Standing out from the competition is a challenge that all businesses have to regularly wrestle with, but the current COVID-19 situation taking over every inch of our lives means that it is more important than ever to emerge as the leader of what you do.
According to a recent study, eight out of 10 companies fail within their first year. Now, there are numerous reasons that attribute to business failure and of course, there is no one size fits all solution, but there are things that all entrepreneurs can do to ensure that they stand the best chance at succeeding, even during unprecedented times like the one we are in.
Whilst the list of what businesses do wrong is rather extensive, there are some main culprits. Leadership failures, bad planning, a lack of capital and no differentiation are some of the biggest challenges that businesses face, especially developing SME’s.
You may have stumbled across this post because your business is seeking advice on how to survive the growing pandemic, or perhaps those cash flow forecasts you have so diligently put together following the downturn in demand have helped you predict huge issues ahead.
The team at Nucleus Commercial Finance have put together a few tips for key decision makers to follow during the crisis.
1. Find the Right Funding Solution
Everyone knows that no business will succeed without the right funding in place and this could not be more true as we move through the damage to the economy caused by COVID-19. Having capital to play with is vital as businesses can and will come across unexpected financial hurdles. However, there are various avenues that you can explore to access the funding you require.
Sometimes, cash flow can become a little strained and with a drop in demand, as well as supply chain issues to deal with, the inflow of cash into your business might not be what it was just a mere few weeks ago. But don't despair, as there are options out there for your business.
You might be able to secure additional funding for your business through the Coronavirus Business Interruption Loan Scheme (CBILS). There are also cash grants being given to small businesses on behalf of the government and statutory sick pay refunds for businesses that have had to pay sick leave for employees absent from work due to Coronavirus.
If your business does not meet the criteria to access government support, try not to worry as there are plenty of products out there which can assist your company with its cash flow woes. If the banks can't help, lenders in the alternative funding sector might, so it is worth doing your research to see what business loan your SME can access. There are numerous products that exist specifically to help SMEs with their funding needs and these have been tailored to provide the necessary solutions for all kinds of scenarios.
From hassle-free commercial loans like cash flow finance, to asset based funding such as invoice finance, there are options out there for every type of business.
2. Focus Your Efforts on Becoming Better Marketers
Marketing is a great way to push your business forward and if you are dealing with a fall in demand for your products or services, now is the time to drive your marketing efforts. Investing in marketing can give your business an edge and help you to start carving out your niche within your market in a consistent and strategic way. It is no big secret or hidden industry gem – every great business in the world has an amazing marketing team behind them and even if you don't have the financial capacity to hire a team of marketers, there is nothing stopping you from taking on the role of head marketer for your company instead.
Staying in touch with your customers is essential if you are to keep your business doors open after the pandemic is finally over. Focusing your efforts into understanding what your customers want – and need, should be at the top of any business owner’s priority list.
We understand that taking the time to have a face-to-face chat with every customer to get feedback is just not possible currently, but it does not need to be the reason your business doesn't seek feedback from its customers either.
Instead, invest a little money into one or two of the marketing software options out there and see if there is anything your business can do to improve its offering during a crisis like this.
Email marketing is one of the most inexpensive ways to reach your audience, with MailChimp and Campaign Monitor being strong contenders. All it takes is a few hours, a subscription charge and a commitment to improving what you do for your target market.
3. Reduce Costs Where Possible
Scaling down a business is never a comfortable process but sometimes it is a necessity. No business saw this coming, so that might mean turning to a solution that would not have otherwise been a viable option before. Sometimes, you may have no other choice than to reduce costs by downsizing the business.
A good place to start is by evaluating the needs of the business and identifying areas where you can pull back financially or streamline costs. That may mean moving location into a smaller office or even instructing your entire workforce to continue working remotely for the foreseeable even after the outbreak is over, which will prove less difficult now that your business has had to implement flexible working due to the pandemic.
Selling unused equipment in an attempt to raise more working capital is another great avenue to explore. A lot of businesses find that reviewing all assets could highlight some obvious opportunities to raise much needed cash and if your business is not keen to sell its stock or machinery, it can instead use its assets to access higher amounts of funding by securing the money against its inventory.
Whilst reducing staff costs is usually a recommended way to raise extra capital, the government have rolled out its Coronavirus Job Retention Scheme in a bid to help support businesses retain their employees and as part of that scheme, the government will cover 80% of wage costs for all UK businesses.
4. Remain In The Loop at All Times
For a lot of businesses, especially SMEs, the reality in the beginning is that it is a one-man band. But as things start to look more positive, entrepreneurs must grow and welcome others on board. This is an important part of scaling up, as learning to delegate where necessary is vital for the continuation of all businesses, especially right now. It does not matter how exceptionally good a single person is, a hugely successful business cannot run with just one individual doing everything and this point is especially important in the here and now.
However, this is where the problem lies. Whilst it is important to delegate different duties of the business where possible, business owners still need to remain in the loop at all times, so you can avoid dropping the ball. One of the hardest parts of being an entrepreneur is successfully keeping numerous plates spinning at once, and a common hurdle that many fall at is becoming remiss when the business needs them the most. Right now, your business, employees and customers need you, so do your best to keep your business head on during office hours, even when the daily briefings all seem a little too overwhelming.
For more SME advice regarding the Coronavirus situation, take a look at the additional resources on our Coronavirus Hub.
1 April, 2020