The recent announcement of a national lockdown has put a lot of pressure on small businesses. It's important to prepare and not be paranoid during this period, as there are measures that you can put in place to protect your business.
Many business owners will have to choose between protecting their employees or saving their businesses because the economic fallout of the lockdown will be greater than the average business owner has prepared for.
Entrepreneur, Nick Harambous offers some tips to help small businesses stay afloat during the lockdown:
1. Assess your finances
-Keep track of your cash flow, it's always a good idea to take note of how much money is coming in and out of your business. Try to predict your runway, this is how many months the business can function until it runs out of money.
2. Cut down on luxuries
-This goes hand in hand with assessing your finances. Cutting down on luxuries means being able to use the money to cover other important expenses.
3. Try to work remotely if you can
-You'll be able to cut down on travelling expenses and other operating costs.
4. Get rid of any overheads
-This includes offices, rentals and any services or subscriptions that your credit card is automatically billing.
5. Communicate with your team and customers
-It's okay to ask for help and guidance from your team. Communicating with customers can give you ideas about how to diversify your business model to match the current climate.
6. Give your staff options
-They can work fewer hours, work fewer days, you can introduce pay cuts or a staff equity program
7. Apply for the debt relief fund launched by the Department of Small Business Development
-This is for small, micro and medium enterprises (SMMEs) earning less than R20 million per year
8. Protect your business model. Don't fully shift away from it.
- Customers should be able to identify with your business, even with the changes happening during the lockdown period
9. Diversify your business
-Identify your strengths and skills, then use these to diversify your business.
10. Have different fallback options
-If one thing doesn't work, try another plan.
The lockdown should not be seen as the end of your business, but rather a way to diversify the skills and services that your small business has to offer. Use these tips to stay ahead of the curb, as the lockdown will cause a long-term global shift in business and economics.