It’s apparent how the COVID-19 crisis has financially crippled different businesses across various industries. While most companies temporarily shut down and reopened this year, some small and medium-sized enterprises (SMEs) had closed for good.
It’s good if your small business has managed to survive and reopen this year. Either it falls under a thriving industry in the pandemic, or you must have done something good. Know, however, that there are ways you can keep your small business financially secure amid a crisis.
It’s just a matter of having conscious efforts and taking deliberate actions in managing your business finances. As such, strategic financial management is the key. That said, here’s how to maintain the financial health of your small business during this pandemic:
1. Create business value by launching new products or services
Amid the COVID-19 crisis, it’s just a question of whether or not consumers need your business. This idea separates surviving companies from those that have shut down permanently. It’s good if your small business belongs to one of the flourishing sectors during the pandemic, such as the cleaning, delivery, home construction, and landscaping industries. If not, consider creating business value by reinventing or launching new products or services. However, these goods or offers must cater to the current needs of your target consumers. That way, you can continue to make money amid the crisis.
2. Cut down your expenditures
It’s common for businesses to track and assess their cash flow—what goes in and out of their business funds. The ultimate goal is to ensure their profits, which means they earn more than they spend. As such, you must weigh your income over your expenditure. In times of a crisis like the COVID-19 pandemic, check your regular income and see if you cut down expenses. For instance, consider utilizing an e-commerce platform as you close your physical store. By doing so, you can cut down on your property rental and utility bills.
3. Have digital transformation
It’s no secret how the COVID-19 pandemic has affected many brick-and-mortar stores. But surprisingly, some businesses have transitioned into click-and-mortar businesses while a few others have ventured into e-commerce platforms. As such, digital transformation is the key to ensuring your business remains operational and profitable. You can even resort to digital marketing strategies to promote your small business and sell your products or services. These strategies include search engine optimization (SEO), pay-per-click (PPC) advertising, email marketing, content creation, and social media management. Lastly, you can invest in digital tools and technologies to grow your small business. These include automation, artificial intelligence (AI), robotics, accounting software, and customer relationship management (CRM) tools.
4. Ensure proper accounting and bookkeeping
Businesses of all sizes must ensure proper accounting and bookkeeping. While bookkeeping entails recording all your financial transactions, accounting goes beyond that. The accounting process involves tracking, monitoring, analyzing, and reporting business transactions. Typically, entrepreneurs base their business decisions on their financial reports. The ultimate goal is to maintain the financial health of their business. If you’re looking to grow your small business, set proper bookkeeping and accounting in place.
5. Hire a professional accountant
It’s easy for small business owners to manage their own finances. They refuse to hire professional accountants, thinking they can add up to the expenses. They fail to realize how certified public accountants (CPAs) can help manage their finances. They can even go as far as helping your small business grow and expand, especially during a crisis such as the pandemic. As such, consider hiring a professional accountant for your small business. Your hired professional can help manage your finances properly.
6. Get business insurance for financial protection
Insurance exists for some good reason. Its ultimate purpose is to provide financial protection. But it isn’t only individuals who need insurance; even businesses need this particularly. Let’s take the COVID-19 crisis, for instance. In difficult situations like this, enterprises should have the financial security to get by. Also, it’s best to get high-risk driver insurance if you’re a driver at risk for road accidents, providing delivery services. Ultimately, obtaining business insurance can help your small business navigate difficult times.
At this point, you now know what it takes to maintain the financial health of your small business during this pandemic. Be sure to consider the financial tips recommended above, from creating business value to getting business insurance for protection. With all these in place, you’ll be able to keep your small business financially secure amid the crisis. Ultimately, you can ensure your business growth and overall success!