The coronavirus (COVID-19) has quickly become a major concern for people all over the world. While people are understandably concerned about their health, the virus is also having a serious impact on the economy. The stock market has recently taken quite a hit. Both large and small business owners should be prepared for the effects it can have on their business and industry.
Let’s look at some tips to help protect you from this health challenge as we all hope that it’s soon under control.
When you train staff to perform multiple tasks, you’re less likely to be shorthanded if certain employees can’t come to work.
Allow Employees to Telecommute
Depending on your business, it may be possible to let some employees work from home some or part of the time. This lowers health risks for everyone.
Track your Financials
While it’s always a good business practice to monitor your debits and credits, the potential problems caused by the coronavirus make it especially critical. Use reliable accounting software or find a professional who provides accurate and up-to-date balance sheets.
Look for Ways to Lower Operating Costs
Find ways to reduce or eliminate non-essential business expenses. This includes energy conservation, reducing production costs, buying used instead of new equipment and any other areas where you can streamline without compromising on quality or customer service.
Manage Your Supply Chains
Do you depend on suppliers from hard-hit regions such as China? If so, look for alternatives. Otherwise, you may experience sudden disruptions that could severely impact your business. It’s also a good idea to create contingency plans in case your supply chain is disrupted. This may involve using different parts or looking for new products to offer.
Be Honest and Transparent
During a time of crisis, it’s especially important to be forthcoming with all stakeholders. If you’re experiencing unavoidable delays, explain this to your customers. If you’re late with payments to suppliers or financial institutions, talk to them and try to negotiate mutually acceptable terms.
Review Your Insurance
Look over your business insurance policies and talk to your broker. Find out if you’re eligible to make claims on a continuity policy if your business suffers losses due to the virus. Research the benefits of changing or adding a policy to protect yourself in the future.
Understand Your Cash Flow Situation
A health crisis can quickly affect your cash flow. Be aware of how a slow period will impact your ability to pay suppliers, everyday operating costs and debts.
Alternatively, your business could experience a surge in demand during this time, especially if you are in the healthcare industry, or supplier of food & beverage, or other goods. Adequate cash flow is crucial to keep up with the sudden increase in demand.
One of the best ways to ensure steady cash flow during uncertain times or spikes in demand is invoice factoring. When you factor your invoices, you can collect payments right away. This provides capital to continue your business operations and protects you in the event that some of your clients are impacted by the virus and are slow with their payments.
It’s still uncertain how serious an impact coronavirus will have on small businesses and the economy in general. It’s always best to be prepared. If you’re seeking to improve your cash flow situation, Riviera Finance has been offering small business financing solutions for 50 years.
To learn more about how invoice factoring can work for your business, contact Riviera Finance.