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safety when shopping Re-organize your work processes to prioritize key functions (e.g., by redefin- ing customer support) Establish contingency plans for further lockdowns and pandemic restrictions If you are self-employed or a small busi- ness owner, you could also take out a per- sonal loan to keep your business's cash flow steady as you adjust your business models.
3
Rethink your financial structure
A 2020 study on 5,800 small businesses from the U.S. found that the average brand with over $10,000 in expenses only had ac- cess to two weeks of cash at the start of the pandemic. Unsurprisingly, many of these companies had to adapt their spending habits to survive. And the rest of us should learn from them. To keep your brand alive during the pandemic, you will need to establish an emergency fund to cover any unexpected events (like lockdowns). You can build an emergency fund by saving the money you would have spent on unnecessary expenses. To identify unnecessary expenses, sort your expenses into two key categories: Value-adding expenses that are crucial to running the business (i.e., expenses like supplier costs, inventory acquisition costs, online advertising, staffwages and technology costs) Extra expenses that are not crucial to running the business (i.e., additional icespace,extraprofessionaltraining and food/drinks) Once you have sorted your expenses, identify expenses you can eliminate to re- duce your operating budget and make cuts according to your priorities.
4
Retrain your workforce
While it may seem wise to fire non-es- sential staffand redirect their salaries into your emergency fund, this decision may hurt your business financially long term. Currently, it costs $4,425 to hire the average employee and weeks to train and acclimate them. To avoid incurring this cost later, re- train your workforce and adjust their duties to match your new business model. You should also consider ways to improve your employee's productivity (the quantity oftheirwork) and iciency(thequality of their work). Improving productivity and iciencywillincreaseyourbusiness'sout- put, increasing your revenue and decreasing your expenses. Toimproveiciency,youcan useapro- ductivity formula and calculate your current igures: Productivity = Total Output / Total Input iciency=(Standard HoursSpentOn Task / Actual Amount of Time Spent on Task) x 100 Then, brainstorm business-specific ways toimproveproductivityand iciency.
5
Build meaningful relationships
Finally, you should prioritize maintaining good relationships with your customers. As research shows that the top 10 percent of customers spend three times more per transaction than the bottom 10 percent, maintaining a relationship with loyal cus- tomers will increase your revenue. To maintain a connection with customers, you could: Set up social media accounts and encourage customers to send you Us- er-Generated Content (UGC) Establish a customer loyalty program to keep customers happy Improve your email marketing Send digital 'thank-you' cards to custom- ers Offer special discounts to loyal custom- ers Improve your digital customer service practices Convey your COVID-19 safety measures to customers with a poster
A 2020 study on
5,800
small businesses from the U.S. found that the average brand with over
$10,000
in expenses only had access to two weeks of cash at the start of the pandemic. Unsurprisingly, many of these companies had to adapt their spending habits to survive." New normal, business
Periods of economic downturn are very stressful for companies, but they frequent- ly result in long-term growth and new industry-wide trends. For example, people often credit the fast rise of eCommerce to the 2003 SARS outbreak in China or the rise in click-and-collect to the early months of COVID-19. If you follow the tips in this guide, your company can emerge from COVID-19 stron- ger and more profitable than ever before.
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