Covid-19 Business Survival Strategies

Real Strategies in the time of a Pandemic.

The impact of the lockdown on small businesses will most likely be more brutal than large and medium sized entities.

Essential Business Strategies to Survive Covid-19

Business After Covid-19

We know that it will never be business as usual and these trying times now call for a new set of rules to survive.

Many businesses were struggling before the pandemic and some have now closed their doors.

The impact of the lockdown on small businesses will most likely be more brutal than large and medium sized entities as they have scarcer cash reserves, smaller margins and lesser bargaining power.

Non profits will also be under more pressure as members, donors and benefactors have been hard hit themselves and may not be able to afford continued support to sustain these organisations.

Successful economy recovery and turnaround is however possible if organisations relook at how they manage and operate their businesses.

Step Ahead has identified some survival and turnaround strategies to assist:

Re – evaluation of your Business

Covid has given us an opportunity to restructure, redefine our core purpose, refocus, modify business models, overhaul or eliminate underperforming operations, streamline processes and reduce costs.

Cash Flow Management

Manage your cash flow
Develop planning and forecast models for effective cash flow
Understand short term cash flow needs

Revisit your Strategy :

Redefine vision, mission and goals

Manage your Costs

Know and understand your costs
Assess if they are fixed or variable
Utilise planning tools s such as budgets and rolling forecasts
Identify and investigate variances against budget
Convert fixed costs to variable

Adaptability and Flexibility

Be flexible
Check the feasibility and relevance of your business model
Continuously adapt your business model to the changing landscape
Consider alternative revenue streams
Offer virtual services

Manage Working Capital

Free up working capital
Evaluate lower stock levels and ability to meet customer needs
Invest less in stock and manage existing stock
Consider liquidating stock and selling at a discount
Manage Supply Chain Risk
Consider alternate supply chain financing options

Access to Special Funding

Access available Covid funding
Evaluate ability to repay loans
Avoid expensive debt financing

Managing your Suppliers

Maintain healthy relationships with suppliers and contracted parties
Negotiate payment holidays and extended credit terms
Provide sufficient notice to suppliers if there will be a delay in payment
Re-evaluate your supplier database and look for new suppliers and more favorable rates

Assess Potential for Greater Efficiencies

Review efficiency Levels
Identify opportunities for greater efficiency
Benchmark your business
Utilise software
Centralise services (combining tasks)
Capacity utilisation
Consider Automation (production facility) vs manual work
Consider Capex Investments
Assess viability of outsourcing non core activities

Customer Relationship Management

Discuss with customers what their needs are and how to accommodate
Keep in regular contact so that they don’t go elsewhere when fully functional
Negotiate with customers if unable to pay
Extend credit terms if possible
Consider relationships with customers going forward
Evaluate credit risk of customer

Cost Reduction Strategies

Review medium term challenges for at least 6 months
Review Overhead optimisation
Review Headcount
Review raw material usage
Evaluate printing, cartridges & photocopying and stationery
Create a culture of cost saving
Ask employees for cost saving initiatives and implement

Contract Management

Evaluate all contracts and renegotiate
Obtain legal assistance to review contractual obligations
Utilise professional services to assess if you are entitled to claim from insurance

Marketing your Brand during Covid-19

Effective marketing during Covid gives your customers a reason to purchase from you instead of your competitors and ensures that they stay loyal to you.

Covid Marketing Strategies:

Maintain your footprint
Continue to promote your brand
Revise and update your marketing plan
Move your business online
Invest in digital marketing
Explore social media marketing opportunities
Regularly update your website and social media profiles
Keep your customers updated on new and existing products and services
Leverage on Video Conferences
Use virtual showrooms
Turn in-person services to home delivered products
Promote gift cards and vouchers

Useful Links:

TERS COVID FUNDING:
https://uifecc.labour.gov.za/covid19/

SMALL BUSINESS DEVELOPMENT:
http://www.dsbd.gov.za/

IDC FUNDING INITIATIVES:
https://www.idc.co.za/2020/06/24/idc-interventions-in-response-to-covid-19/

STANDARD BANK
https://www.standardbank.co.za/southafrica/personal/campaigns/covid-19