It is very common for small business owners to talk about how they would love to have some time to work “on their business” and not “in their business”.
Although lockdowns can be frustrating and result in a large number of financial challenges, small business owners should aspire to use the time spent in lockdown to develop a plan on how they can grow their business and make it better and more efficient.
It is unavoidable to be totally free from the worry of paying for your fixed costs and juggling staff while you’re being forced to close. Added with the fact that it can be difficult to know how long a lockdown will last for, therefore no certainty exists as to when we will be legally able to operate your business again. However, we all know that life will return to normal at some point, and when it does, it is important to be prepared to hit the ground running and come out the other side of lockdown more successful than ever before. Use the disappointment of lockdown to motivate you.
The 2020 lockdown and the economic boom that preceded it has every chance of occurring once again. Despite not being propped up by the same level of stimulus as last time, there will be pent-up demand for goods and services, in addition to the expected lockdown ending in the lead-up to summer and the Christmas trading period.
As prices of property continue to rise faster in Australia in any other country in the world, consumers will be prepared to spend. So, be confident that when life returns to normal, you will have the potential to claw back the lost trade from lockdown, and if you play your cards right and plan ahead, you can actually thrive at the other end.
Past lockdowns generated a number of examples of how adaptable modern-day business can be. A great and obvious example is the shift to working from home. This wasn’t just a logistical shift in how people work, it was a mind shift for employers who may not have agreed with the principle of entrusting employees to work without the watchful eye of a boss.
More impressive than this change in the frequency of people working from home was the innovation and spirit that many small business owners showed when they faced adversity. It showed resilience and grit. Let’s hope that the same examples shine through in this lockdown.
Here are some tips for small business owners who are wanting to remain productive during lockdown.
• Prepare a business plan or revise your original one
• Prepare a marketing plan
• Get your bookkeeping and tax returns up to date
• Research your market and explore new opportunities for growth
• Experiment and research new technology for your business that may bring efficiencies to your operations
• Have your wills and succession plans prepared
• Check that your personal and business insurances are current and that you are adequately covered
• Do a health check on your loans. Call the bank and enquire if they can better your interest rate. Banks prey on complacency, so it’s always worthwhile asking the question and make it clear you plan to shop around
Building Business Resilience in The Age of Covid-19
For businesses wanting to come out the other side of this pandemic in a strong position it is essential for businesses to build resilience by being flexible in the way they sell their products to customers.
Craig Dangar from C&D Restructure & Taxation Advisory says that “many businesses have achieved resilience through covid, lots have expanded their business offering but there is still more to do. We are finding that businesses that have embraced technology are thriving whereas staying stagnant has resulted in a lot of businesses failing” says Mr. Dangar.
When clothing stores shut their doors during the lockdown they were forced to improve their online clothing store in order to continue selling their products. Libraries had to offer home delivery services by dropping books off at their customers doorsteps. Restaurants who were unable to have customers dine in on their premises were forced to sell items such as; milk and bread to customers at a similar price offered by the supermarkets.
All of these examples listed above highlight the numerous changes Australian businesses had to make in order to remain financially viable during the peak of the covid-19 pandemic. Moving forward, to ensure a successful and prosperous 2021 there are number of initiatives Australian businesses should consider adapting into their business model.
Craig Dangar contends that “Covid is not simply going away, businesses need to have a fundamental communication ability and be consistent with it, the social media platforms are cost effective and efficient and smart businesses are now using these to get to word out. Marketing is key and communication is important, small businesses need to keep letting their customers know they are there and still trading”.
It is recommended that businesses undertake a strategic review of their existing operating model, with an aim to innovate and build a plan for the recovery phase. It would also be wise to re-assess commercial agreements and be prepared to re-negotiate for terms that minimise risk.
“In our experience a lot of businesses did not understand their costs and financial obligations during covid, there has been a lack of cost control and businesses have been seeing profitability (with Government support) as things are okay, there has been a lack of hard financial discussions. Cost analysis and rationalisation, it is the key, the only key and something that has been often overlooked” says Craig Dangar.
Lockdowns have restricted the movement between suppliers and customers. As a consequence of this it is important to determine what aspects of your businesses products or services need to be temporarily halted. By doing this it is essential to re-evaluate how these products can be re-distributed to customers in a manner that is suitable for the societal conditions of the current covid-19 pandemic.