“Change is the only constant in life,” asserted ancient Greek philosopher Heraclitus. While we can understand this intellectually, our emotional reactions to change can be very powerful — and sometimes paralyzing.
These four strategies can help your small business remain relevant and profitable during the coronavirus pandemic.
1. Know where you stand. Examine your present business and personal financial situations, even if it is painful. This means balancing checkbooks, reviewing and updating budgets and producing year-to-date financial statements. Look at accounts receivables and evaluate the likelihood of customers paying all or part of amounts owed so you can prioritize your company’s collection activities. Review your accounts payable, rent and tax obligations.
Consider all sources of funds you could tap now without penalty that could help your business and/or household meet its financial commitments. Perhaps you can generate immediate cash by putting inventory, equipment or supplies up for sale that are no longer needed or used. If you have savings set aside, put some of this money to work.
Contact creditors and your landlord, if applicable, to discuss modifications, deferments or other types of relief that may be available. As uncomfortable as this may be, do not wait.
Explore grants and loan programs that are being offered by public or private entities to help companies negatively affected by the coronavirus pandemic. For example, $300 million in government grants were made available to Idaho small businesses impacted by COVID-19. Small businesses may apply at https://rebound.idaho.gov.
2. Use a SWOT analysis to develop strategies. As you build your business response strategy, you may want to perform a SWOT analysis. SWOT is a strategic framework companies use to conduct an internal assessment of the business (Strengths and Weaknesses) and an external assessment of the environment in which they operate (Opportunities and Threats). The process of working through the SWOT analysis can help you identify innovative ways your business can solve marketplace problems that leverage your organization’s strong suits.
3. Revisit and revise your business model. SWOT insights may reveal shifts you need to make in your current business model, so be prepared to pivot. Think through the four Ps: Product (or service), Pricing, Promotions and Place (distribution channels). Even your branding may need to be refreshed to reflect a different focus. Seek feedback from professionals such as your CPA, attorney and banker. Take the pulse of stakeholders — including board members, customers, prospects, employees and centers of influence — to understand their reactions to new ideas. Make sure you understand industry- and coronavirus-related regulations, insurance requirements and lease provisions, especially if your business activities are changing substantially.
4. Determine the details. As you create an action plan for your relaunch, prioritize tasks and group them in stages across a timeline. What resources do you have, what do you need and by when? Develop a month-by-month revenue and expense forecast showing what you think cash flow will look like for the next year with a revised business model in place.
These projections can help you decide if outside financing may be needed so you can explore funding options. Your marketing and communications efforts will be critical to your success, so be specific about the tactics and metrics you will use.
It’s not easy making business decisions during tough times. You can receive “hands-on” assistance with a SWOT analysis, business planning or financial projections in virtual, complimentary business counseling appointments at the Zions Bank Business Resource Center. Or take advantage of community resources including the Small Business Development Center, SCORE, Idaho Women’s Business Center and Trailhead.
Karen Appelgren is vice president and director of the Idaho Business Resource Center of Zions Bank, a division of Zions Bancorporation, N.A. Member FDIC. She can be reached at (208) 501-7449 or [email protected]