7 Ways To Rebuild Your Business After COVID-19
The COVID-19 outbreak has wreaked financial havoc around the globe, leaving many business owners struggling in its wake. While the short-term outlook varies greatly by industry, it’s important to consider what recovery mode will look like once the economy begins to return to a state of normal —or establishes a new normal. Having an exit strategy in place for after COVID-19 can help you be prepared to hit the ground running and rebuild. If you’re not sure what your coronavirus exit plan should include, this guide can help with getting your business back on track.
1. Assess the Financial Damage
The first step in developing a rebuilding plan for COVID-19 is determining just how deeply your small business has been affected.
There are different layers involved, starting with the hard numbers. If you haven’t updated your financial statements—such as profit and loss or cash flow statements—recently, it’s helpful to do that now. You can then compare them to last year’s numbers to see how much your business may be down. And while only a small percentage of business owners say they’ve benefited from the pandemic, so it’s possible that the damage might not be as bad as you think.
Aside from the hard numbers relating to sales, profits and cash flow, consider other ways in which your business has been affected. For example, if you’ve had to lay off some or all of your employees, you’ll need to factor that into your rebuilding plan. If you’ve cut your advertising and marketing budget down, or some of your customers have migrated toward competitors, then those are things you’ll need to account for as you identify financial resources to help you recover.
2. Take a Second Look at Your Business Plan
Your business model may have worked perfectly fine pre-COVID-19, but coming out of it may mean you have to do some fine-tuning.
Specifically, you may need to consider how your business can pivot to adjust to a new normal. For example, if you previously relied on foot traffic to a brick-and-mortar location for sales, you may need to look at a digital expansion to accommodate the higher numbers of people who are shopping from home.
Analysing how your overall industry has been affected by the coronavirus pandemic also is helpful. When looking at your competitors and the industry as a whole, pay attention to the trends and focus on finding the opportunities. Being able to find a gap or need that your business can fulfill that’s been neglected up until now could be critical to reclaiming and expanding your customer base going forward.
When going over your business plan and business model, get clear on your business’s strengths and weaknesses. Then, look at what was working before that may not work as well now and see where you can adjust or improve to remain competitive. Finally, don’t forget to revisit your business goals to make sure they’re realistic, given the current circumstances. For example, you may have set a target revenue goal for the year that will need to be scaled back now to account for the damper COVID-19 may have put on your Q2 sales.
3. Consider Whether You’ll Need Funding to Recover
Unless you had a large amount of cash on hand going into the pandemic, it’s likely that you may need some working capital to jump-start your business operations coming out of it.
When it comes to financing your small business during a COVID-19 rebuilding period, there are several options to consider. The Government has come up with a number of initiatives designed to support businesses through the crisis to minimise the effect on the economy on the other side
Under the Coronavirus Job Retention Scheme, all UK employers impacted by coronavirus will be able to access support to continue paying part of their employees’ salary. All UK businesses are eligible.
The scheme has now been extended until the end of October, with furloughed workers able to return to work part-time from August and employers asked to pay a percentage of their salaries from that point onwards.
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank (BBB), will primarily support small and medium-sized businesses in accessing bank lending and overdrafts.
This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5m. Interest payments and any lender-levied fees for businesses will be covered by the government for an initial period of up to twelve months. The government will provide lenders with a guarantee of 80 per cent on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders.
Bounce Back Loans scheme
From May, small businesses will be able to access a new fast-track finance scheme providing loans of up to £50,000. The scheme has been designed to ensure that small firms needing cash injections to keep operating can get finance in a matter of days.
Businesses will be able to borrow between £2,000 and £50,000 and can apply online through a standardised online application
Loans will be interest free for the first 12 months and 100 per cent backed by the government
Loan terms will be up to six years and no repayments will be due during the first 12 months
The scheme launched for applications on 4 May and more information on it can be found here. The government has said it will work with lenders to ensure loans delivered through the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5m, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The scheme will be delivered in partnership with the British Business Bank.
Support for businesses and individuals paying tax
The government will defer VAT payments in financial quarter running from April-June and businesses will have until the end of the tax year to repay those bills.
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc, is sufficient to make a claim.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.
Support for retail, hospitality and leisure sector
Firms in retail, leisure and hospitality sectors will now have a 12-month business rates holiday irrespective of the rateable value of the property
Support for small businesses
A £10,000 cash grant is available from Local Authorities announced for businesses in receipt of Small Business Rates Relief.
4. Revamp Your Budget to Account for New Spending
Coming out of the COVID-19 pandemic, you may have to spend money before you can make money.
For example, you may need to spend money on hiring and training new employees or rehiring ones you had to lay off. Inventory may need to be purchased, and you might have to rev up your advertising budget again to start building fresh buzz.
As part of your coronavirus recovery, you should have a clear idea of what you need to be budgeting for and what you can cut to make the most of the revenue you do have coming in. The goal is to eliminate the monetary waste and get your operating budget as lean as possible so that when the chance to invest in growth comes up, you’re able to take advantage of it.
5. Invest in your Sales Team
Your Sales and Business Development team are the secret weapon that will enable you to rebuild your business and get back on track. Having the right people in place is key to your success and you may now have the opportunity to completely revamp your team by adding new members of staff or changing everything around. If you are looking to add to your team, now is the time! The candidate market is better than ever and businesses can now engage with the very best talent without having to pay a premium.
At Kingsgate, we have seen a huge increase in bright business development candidates and fantastic graduates contacting us to secure their next role. Even if you’re not looking to recruit now, our team can look at sourcing top talent, ahead of your competitors, for when you’re ready to hire again.
6. Develop a Time Line for Rebuilding
You may have several things you need or want to do to recover following COVID-19, but doing everything at once may not be realistic. What can help is having a time line to follow that prioritises your most important actions first.
For example, your immediate goal may be securing funding for your business. Once you’ve done that, you can set a time line for rehiring employees and recruiting new staff, then restocking inventory and, finally, reopening your doors if your small business closed as a result of the pandemic.
7. Create a Contingency Plan for the Next Crisis
While the coronavirus pandemic may seem like a once-in-a-lifetime event, the reality is that an to emergency can come along to disrupt your small business at any time. Using what you’ve learned during the current pandemic to prepare for the next crisis can help you insulate your business from future shocks.
For instance, building up liquid cash savings may be a priority for your business if you had little or nothing set aside before the COVID-19 outbreak began. You may choose to focus on paying down your debt and trimming nonessential spending to keep your budget in check. Or you may need to find ways to help your staff work more efficiently to cut operating costs.
The pandemic also may have taught you a thing or two about how important it is to be able to adapt and keep your business fluid so you can reasonably weather storms. For example, if your employees didn’t have the option to work remotely before, that’s something you may want to incorporate in your business model going forward.
Kingsgate are here to support candidates, businesses and services
As the Kingsgate Group supply key workers, we are still working daily to support businesses throughout this crisis. Even if you’re not looking to hire straight away, give us a call to discuss your plans for the future.