The effects of COVID-19 are still visible all around the world, and the global efforts to contain the outbreak through mobility restrictions have caused drastic shifts in consumer demand and behavior. The financial recovery of businesses is kind of asymmetrical – amidst all of this, economic recovery is crucial in the return to a normal world.
However, such a form of expansion needs to happen on a broad scale with plenty of resources for businesses in all areas and sectors. And while governments are easing restrictions in stages, business will recover at varied paces based on their industry and geography. If your business has been hit by the pandemic, it’s time to think about financial recovery. Below, we are listing the five steps you should consider and start with the recovery process.
1.First of all, think about health and security
COVID-19 is a human problem that requires a proper health response in order to protect more people. In the business sphere, this means starting with health and security – you should make sure you have implemented some of the best practices to keep your employees safe and prevent further transmission. Safe distance protocols, plexiglass barriers, masks in some areas or vaccination entry only are some of the common practices.
If you can’t make this work, make sure there is a way for your people to work remotely. Be sensitive to the financial distress that your personnel may be experiencing and look to build employee loyalty above all.
2.Prepare a communication plan
A solid communication plan should target employees, customers, and suppliers. It should voice a clear and concise message, schedule regular updates and use technology to send out messages to everyone. You should put someone you trust in charge of your communication plan – ideally, look for someone from the HR department to lead it.
3.Contact your customers
Contact your customers and confirm that business is as usual and all the orders or services are on track and/or available. You don’t really need to renegotiate payment terms, but you may need to defer production or loosen some of the terms. There will be some changes in your cash flow, which is why you need to understand the financial impact of these changes and develop a forecast that reflects the changes.
4.Reach out to your suppliers
When it comes to suppliers, there will probably be some delays, so make sure you contact them and know this early – all so you can manage your customers’ expectations and update your plans.
5.Evaluate your capacity, resources, and cash flow
An aligned workforce is the best way to work towards your new projections. Demand may dip, which is when you will want to realign things and see where you can shave costs and discover some other more sustainable cost savings from which you can benefit after recovery. Question which expenses are really necessary and optimize your budget.
If needed, you can always seek out business loans in Michigan and get up and running again at full capacity – there are options with flexible repayment plans and good interest rates. For more information about corporate financing, contact us today!