2020 saw life as we knew it turned on its head. Seemingly overnight, big things (and small things) were altered in fundamental ways. Running a business during lockdown, and now, in its aftermath, is a completely different kettle of fish compared to merely a year ago. And while the entirety of humanity can’t wait to forget about the virus and the chaos that has ensued (vaccine, we’re ready for you!), there are some pertinent Covid business lessons that we’ve learnt from operating during a global pandemic. Before we turn the proverbial page on 2020, here are seven tactics to add to your business toolbox – pandemic or none.
1. Re-examine your budget every quarter
Re-shuffling your budget along with economic trends isn’t only wise – it’s crucial. As a recession looms, now is the time to make every cent work its hardest for you. Examine your budget and reallocate funds to support your plans for the quarter. As your business grows and changes, so too will the way you spend your money.
Yoco Tip: Try to create two or three ‘versions’ of a budget. Plan for the worst case scenario, as well as the best. This way no matter what happens, you have a way to stay on track.
2. Religiously track the key indicators of your business’s health
Keeping your eye on the key health metrics of your business is vital – especially in a volatile market. Shockingly often, business owners discover that they’re bleeding cash, or are in fact, not profitable, too late after the fact. At the very least, make sure you’re tracking: revenue, direct expenses, overhead, gross profit margin, and net profit margin. This will enable you to identify trends as they emerge, take swift action to nip potential problems in the bud, or capitalise on potential opportunities.
3. Invoice swiftly
Money owed to you is useless until it’s safely in your bank account. Make sure your bank balance (and credit rating) don’t suffer due to delayed invoicing. If you’re able to, invest in cloud-based, comprehensive accounting software to automate accounting tasks – it’ll not only save you massive amounts of time, it’ll also eliminate any costly human errors.
4. Settle debts swiftly
There are few worse feelings than going to bed with the knowledge that you owe someone money. Stress aside, no one wants to do business with someone who’s renowned for dragging their feet when it’s time to pay up. Settle all debts (big and small) as soon as you’re able to, and if you’re in a tight spot and need a few days of grace, keep the lines of communication open so that the other party knows when they can expect payment.
5. Reduce unnecessary spending
There’s a reason why some of the world’s richest people are so wealthy: they’re frugal to a fault. If you haven’t yet, now’s the time to say goodbye to impulse purchases and reduce all non-essential spending. Start with the obvious: reduce the amount of cash drawn down from the business and put an end to small splurges that add up (fancy filter coffee or a weekly trip to Krispy Kreme can quickly add up).
6. Have a realistic, actionable contingency plan in place
If 2020 has taught us anything, it’s that the worst can happen. But! A global pandemic, devastating fire, or <insert equally awful fate here> doesn’t have to mean the death of your business, if you’ve got a solid contingency plan in place.This blog delves into the factors to take into consideration, and then guides you through the process of compiling one that’s tailored to your unique business.
7. Seek help sooner than later
There are no prizes for martyrdom in entrepreneurship. If you’re running into financial difficulty, seek assistance before things become dire. Operating a business is hard at the best of times; throw a global pandemic into the mix and things can get really dicey. Start by talking to your bank and debtors and see if you can renegotiate any terms of repayment. If you’re in need of financial aid, re-read this blog to see what your options are in terms of Covid-19-related financial help. If you are struggling mentally, there are a plethora of free resources at your disposal. You can find help here as a start, or research local support groups that are close to you.
While we wait with baited breath as to what 2021 has in store for us, one thing’s for sure: if you were able to ride out the incredibly bumpy ride that was 2020, your business can conquer (just about) anything.
Top tier thread. 🙏🏾 https://t.co/KQlqSzLbPf
— Hilithilwa (@BuzieAndreas) December 14, 2020
