Running a small business is always challenging, but the difficulty levels go up many more times during the hard times as experienced during the coronavirus pandemic that has taught a few important lessons in business survival. However, there are no set guidelines about how to weather the storm and right the ship because every business is unique, and so are the risks and rewards that accompany it. Therefore, it is never possible to copy the strategies that helped some businesses turnaround and adapt them for your business. However, business owners can make use of some general strategies to help them navigate the choppy waters and safely reach the shore.
Consider the bigger picture
Attacking the immediate problems might appear to be the right decision in many situations, but it is always better to avoid any knee-jerk reaction and look at the bigger picture to understand what is working and what needs some modifications. For example, suppose a business owner finds that two employees are committing repeated errors in dealing with inventory that results in either overstocking or under-stocking. In that case, it might appear that firing the erring employees could resolve the problem. But perhaps a more prudent decision would be to examine if lack of training is the cause of the problem and if properly trained it can result in a permanent solution to the problem, cites Eric J Dalius.
Streamline the staffing
Often payroll costs areso high that it makes perfect sense to ensure proper spending of money on this account. Continuously reviewing the staff, both during normal times and during a crisis, will ensure that the hiring is right and there is a balance between the money spent and the returns from it. It will ensure that the right people are at the right places and they do their job efficiently. Hiring the least expensive worker can be a foolish act as it shows that the management behaves in a penny-wise and pound-foolish manner. Consider the gains when you pay 20% more for hiring a person whose output is 40% more than the low-paid worker, and you can understand how well you have spent the money.
Have free access to cash
Having quick access to cash is a strength for any business owner, especially during a crisis. Maintaining a good relationship with bankers will help in a good understanding of how to obtain a loan. It will also help to secure a line of credit during the good times so that you can make use of it when facing the odds with short-term cash flow problems. A good relationship with a banker has helped business owners during the Covid19 crisis when they could easily access PPP loans.
Do not ignore the smaller stuff
In your quest for looking at the bigger picture, do not ignore the smaller problems, especially those that can have an adverse impact on your business suggests Eric Dalius. Inadequate parking, a large tree obstructing the view of the company signage, lack of traffic access, or bad roads leading to the premises are issues that can have far-reaching effects on your business, and you must resolve these on priority.
Although you must be cost-sensitive, do not try to save anything that can affect the quality.