Small businesses were the most affected by the pandemic in the last two years, given that certain restrictions and the uncertainty of the future made people more reticent about purchases.
On top of that, due to the need to implement safety measures in the workplace, businesses reported an increase in operating costs, contrasting with the low sales. This has led many small businesses to cease their activity as some were experiencing supply chain disruptions.
All in all, it was a bad time for business, but now, according to OECD, 71% of small businesses are optimistic that they’ll emerge better after COVID-19. Regardless, many of them didn’t have the knowledge to get through these hardships, and, looking back, things could’ve been done differently, but we can learn from those past years. So, as a wrap-up from the lessons learned, here are some tips to keep your small business afloat in difficult times.
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Reduce waste
When discussing waste, we can point out cost reduction and recycling. The first aspect is about reducing the monetary budget by testing the Pareto Principle on your marketing strategies. This method implies that 80% of your business success can be derived from 20% of your marketing efforts. On the other hand, 20% of customers can give you 80% of your business incentives; therefore, it’s time to start focusing on your loyal customers.
Secondly, when talking about recycling efforts, you’ll have plenty of cost benefits from doing it the right way. Reconsider the trash pickups and decide if they’re that much needed when you could reuse some of the materials or reduce resources when possible. By going green, you may have opportunities for state incentives or tax credits, depending on where you live.
Other advice for saving some money, in the long run, is to make more significant financial investments. Sounds weird? Well, consider them only when you have the incentives, but installing solar panels will significantly reduce electricity consumption, and you can invest those costs in something else for your business.
Have an accounting software
In tough times, it’s important to closely look at your balance sheet and see where you could cut corners without minimizing the quality of your products and services. Accounting software may be the best investment in taking care of your expenses and salaries. Furthermore, small businesses in the UK will have to use digital software to record and submit their VAT returns. Even if you’re currently using Excel to manage your records, it can be pretty challenging to keep up with all the tasks you need to perform to keep your business in place.
Luckily, you can easily migrate your data to accounting software, so you’re not at risk of losing it. By working in the cloud through this software, you can access the information needed on any device, whenever you need it. This way, you will also be able to see the bigger picture of your business and consider all the opportunities and changes required for your company. Cloud is also a safe space for your data, so you won’t have to worry about breaches or losing data.
Apply for financing
When nothing else works, and you have some fixed costs that need to be taken care of, it’s a good idea to apply for financing. In the UK, the government supports small businesses with grants that you can access. Moreover, next to capital grant funding, you can get one-to-one support for your business and an incubator office space if needed.
Whether you need financial support or to get your business back on track, you can apply for recovery scheme loans, programs for business credit improvement, leasing, and much more. Some of the requirements for the applications include:
- A good credit score
- A report regarding the annual revenue, net operating income, and personal debt-to-credit ratio
- Potential collateral to back the loan against default (equipment, inventory, or real estate)
After successfully applying, a representative will give you a call to confirm the application and inform you of the documents that are further needed to provide, including:
- Bank statements from the last two years
- A recent year-to-date revenue statement
- Balance sheet, with assets, capital, and liabilities
- Business and personal tax returns
Be wary of some common mistakes regarding the loan applications because they might lessen your chances of getting the financing. For example, missing deadlines, lying on your application, or making major changes to your business will not offer your company a good image.
Adapt your business
One good piece of advice for every business is to watch what their competitors are doing. Because there will be small companies that seem to do just fine, you’ll wonder what you’re doing wrong. Well, most of them have already adapted their business to the market trends, meaning that they redefined their brand or provided their services according to the current events. An example of this movement is the shift from physical stores to e-commerce that most shops got accustomed to when the pandemic struck.
As a small business, it’s most likely that you can change your ways of approaching clients more efficiently, as you don’t need to make important changes but rather adjustments. Adapting doesn’t necessarily mean making everything from scratch, but observing how your business can be shaped to the current trends and stay relevant.
Another way to do this is to talk to your customers and ask for opinions by sharing surveys for them to complete or simply reaching out to them on social media and finding what would make them stay when other businesses have it better already. Also, consider the previous feedback and how relevant it is now that you’re going through harsher times. By forming a deeper connection with your audience, you can create a supportive community and help each other. For example, back in the pandemic, content creators started live streaming to help people feel less lonely and connect with them. In this way, they could stay relevant on the market but still offer qualitative content for their audience.
In the end, what matters is the experience. You don’t have to overwork yourself or get into burnout for the business to thrive; instead, try to be more innovative and creative to work less but smart.
