How to Keep Your Business Afloat in Difficult Times, By Talisman Casualty
by Arina Smith Business Development 02 September 2020
The future may look bleak for small business owners who are seeing their sales and profits plummet during the pandemic. What can you do to make your business survive in a tempestuous economic time?
Strategies for survival take many forms, but for any business to survive, whether it’s an online business or a traditional brick-and-mortar business, entrepreneurs need to focus on their most important resource: clients. Here are some clever strategies to help you survive difficult times:
Keep Hold of Your Existing Customers:
Don’t cut your business expenses so much that you can’t serve your existing customers any longer. Instead, let them know why they preferred your business over others in the first place.
If the reason why you were chosen over your competition is that you’re the most cost-effective, reassure your consumers that during the slump, your cheap costs are much more relevant. If you provide a premium or excellent customer service, note the outstanding value you give to your consumers – and that price may not be the most significant consideration in deciding the overall cost of ownership.
Defer Capital Investments:
Unless you can quickly recoup your investment and make profits, try as much as possible to delay any capital investment. Resist the urge to purchase any new equipment or office space.
Though there is no hiding the fact that you have to invest in your company in the long term or close down, there is a right time to make a capital investment. When a business struggles to make payroll, capital expenditure should be delayed until a future date.
Swap and Barter:
For companies with small marketing budgets, bartering or exchanging products and services directly with other businesses for things that those businesses need rather than for income is one of the smartest ways to keep your brand visible especially in tough times.
Barters can be an affordable way to get advertisements, leads, printing supplies, media attention, and so on that your business badly needs to stay afloat. This idea will surely help conserve highly-needed valuable cash in times of difficulty.
Think Like an Outsider to Your Business:
Sometimes fresh ideas come from outsiders in unlikely ways. Look inside your business as an outsider and see ideas you can come up with. Also, look beyond your industry to see what other businesses can survive and thrive in a difficult business environment. How can any variation of those ideas be implemented in our business?
Jonathan Swift said, “Vision is the art of seeing what is invisible to others.”
Leverage Business Interruption Insurance:
Business interruption insurance can help you climb out of the slump if your business has hit hard by factors you can’t control. According to Talismancasualty.com the premier property and casualty insurance company, business interruption insurance is designed to replace lost income in the event of certain physical disasters and pays a portion of your lost income during the period of restoration.
One of the benefits of business interruption insurance is that it may be tax-deductible when you make premium payments. Often, this type of business insurance is included in a property and casualty insurance coverage known as Business Owners Insurance or BOP. It may even cover payroll, operating expenses, taxes, and payments for loans.
It’s fine to be a copycat as long as you copy the right cat:
At the moment, some businesses are struggling worse than others. Research those who manage to make it through this situation, and know what they are doing to succeed.
Look at both your indirect and direct competition to get the best idea of what they are doing and which tactics tend to be the most successful. Although some strategies may not be transferable to other industries, use what you can, and change them to suit your own needs.
Debt gives most business owners sleepless nights, especially during tough times. When you’ve fallen on hard times, banks and creditors won’t back down – they want their money back and will do anything it takes to get it.
In hard times, neglecting to pay your debt is a very bad idea. A much better approach is to renegotiate with lenders over the debts. You could be able to restructure your loans if you have a good history of paying on time.
This could involve accepting longer terms with smaller repayments. Although this eventually raises the loan’s long-term expense, it offers short-term relief when you desperately need it.
When business slows down, it is often painful for everyone: the owner of the company, staff, and customers. But remember that the world still goes on. You should focus on what you can do and control to keep your business open. Try whatever you can to make sure you’re not in the hundreds of businesses that are set to shut down.