Surviving A Global Crisis
Can your business survive a global pandemic, recession, or an economic halt? The United States has survived The 1918 Swine Flu, the Jim Crow Era, the September 9/11 attaches and now we are fighting the COVID-19 Coronavirus. With each economic hit, small businesses feel the punch immediately. Unlike large corporations that have millions in cash reserves, some small businesses struggle with cash flow prior to an economic downturn. Adding the inconvenience of an economic shut down could put them out of business. A smart business owner will always have a plan that would consider all these risks. While your first thought might not run to how to survive a global crisis when you start a business, what happens when you have to deal with one? Here are 3 tips to effortlessly survive a global crisis.
1. Forecasts are essential
The first step is to ensure you have visibility on your last 120 days of your company’s performance. This history gives you actual income and expenses. If the global markets are slowing to a halt, decrease your projected income for the next 120 days. Create a forecast based on all the changes that are happening around you. Continuing operations as if your business won’t be affecting will push you out of business. You must be proactive instead of reactive.
2. Keep track of your cash
During a crisis, your main focus should be generating positive cash flow. Depending on the current state of the economy, you may have to diversify your portfolio or product offerings. Transition your offerings online. Setup pickup only access or create an order-ahead menu. You may also have to invest in special protection equipment or machinery. Having the right tools to help you monitor your cashflows will give you an account of all the changes you will have to make amidst a crisis. You will have the necessary details when it comes to checking whether any resources are being wasted on irrelevant expenses.
3. Find access to funding
Usually, during a global crisis, there is a major impact on the finances of every business. Therefore, it is important to diversify your capital. This will ensure that you have cash in your business to meet the expenses and perform better during a crisis. Consider increasing your personal capital (credit cards or lines of credit). As the owner of your business, you can loan your company money at 0% interest. Another option is seeking either business grants or disaster relief funding through the United States Small Business Administration (SBA).
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