7 Strategies When Nothing Works for Your Small Business
Whether there is a pandemic or not, small companies generally suffer after their inception. The adversity is the crucial time to scrutinise underpinnings of your business. With the current pandemic, the market situation worsens as the time passes by. It is still uncertain as to when the market will resume normally and businesses will run smoothly like before the epidemic.
The previous financial crisis that held in 2008 showed internal loopholes in financial markets while the current economic slump showed problems emerging in the external environment. This, in turn, shows that the businesses have to revive quickly once the epidemic ends.
If you have a small company which is not a bit old and has not marked its space in the market, then it’s the right time to comprehend what changes your company can regulate and what not. Here is a list of ways for small businesses to survive a pandemic, reduce burn rate, and surge liquidity.
1. Observe and Reduce Subscriptions
While cutting the expenses, companies have to ascertain the number of subscriptions that they have taken. Out of these online subscriptions, they have to narrow down important ones and unsubscribe websites and reports that are not so important.
If there is any option available to unsubscribe then a company can directly talk to the organisation whose reports it has subscribed. Renegotiation can be possible seeing the current crisis.
2. Renegotiate with Vendors
It's the time to reach vendors and negotiate contracts as well as reduce cost of essential supplies. On the grounds of renegotiation, small companies can propose a long-term contract if the vendor agrees to renegotiate.
Such a deal is good for small companies rather than breaking contracts with vendors abruptly. Both the parties understand each other's problems and thus, come to a mutual agreement.
3. Sell Your Invoice
During the crisis, it becomes difficult for small companies to recover money. Debtors are mostly unwilling to disburse full payment at once. Meanwhile, companies have to pay off their expenses irrespective of whether revenue is generated or not.
In that case, they can sell their invoice at a discount so as to raise money. For instance, if a customer owes INR 75,000 but is unable to pay off the bill, then the company can sell its invoice at a discount of INR 65,000 and raise money instantly. In this way, it gets money at a marginal loss and simultaneously, has liquid cash to run the business.
4. Give Discounts to Customers
The economic slump has hit almost every business in the economy. Even, big brands have registered plummeted sales in the last couple of months. So, it is not a new difficulty for small companies, they can deal with it by offering discounts to the customers.
Discounts are a way to lure customers toward the produce and increase overall sales.
5. Create New Demands
When the epidemic happened, a sudden shift in customers' preferences was witnessed. Consumers that are considered one of the assets of the small business were reluctant to buy new things. They were retaining essential commodities only. As a result, markets had turned depressed.
In such a scenario, it is crucial for companies to pivot the business and apprehend customers’ behaviour. They need to create new products as per the customers’ demands.
6. Create New Strategies
To run the business further, an entrepreneur has to create new strategies. For this, he can start a brainstorm session and require employees to come up with new ideas.
Each employee should be asked to submit ideas individually and also, support his ideas with samples. Thus, new strategies can be created through the entire company's perspective rather than the entrepreneur's viewpoint.
7. Use Government-led Concessions
In order to deal with the pandemic, the government is offering financial aid to the MSMEs. Emergency Credit Line Guarantee Scheme is one such program started to help the MSME. Under this program, the companies can start their business by taking loans from banks if they are existing borrowers.
Similarly, various other plans have been introduced to help out the small businesses. After due consideration, a company should apply for the concession.
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