- May 31, 2020
- Posted by: Nigel Howard
- Categories: Allservices, best high risk merchant account provider, best high risk merchant services, cbd merchant processors, cbd oil payment gateway, high risk payment gateway uk, high risk pharmacy merchant account
Successfully building a company is a Herculean feat at the best of times — 95% of startups fail and most small businesses close their doors before they turn five.
With that in mind, it might seem near impossible to do so when there’s a global pandemic shutting down the world’s economy.
Nobody knows for sure when we will emerge out of this black hole and markets will resume normal programming — estimates ranging from several months to several years.What we do know is that unlike the global financial crisis of 2008 which pointed to internal problems in our financial markets, COVID-19 represents an external event, and so it stands to reason that we should expect a rapid recovery once the crisis subsides — or at least we hope so.
Hit by the Covid-19 slump followed by social distancing and a nationwide lockdown, businesses are experiencing major impacts no matter how established they are and are having to re-look at how they manage and operate their business including re-visitation of their business plan.
Small-business are bracing for the worst economic scenario due to the COVID-19 effect.
“The regular cash flow is the lifeblood of these small companies,” says Mills, who has been advising legislative and business leaders on possible solutions to help in recent days. “Money at the door helps you to put the money out of the house. Small businesses are vital to the economy of the nation whether there is a pandemic across America. But how can they survive during such an extraordinary crisis? Here are some ways that can support entrepreneurs.
Secure liquidity of the company
Access to cash is one of the key challenges for small businesses. Running any company is a risky undertaking, but small businesses are particularly vulnerable. According to the “Small Business Administration”, only about half of the small businesses survive more than five years. Overhead costs such as leasing, payroll, and expenses leave very little cash for owners of the company.
Small business owners should advocate for efforts to provide immediate liquidity and keep companies solvent in order to combat this short-term challenge.
Ensure the value of the capital
Liquidity for franchise companies is just a part of the equation. The cost of goods sold in the service industry is primarily salaries paid to the employees. For small companies, debt loads from Small Business Association loans are popular and may generate additional strain on business owners. Layoffs are a major problem, with demand down and paid leave provisions now a reality. This is only possible when businesses take support from outside or make partners save the capital of the companies. Many of the big industries and the U.S. government have come to support small organizations.
Facebook said it would give small businesses $100 million in grants along with that it would also help fintech firms including Kabbage and Fundbox, specializing for loans to help the market condition.
Contract with policymakers
There are many proposals in Washington calling for billions of aid to small businesses and may feel out of reach as we work from our cities, miles away from the capital of our nation. But in this moment of crisis, our voices are vital and we should not leave the big business when they speak for us in the emergency situation when this crisis is impacting us.
It has become challenging for most businesses to keep their financial wheels turning during the lockdown period due to less revenue churn and the general uncertainty in the global financial environment.
This is the time when understanding the gravity of the situation and turning it favorable for the business is all that matters to let it sail smoothly in these difficult times. Here are a few tips to stay connected and afloat during the shutdown:
1. Communicate transparently with your customers
We are all in this together, so the ideal way is to stay transparent with your consumers about what your business is going through. Customers can empathize with companies facing a crisis, as long as the communication is transparent. Communicate with customers to understand their perception of the product/solution offered by you.
2. Maintaining healthy relationship with contracted parties
It is understandable that it might be difficult to pay out vendors/suppliers during the lockdown. However, it would be helpful to give your vendors, suppliers, landlords’ etc. sufficient notice in case there is going to be any delay in payments so that they can also be prepared and there is no bitterness in this already difficult time.
3. Managing employees & related optimization
For large companies considering layoffs, the primary option should be to cut the salaries of the higher paid exec/employees to try to retain the people who can least afford to lose their jobs employed. However, when the time comes to make the tough call, do it with compassion look out for government directives, and offer extra compensation as and when required. Such implementation should be carried out only once and not in sta ..
4. Keep Your Team Engaged
Your team relies on you so keep them updated about every development. As a promoter, it is your responsibility to keep your team members engaged and stay connected with them through video conferencing tools like Zoom and Google Hangouts. It is very important to maintain high spirits within the team and understand the general mood within your remote workforce.
5. Communication to stakeholders
Consult with your investors or external experts to plan the right form of communication with stakeholders, most importantly customers and employees. Have an honest conversation on the situation and its impact on your business with your entire leadership team. Any negative message should be delivered with utmost empathy along with transparent reasons.
Now, big corporations and government agencies may provide relief by just paying unpaid bills for small organizations. Large companies tend to postpone payments to vendors to save cash as economic problems grow. Mills recommends that organizations reject that tactic when it applies to small businesses and pays bills to support not only the vendor but also to save the American economy as soon as possible.
Small businesses, around the world, are the very foundation of our communities. This is a crucial time for all of us. When we lose these small businesses, our cities will look very different, and it will take a long time to get back the industries that we will have lost.
In these difficult times it is important to stand united and help one another in whatever way we can.Stay safe and stay healthy. Please remember that some of the best initiatives are built in trying times. Like all difficult situations, this too shall pass!