By | Craig Middleton
The impact of COVID-19 extended beyond the health and wellness of the American public. Many businesses that were thriving and successful prior to the pandemic have been left in finanical shambles. This is common after an economic crisis, but finanical setbacks are common for businesses of all sizes for a number of reasons. Losing an important client, watching a new competitor come on the scene, or experiencing a natural disaster that destroys your building can create financial difficulties. Though difficult, it is possible to get back on solid finanical footing. Here are some ways to steer your company toward recovery.
Don’t Blow It Out of Proportion
It is easy to be swayed by public opinion or what you see in the media, but you need to leave these influences out when looking at your business. On the surface, it might appear to be devastating, but don’t just abandon hope and close down the business. Adopt a perspective that looks at setbacks as temporary. Don’t make decisions until you have looked at the numbers. This can be done easily when you have software that provides accounting for small business owners. If you have been wise with your funds, your emergency fund could be able to bail you out. If you haven’t set up a savings account for your business, there is no better time than now to get one going.
Discover the Scope of the Problem
Don’t start looking for a solution unless you know the full nature and scope of the problem. You might find that there is a single problem that needs a single, simple solution, or you may have a series of complex problems that require a more comprehensive, multi-faceted strategy. It may be easy to spout off some ideas that have worked in the past, but your best option for success is consulting with your CPA for professional advice.
Stop Living in the Past
When things look bleak, you will be tempted to look at everything you did in the past to create such a dismal financial situation. Maybe you didn’t watch your expenses closely enough. Perhaps sales projections were completely off base. You didn’t adjust your operations to match the demand. There could be a number of things impacting your current crisis, but dwelling on what mistakes were made in the past won’t fix the problem. Deal with the problems of today with the information of today. You can learn from the past, but don’t hinge your entire financial future on a timeline where you figure out what happened a few months ago.
Move the Business Forward
A financial setback isn’t something that can be swept under the rug. It can affect the morale of your employees, and it can dry up profits. Your business may stall, and you may lack the motivation and resources to innovate and adapt. A setback isn’t the time to pull back. You need your customers more than ever, so increase your marketing budget and go hard after new clients or customers. Don’t take a backseat while trying to stabilize the company finances. You have worked hard to get to where you are, and there is still time to make a change.
Correct the Mistake
With things like COVID-19, the finanical problem may not have originated with something you did. However, your lack of response to the financial challenges could keep your finances from moving forward. Adapt your strategies or operation to counterattack the source of the struggle. If the setback does stem from fiscal irresponsibility, own up to the mistake and take steps to fix it. Look at your business model and hunt down your weaknesses. Review key personnel and their functions. Is each position pulling their weight and helping the company progress? Look at your price point and value proposition. Do you need to make changes? The sooner you fix the problem, and the more completely you address it, the sooner you can restore your finances to safe ground.
As you work to get back towards financial stability, you need to keep your options for maintaining fiscal responsibility open. It may mean that your situation requires a staffing change, whether it is laying off individuals or implementing a hiring freeze. You may need to consider expansion or consolidation efforts. The more innovative you can be with your options, the greater the impact you will have on your company.
The key to keeping your finances stable is reducing expenses while increasing your revenue. This can be difficult in times of crisis, such as the pandemic, but with creative approaches, you can find a solution that helps your company rebound from a financial setback.