If your business is struggling with debt, rest assured you’re not alone—statistics show that, in 2020, 79% of small or medium-sized businesses had loans outstanding. There’s no doubt the pandemic has put a strain on small businesses—luckily, there are plenty of tried and trusted methods to mitigate loss, improve revenue, and clear your balance. Here are some of our own.
Many of the strategies used to recover from financial debt are about simple organization. If you can create an airtight budget that incorporates earnings, expenses, and outlines the conditions to mitigate further damage, then you’ll already have set the precedent for recovery. To build reliable reports, you’ll first need to collate all evidence of outgoings including utility bills, software subscriptions, and insurance contracts (and don’t forget to evaluate these against your bank statements). If you haven’t reviewed these since before the pandemic, you may find you have outlays (such as office costs) that are no longer relevant. Understanding how and where your business is leaking is the first step towards later plugging the gaps.
Once you have a clear overview of your company’s finances, the next step is to address the pain points by reducing expenses. With the pressures of COVID—reduced foot traffic and lockdown impediments—you’ll have to adjust your business accordingly. This means adapting your business practices to be more cost-efficient; for example, moving things into the digital space to save on physical costs. You should also aim to review office contracts, supplies, or utilities and negotiate with your existing providers for lower rates. Many will be willing to compromise if it means keeping a customer’s business.
The main expense for almost any business is payroll. If you’re struggling to keep the company afloat, it may be time to review the necessity of some personnel. Beyond your staff’s salaries and fiscal value to the company, it’s also important to think about intangibles. Sometimes, when the business is struggling (and the world is reeling from a virus), the people you want on board are not the high-performers but the ones who keep morale high and inspire confidence amongst their peers—in other words, the ones who “buy-in” to your company’s direction.
One clever way to reduce expenses is to transition your operations online. Remote work cuts down on overhead expenses, and using virtual assistants can free up funds and resources to be better used elsewhere. Remote and online operations have to contend with the potential for cyber attacks, however, but there are affordable solutions available to prevent costly ransomware lockouts and downtime.
Recognizing and mitigating losses is important but it won’t mean a thing if you can’t increase company revenue. In order to survive and recover from inordinate debt, you’ll have to find a way to improve profits. Doing so, however, is often easier said than done, and you’ll need to show some resourcefulness, creativity, and put in the graft if you want to earn new business.
If you have ideas for new products, don’t let a debt crisis or a pandemic hold you back in pursuing them—a diversification of your product range could lead to increased revenue. Even though things at work are pressurized, it’s vital that you keep things moving forward. You may also find that COVID has provided new opportunities for remote services, you can try to target newly digital, previously analog businesses, for example.
When it comes to the COVID-19 pandemic, the business world is asymmetrically balanced—if things were hard before, they’re likely to be even harder now. But, if you’re willing to adapt, you might be able to turn the circumstance on its head, and if you get yourself into the hole, you can climb your way out.
Life of Automation isn’t only about the virtual workspace but about establishing the correct relationship between you and your assistant. In doing so, we can increase the efficiency and productivity of all hardworking individuals. The ripple effect we hope to cause by helping those who look to help the world is what excites us the most. Contact us today to learn more!
Written by: Carleen Moore