Many SMEs have struggled during COVID-19. For those that have managed to survive, it is wise to reflect and plan by putting measures in place for future resilience in the event of another crisis. This involves looking at what has and hasn’t worked from the current crisis. We share insights from Inside Small Business on how to reinvent the business model around those experiences.
Proactive vs Reactive
If COVID has proved one thing, it is that businesses will need to work with more uncertainty moving forward. The pandemic has presented with lockdowns and restrictions which resulted in poor business decision making and disorganisation – the reactive realm. The reality is that COVID is far from over, and there may be similar uncertainties in the future.
Planning is paramount. Allocating time to work “on” the business and not just “in” the business, is crucial. It is an opportunity to develop a crisis action plan that should be reviewed often for improvements and effectiveness. Having a plan before any crisis hits is invaluable for business survival.
Cash Flow Planning
Many SMEs need to plan beyond just meeting the bills. Review your cash flow patterns. Once developed it must be managed by accounting for working capital, capital expenditure, operating expenditure, and balance sheet management.
Create your budget with considerations of a timeframe, fixed costs, variable costs, and business income. Monitor and analyse for decision-making. Understand the difference between budgeting and forecasting. Nova Cash Flow Finance has created a simple checklist for your convenience to get you started.
Redevelop Your Business Model
Inside Small Business suggests that business as usual (BAU) should be reimagined, considering lessons learned, the need to remain relevant during and after a period of significant change, and the fact that some things have changed forever. To survive, SMEs need to be flexible enough to respond to changing market conditions, while maintaining a level of activity that secures the viability of the business. By having a nimble BAU, a business can quickly adapt to changed circumstances and cope with events that would have previously damaged it.
About Us – Nova
If you feel you need assistance with your business cash flow, we offer a reliable invoice factoring facility and are committed to the growth of small and mid-sized businesses. Invoice factoring is a cash flow finance solution that allows businesses to access a large percentage of the funds held in their unpaid sales invoices. Your business can enjoy the benefits of the cash flow of the invoice before your customer pays it.
Most small businesses need an overdraft, which can take weeks for approval, to keep operating and enable the business to grow. Invoice factoring is different because you do not have a ‘loan’ as such, and you do not need to secure your funding with property. Your customer invoices act as your security, and approval can be within 24 hours!
If you have any questions reach out to us for an obligation-free chat.
(Source: Inside Small Business 2021)