Want to rebuild your small business in a post-COVID-19 world? Here are a few tips and tricks to help your small to mid-sized business better weather the financial crisis.
The COVID-19 (coronavirus) pandemic has created uncertainty for many small businesses globally, with quarantine measures such as social distancing and working from home creating knock-on effects for everything from supply chains to cash flow and revenue. Taking a close look at your business is the first step to building leaner operations for the short term and a stronger company long term.
Usman Iftikhar is a 2019 AMP Tomorrow Fund grant recipient and CEO of Catalysr, a start-up pre-accelerator supporting migrant and refugee entrepreneurs to launch their own businesses in Australia. He suggests some questions you could ask yourself to help strengthen your company for success in a post-COVID-19 world.
Where does my business stand right now?
According to Usman, the best way to understand where you stand in the market is to look at your core capabilities, value proposition and the fundamental elements that make your business unique.
"Operationally, it's really about asking yourself whether COVID-19 has impacted your business model or the problem that you're trying to solve,” he says. “Has it changed the context in a way that is permanent, or temporary? It's really important to distinguish that."
Working through a SWOT analysis is a good start before understanding how long it will take for your business to become tenable once again. Home in on whether you have enough cash flow or how you could improve your cash flow to cover any changes that you need to make. Don’t forget to factor in how JobKeeper and other financial support could help. Asking these questions objectively will give you the most accurate picture of where your business stands today, says Usman, and help you build a stronger business tomorrow.
How stable are my revenue streams?
There are very few times a business can unswervingly depend on revenue projections, but the coronavirus crisis has made it even more difficult to accurately predict. Usman suggests returning to the core of your business – both in terms of the products and services that you offer and also in terms of your customers’ needs.
Basic needs, such as food, health care and shelter, will continue to be essential regardless of the social or economic climate, Usman points out. As such, businesses working within food retail, pharmaceuticals or property management are likely to maintain at least some of their customers (though the amount may be reduced).
“The second question,” Usman continues, “is: 'what doesn't change?' Even when basic needs can be covered, there are some fundamentals that will not change; people want to travel – they may not be able to, but they want to travel eventually.”
This kind of thinking helps you work out the needs (and constraints) of your customers. It can help shed some light on how relevant your business is in the market and how dependable your current revenue streams are to further strengthen your business’ core capabilities.
Usman suggests asking yourself questions like: “Who are your customers?”, “Are your customers government, corporate or consumers?”, and “Is the problem that you're trying to solve for them a core need or part of their core business model?”
Focus on keeping the mission of your business intact and remove overheads that don’t immediately apply – for example, try looking for free or cheaper alternatives for marketing or social media management, temporarily. No amount of digital or social activity can satisfy your customers if your core service is compromised.
Should I pivot my business and if so, how?
A buzzword for agile businesses, a ‘pivot’ (a quick change of direction in offering, operations or general approach to your business) can be hard to master – even more so when you don’t know where to pivot. Firstly, know that there’s more than one way to pivot to help build business strength and success.
“You can pivot based on the capabilities that you already have and that's basically saying: 'who do I have on the team, what assets do we have and what can we do with those assets?'” says Usman.
If you have resources or team members that you’re under-utilising, think about new ways for them to contribute to bolster new areas of development in your business. If you have a warehouse space, try using it for excess stock or running a pop-up store. Or, if you have staff that are social media savvy, look at reassigning resources to keep it running while you scale back on outsourcing.
The second type of pivot, which is based on necessity, is about rethinking your offering to continue to fulfil your business mission with limited (or dwindling) resources. How can you deliver on your core business promises even if your supply chain is compromised? Consider ways to continue giving customers access to your services if face-to-face dealings aren’t available. Usman suggests going back to basics in order to understand new opportunities to grow your business.
“[Go] back to being entrepreneurial and ask: 'who is my customer? What is the problem that I'm solving for them?'”
Working through a more focused business plan, such as The Lean Canvas, can point you in the right direction.
What consumer behaviours have changed and how do they affect my business?
Some current trends in consumer behaviour as a result of the coronavirus pandemic are temporary but some will be permanent, such as a widespread willingness to operate online. Usman has noticed this in his own business and has adapted it to suit his more online-savvy customers.
“[Operating education online] allows us to make our program a lot more scalable, with opportunities in regional Australia,” he explains. “That online strategy could be really useful in the future.”
Work out if your business can extend its online product or services and look at strategies to help communicate with your customers and activate and inspire a larger and more engaged online consumer base.
Should I partner with other businesses to help adapt and remodel my business?
Although it might seem like a great time to share information and resources with other businesses who might also be operating with a lean mindset, Usman cautions against working with anyone who you don’t already know would fit into a support role in your business. He says one of the best ways to build a stronger business post COVID-19 is by looking at your strongest relationships to find the most suitable partners.
“The organisations and people who you want to partner with are those who you already know, trust and have a relationship with because you understand them,” he says. “Just knowing what they do well, what they don't do well – understanding that is very useful.”
What are some of the best tools to help me strengthen my business?
There are so many tools, including software and apps, available to help with collaboration, productivity and managing remote teams. In many cases, they’re free or budget-friendly for businesses. In addition to the popular Zoom, Skype for Business, Slack and Google Drive software, Usman also uses tools relevant to his education model, such as Teachable and Confluence, as well as Trello for task management. He also checks ProductHunt regularly to see what new software might be suitable for his business, to help ensure maximum productivity while maintaining an agile and lean operation.
Your super checklist for EOFY14 June 2023 | Finance 101 With the end of financial year fast approaching, now is a good time to consider how you can use superannuation to maximise your tax benefits. Read more
Key points from the 2023-24 Federal Budget10 May 2023 | Blog Find out how the 2023-24 Federal Budget proposals could affect you. Read more
How to cool down if you’re getting in a hot state with your finances02 September 2022 | Blog The 2022 AMP Financial Wellness report highlights increasing stress levels Read more
What you need to know
This information is provided by AWM Services Pty Ltd (ABN 15 139 353 496), is general in nature only and hasn’t taken your circumstances into account. Before deciding what’s right for you, it’s important to consider your particular circumstances and read the relevant product disclosure statement or terms and conditions available from AMP at amp.com.au or by calling 131 267.
This article represents the views of the author and does not necessarily reflect the views of AMP.
Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive relating to products and services provided to you. All information on this website is subject to change without notice. AWM Services is a part of AMP group.