In the year 2020, many businesses around the world hit the rocks financially. The COVID-19 pandemic rocked the world economy, forcing businesses to close and rely on government bailouts to survive for the best part of a year. Many businesses went into liquidation, while others hung by a thread. If your small business survived 2020, you should be proud – this has been a trying time for all business owners.
Unfortunately, although the end is in sight, this crisis isn’t over yet. Businesses are continuing to struggle through coronavirus restrictions that are inhibiting their ability to turn a profit. If your business is one of them, you might be searching for a life raft right now.
While this blog won’t have all the answers, you can use it as a starting point to try and help your business out of the financial hardship.
Meet With Your Accountant
To get a full assessment of the severity of the situation, you need to meet with your accountant. An accountant can cast their professional eye over your recent financial records and give you a projection of how they think your business can survive, or if they recommend liquidation. Limited company liquidation is a complicated matter, but it can be a good last resort if your business can’t survive through the pandemic.
It is advisable to arrange to meet with your accountant sooner, rather than when things become dire. The earlier you begin to strategize your game plan for financial survival, the better your odds are as a company.
Create a Survival Plan
The next thing you need to accomplish is to create a survival plan for your business. This will involve meeting with all department heads as well as your accountant, in order to create projections for how you can stay in the black long enough to outlive the pandemic. Your survival plan should strategize the next three to five years as a business, making realistic estimations of how your business can expand its customer base while cutting back in other areas.
Make the Necessary Cuts
Unfortunately, the hard part of being a business leader is making tough decisions. Throughout the pandemic, job cuts have been rife in all industries, and indeed, you may need to make some necessary cuts to your company staff as well as expenditure.
One way to make cuts without losing staff members is to get rid of your office space, even temporarily. The pandemic has proved to us that we can work from home and continue to successfully build brands and companies; if your company can operate remotely, or even in a hybrid setting, this could save you thousands per year on space hire and other office expenses.
If your business is in a financial crisis, it’s time to take action. While this can feel crushing to any small business owner who has worked so hard to accomplish the business thus far, with the right strategies you can weather the storm and come out even stronger.