of your business to survive and even thrive in the future. To retain customers during COVID-19, you can pivot your products or services to fit consumer needs, and use technology and social media to share personalized helpful resources.
Develop product focus approach and not market focus approach. Do research and development on your product to make it better. Try to digitize it. Improve the quality of your product. Small companies can transform into bigger companies when their product quality is world-class.
Adversity is not a new concept. As entrepreneurs, we should be ready to face all these challenges that come our way with determination, high spirits, and innovation. Also, it is important to stand united and help one another in whatever way we can. Stay safe and stay healthy. Like all difficult situations, this too shall pass!
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Originally published August 1, 2020