Can businesses now look to the future?
Keeping a business afloat, especially during a pandemic, is incredibly challenging—something that many entrepreneurs found during 2020/2021. Due to difficult economic times, various small businesses faced huge setbacks, with many on the verge of closure.
Few people would have predicted the pandemic would have lasted so long; despite the dark times we’ve experienced, there now looks to be light at the end of the tunnel. Some restrictions have been lifted, which has seen many entrepreneurs scramble to take back control of their business.
Finances appear to be stabilising for many enterprises, due to positivity around the UK economy, the various extensions to the furlough scheme, and bounce-back loans. Businesses running at limited capacity can open fully, and they can now plan how to recoup their losses. Despite this outlook, however, a report suggests that more than 900,000 businesses in the UK could still fail in the second quarter of 2021.
Businesses need to draw up a detailed business plan to avoid further losses. That said, how do they move forward with their business when some situations are still not 100% back to normal or wholly favourable?
Ensure a constant flow of cash
Cash is the ultimate weapon when it comes to maintaining operations; business owners should therefore ensure their company has enough cash—particularly in a period of crisis. If streamlining doesn’t achieve this, or there’s not a consistent sales supply, look into diversifying or explore sources of finance. However, be sensible when lending; extra debt will add more pressure to your business. It’s a fine line.
Leasing can provide a solution to businesses that are finding it difficult to meet a continuous level of sales. If you have tools, machinery or equipment that’s laying idle for some portion of the time, consider leasing or renting it to other businesses for short periods, at least until things pick up for you. This can give you a regular income stream whilst ensuring you maintain ownership of the equipment. This can prove a great short-term solution for both parties.
Selling your property and renting it back
If you’re looking to raise instant capital, consider selling your property and renting it back. A number of businesses have realised, following the change in working practices during the pandemic, that they don’t need as large a base/headquarters now that remote working has proved its worth. If you own an office building, you could sell it to a private firm and rent only the space you need as a tenant.
Plan and allocate your resources effectively
To meet your company’s objectives and to achieve your goals, a great plan and effective allocation of your resources is critical. Identify your business’s strengths and be clear on how you will navigate the period after the pandemic—a time where there will likely be opportunities and room for growth, but where elements of uncertainty still exist.
For example, if you’ve given a certain target to a particular unit or department, ensure it has enough staff, supplies, equipment and resources to achieve it, otherwise it will be doomed to fail from the start—which could prove a far more costly mistake. It’s a general rule of business: you must speculate to accumulate in almost every opportunity or transaction. Though it may feel abhorrent to spend money after coming through such a damning crisis, your business will remain stagnant if you don’t. That’s not to say you should throw money away…just spend it wisely, where you can be confident of a decent return in a reasonable amount of time.
Don’t compromise on quality
On a similar note, in a time of crisis, even if you’re finding it tough, never compromise on quality to keep a handle on cost. Instead, reduce your business expenses by finding a less expensive supplier, outsourcing tasks, and eliminating unprofitable clients.
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