5 Ways to Prepare Your Business for a Post COVID-19 Future
Here are five ways to position your business for better days ahead.
Every economic downturn brings opportunity. We’ve heard this axiom before, right? In 2001, 2008, and now in the midst of a global pandemic. Given the ever-changing COVID-19 situation, it can seem hard to know what’s next for your business. But we do know it’s possible to come out stronger and smarter on the other side. Here are five ways to position your business for a brighter future.
Know your new KPIs.
KPIs, or key performance indicators, are the metrics you use to measure your business’ performance. Of course, the economic repercussions of COVID-19 have turned business as usual on its head. If you qualified for a Paycheck Protection Program (PPP) loan under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), your cash flow is likely to be all over the place. It could be even more complicated if you’re paying employees who aren’t working. What does this mean for your labor metrics? Your margins?
Needless to say, the KPIs you were tracking earlier in the year may be no longer relevant. So, which metrics should you be following? Regardless of your industry, your updated cost of sales (calculated with correct labor numbers versus inflated ones) and new break-even analysis are critical. Start with them.
Stay in touch with your customers.
Now is not the time to go AWOL on your customers. Stay in touch and let them know how you can meet their needs in this time of crisis. Keep in mind they may not have the same purchasing power they once did. If a customer is behind on receivables yet in good standing otherwise, consider reevaluating credit terms if possible.
Here’s something else to think about: Essentially, the PPP lowers your costs for the next two months. With these savings, are you able to drop your pricing for the next 60 days in a bid to attract new revenue? Aggressive customer acquisition strategies such as this one could pay off, especially if your competitors aren’t able to follow suit.
Make sure your suppliers are healthy.
A disruption in your supply chain could spell disaster for your business. Check in with your suppliers and make sure they’re prepared to weather the storm for the long haul. Know where they’re located, so you can track the situations in their regions and plan ahead for potential disruptions. If you’re in a position to pay suppliers ahead of schedule, consider asking for a discount to do so.
Communicate regularly with your employees.
If your employees are home or furloughed, be sure to check in with them each week. More than anything, it shows you care about their safety—and their ability to return to work once the economy reopens. When this time comes, having a committed workforce is sure to be a competitive advantage.
Also, it’s important to maintain close contact with your up-and-coming leaders, including younger family members who are poised to one day take the reins of your business. An economic downturn presents a valuable learning opportunity for them. Consider involving them in key decisions. Ask for their perspectives as you plan your next steps. Invite them to lead certain initiatives.
Think holistically about your business.
It may be a while before life shifts back toward normal, but it will. By paying attention to your KPIs, customers, suppliers, and employees, you can position your business to lead the way.
Start thinking about what’s next for your business. From modeling revenue scenarios to advising on PPP loan expenditures, we’re here to help. Contact your CPA at DS+B to get started.
Visit our COVID-19 Clarity Center for the latest news and resources to help your business navigate this challenging time.