Open for business: coming out of lockdown
Another step towards post-lockdown normality (whatever that means!) comes with the reopening of non-essential shops from 15 June.
Many businesses have adapted over this period, and there is a lot we can learn from them to have the best chance of success as the world moves forward. Technology and cash flow have been paramount in keeping these businesses going, but what can you do to utilise them to the best of your advantage?
Managing cash flow
Cash flow has always been essential to the success of a business, but it's often overlooked during a business 'high'. Many companies find their income on 'pause' and look to unpaid/overdue sums due to them, in an attempt to make up for the shortfall.
A recent survey found that a significant number of SME owners had recently used personal savings to keep their business trading.
A key takeaway is to prioritise cash flow. Ensure you have robust invoice management processes in place, and explore the potential of invoice financing as a way of receiving payment early on.
Managing loans and debt
It's natural in business cycles that forms of debt become slightly more accessible and acceptable to take out. Taking risks is part of a business, and you can't easily plan for recessions, natural disasters etc.
If you find yourself in unexpected debt, there are several options available to you, and it is essential to assess each one.
It may be possible to renegotiate existing bank loan terms. You could look to finance existing debt with newer debt on more favourable terms, while of course ensuring you have a robust plan in place to deal with paying it off. Or, you could look to reduce business costs (without lowering income!) by finding ways to make savings, i.e. rethink real estate costs, improve processes etc.
Technology infrastructure in place
Technology has proven invaluable to businesses, and it's more apparent than ever as remote meetings and online collaboration have cemented their spot in everyday lives.
Businesses need to consider their technology offering to customers as well as their infrastructure to enable true remote working. IT is often a significant investment for businesses each year, but now it is top of mind.
To conclude, coming out of lockdown businesses are likely to be very cautious. The key to survival is maintaining good books, with cash flow and debt management high on the agenda. Businesses will also need to look at their current IT infrastructure and whether or not an investment is necessary for the short-term.