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Keeping Your Business Afloat

It has been announced that there is going to be a staggered easing of the lockdown restrictions in the weeks ahead. There will be various levels of lockdown for different areas, and though things will improve there will be restrictions in the months ahead. Things will not quickly return to normal. In fact, there have been warnings of a return to full lockdown if restrictions are not respected.

This means that your regular clients will not be spending like they did in the past.  It also means that you will not be able to simply open your office doors and have your full staff return to work as normal.

How can you deal with reduced income, and balance that with your staff who are looking to you for support?  How can you keep your business afloat in the tricky months ahead?

The Lockdown’s Impact

It is obvious that the lockdown has created a huge gap in income for most businesses.  One they had not planned for and another that few were prepared to cope with.  This will impact on you and your clients in various ways.

Your reserves are gone, so you are now vulnerable. This means that you have to act accordingly, cut any unnecessary spending, and no more waste!

Suppliers will want money upfront and you won’t have it so, start discussions options with them now. Can you take items on consignment? Can you take a smaller amount of stock to start with, and build up to past levels? Do you need to apply for government help to get back on your feet?

Your clients will not have cash flow either, and may want to buy on credit.  Remember that you have to register with the National Credit Regulator (NCR) as a credit provider if you begin to offer loans or sell items or services on credit. This involves filling in regular reports.  Failure to do so could see you getting a big fine or worse.  Your clients are able to go to professional credit providers if they need credit, nonetheless, be sure to discuss options with them in an effort to retain their business.

Caring For Your Staff

You no doubt feel obligated to your hard working staff members who have worked for you for many years and who really keep your business running.  If possible and practical, it is good to attempt to care for their needs as long as it will not bankrupt your business.

Take advantage of government aid where applicable. Help your staff or former staff with claims against UIF.

Rather than offer loans (credit) to workers, refer them to qualified companies that do this. This is not something you do, so rather leave it to the professionals.

Rather than just firing many workers (last in first out) consider reduced pay for all workers.  Letting too many people go, will reduce your ability to successfully run your business. This could cost you customers, destroy your reputation and ultimately cost you your business.

Rather than lay off one worker, consider if two of the workers would be willing (for some time) to split the work and income.  This sort of ‘workshare’ arrangement has proven to be a temporary stop-gap which provides both workers with some funds rather than none.  In some places, workers have rather asked to be let go, so that they can claim UIF, but in the months ahead, the job market going to be tougher than ever, and finding a new job could prove to be nearly impossible.

 

Protect Your Staffs and your Own Health

When times are tough, there is an urge to cut corners wherever you can, to save bucks.  If you do this at the cost of protecting your staff’s wellbeing, you are quickly going to find your business unable to operate due to infections among your team.  This will mean a huge interruption again, which could see your business go under.

Be sure to appoint a person in the office to monitor your Covid-19 precautions and practices. Empower them, give them the resources they need to protect you and your team.

If you work for someone else, be sure to take good care of your health so that you are not responsible for getting the business shut down if you get sick due to carelessness.

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Make The Tough Call

Doctors often have to make tough decisions, like to amputate a patient’s limb in an effort to save their life.  Economically the lockdown has been such a measure. It has caused untold financial harm in an effort to prepare and prevent future loss of life. Are you ready to make the tough call for your business?

‘Doctors often have to make tough decisions, like to amputate a patient’s limb in an effort to save their life’

What big changes or cuts can you make now, which could help you stay afloat when the economic fallout begins? Have you been thinking of moving out of your expensive offices to save on overheads? Do it! Have you been thinking of reducing your staff numbers (if it is needed to save the company)? Then do so now.

Get Smart

Do some of your services or products bring in most of your money?  You may find that the 80/20 principle applies in this regard where a small number of products and services are actually bringing in the majority of your earnings.  Could you rather focus on these profitable products and services? You may be able to reduce the amount of staff or work hours required to maintain the other less profitable offerings. Carrying stock of the other items could be cut back, for now, to allow you to focus on the lucrative items.

With the world in chaos due to the pandemic, it is time to rethink your supply chain. Government is urging people to ‘buy local’ and this may be more feasible in the near future due to interruptions in imports.  You may also be able to find competitive prices or faster supply in the short term.

Know your break-even points and rates, and consider this as your base price rather than your past figures.  Rather do some work for some money, at break-even, than little work at old profit margins. Relook at your pricing.

 

Learn from the Lockdown

Has your team been able to operate mostly remotely during the lockdown? Could this be part of your future strategy?  This may be necessary anyway with the ongoing pandemic, especially for those staff members most at risk.  Could this mean that you could lower your office rental costs in the near future?

‘Ironically, team morale might have never been as high as when you are not all working in the same office space’

Team building and monitoring staff performance was probably never more on your mind than during the lockdown. Ironically, team morale might have never been as high as when you are not all working in the same office space.

It is a good idea to continue monitoring these things once the lockdown is over. This will help to keep your team focused, enthusiastic and ensure that you have the right people performing the right jobs.

 

 

Keep Your Business Afloat

In rough waters, with waves washing into a boat, you have to batten down the hatches (stop water leaking in) and you may even have to get rid of extra weight to stay afloat. The same may be true in the weeks ahead if you want to successfully navigate the stormy waters of Covid-19.

Never has it been more important to know your figures, understand your clients and profit margins. Make the cuts where it is needed, assist your staff and colleagues where possible, give your clients the best service they have ever had, and you may just be able to survive the tsunami ahead.