Coming out of Covid - How Small Businesses Recover and Thrive
Small business has been rocked by the Covid-19 pandemic. But it’s time to start the recovery process. There is light at the end of the Covid-tunnel.
The statics are alarming, over 78% of small to medium-sized enterprises (SMEs) in Australia have reported a decline in revenue due to the Covid-19 pandemic. An alarming 72% of business owners are now concerned about the survival of their business. With the vaccinated on the rise and the Federal and State Governments planning the roadmap out of Covid restrictions, the light at the end of the Covid tunnel is drawing closer.
After the overwhelming experience businesses have been through, we need to ask ourselves–how do we THRIVE instead of simply SURVIVING Covid-19’s aftermath?
Review, Reboot and Adapt
Most businesses have spent the last months in survival mode—being reactive to the crisis, the restrictions, and the decline in revenue. Well, now is the time to turn your attention to recovery—be pro-active by planning for life after Covid (and living with it). At Pacific Accounting, we suggest a three-phase planning strategy – Review, Reboot and Adapt.
It is important to reflect on the past 18months. Ask yourself questions that will help you move forward:
- What have you learned during the pandemic? In what areas were you successful?
- Did your systems and processes stand-up in the changing environment?
- What were your competitors doing? What worked for them?
- Are there gaps in your workforce? Is there flexibility in your team?
- Has your market changed or your customers expectations?
- What’s your current position? Do you have a good understanding of your liabilities, liquidity, and your working capital?
Answering questions like these will start to give you an idea of your current position. What has worked for you? What can be used moving forward? What can you learn from your mistakes?
Remember to set a comprehensive approach in reviewing your business. It’s easy to just focus on sales or your customers, but by reviewing all areas of the business, you will get a holistic overview of your position, enabling a multi-faceted approach to planning for the future. Focus your attention on:
- Customers and Sales
- Cashflow and Finances
- Systems and Processes
Once you have given your business an honest assessment of the time during the pandemic crisis, you can then move to the planning phase—how to reboot your business in this “new normal”?
Once you are armed with the information from your review, it is time to reboot. But you don’t want to reboot with the same “program” you were working with. Now is the time for strategic planning—plan for multiple scenarios as the future is still uncertain.
We all know that the pandemic won’t end overnight, strategic planning should consider a future that needs to be crisis-proof. Let’s be honest, there are many unknowns that can affect your business, not just Covid-19. By rebooting with a carefully considered plan in place, you can help protect your business against future Covid outbreaks, natural disasters, loss of senior management, cyber-attack, and anything else this crazy world throws at you.
Pacific Accounting recommends identifying immediate actions you can take now to set your plans in motion—how you can kick start your business in this new environment and the steps needed to crisis-proof your future.
A Budget is a good place to start. Erratic trading and government support payments make it difficult to really understand the financials of the last two years, and we certainly don’t want to use those figures to plan for the future! Talk to your VCFOs about creating a budget, it is important you monitor your budget against actuals. Use your budget as a tool to stay on track, to understand your financial health and to have confidence in your decisions and planning.
Again, ask yourself questions about the direction you need to take. Identify problem areas that can be solved before they happen:
- What ways can I now connect with customers, old and new? Think networking and social media
- How is my workforce structured? Look at capacity, capability, and cost
- Are my suppliers giving me what I need? It’s time to negotiate cost and terms; look at automation and infrastructure
- Do I have a budget, cash-flow management, and good financial advice? You need to understand your current circumstances and have the right information to make sound business decisions.
- Do you have the right systems and processes in place? Can you digitally enable your business? Can your business run without your daily input?
- How has your workplace changed? Do you need a physical address, or can you be a remote workplace? What are the Public Health requirements and your legal and compliance obligations?
The Reboot step is all about getting back into business, being pro-active and setting out clear goals with a plan to achieve them. Pacific Accounting is here to help with Budgets, Cashflows and advice from our VCFO team.
Once you are up and running, don’t rest on your laurels. You want to safeguard your business against future uncertainty. Constant “review and reboot” is important to achieve this. If things aren’t working, it’s time for the third phase, Adapt.
Review and Reboot to gain insight on how you are tracking and to seize opportunities you may be missing. Prioritise actions and build a strategic plan for resilience in the future.
“Pivot” was a key strategy during the pandemic and the successful business out there did this quickly. Has Covid-19 revealed new opportunities for your business? Can you optimise your current infrastructure to scale your customer base, revenue, opportunities with minimal additional costs? How can you “pivot” in a crisis? These are the questions you need to ask yourself to achieve your goals.
Adapt is about long-term planning whilst keeping your finger on the pulse of your business. Having current financial reports and information will allow you to be proactive in making business decisions. Having a good bookkeeping service to keep you up-to-date and an accountant to support you through these uncertain times is a key to success.
Our team at Pacific Accounting is here to assist you. We can help you Review, Reboot and Adapt—not only survive the Covid-19 crisis, but to thrive in its aftermath and safeguard your business into the future. You can book a free VCFO consultation or just call us at 1800-1800-98 so we can serve you better.