By Paul Henshall, CEO ActionCOACH ANZ
Although Australia and New Zealand were not as severely affected with regards to high numbers of infections as a result of COVID-19, thanks to strict and early lockdowns, the economy in both countries has been significantly impacted, with the worst economic contraction ever being reported.
Even though certain sectors have been hit hard, such as tourism, retail, aviation and hospitality, lower consumer spend has affected small businesses worst of all. Even though some SME’s managed to keep their doors open and adapted to start selling online, they will need to be prepared for when the government stimulus packages and wage subsidies expire early next year.
If they haven’t done so yet, small business owners will need to evaluate every aspect of their business and use the opportunities currently presenting itself to change and adapt their business model to ensure that they can not only survive but thrive once the worst of the looming recession has passed. Now is the time to do educate yourself on how to manoeuvre through the next few months, do your research and learn from all the available business survival tools available. Tap into your local business networking opportunities, read up and watch the many tutorials made available for free online by business coaches and read up on how similar businesses survived previous recessions.
It is extremely important to relook your cashflow situation and figure out which of your products or services are currently making money. Focus on increasing marketing around your best-sellers and ensure that you find creative ways to make them more attractive for new customers as well as retaining your existing clientele as much as possible. With the Australian government recently announcing a change to their bankruptcy laws, allowing SME’s to trade if insolvent offering additional time to try and find solutions to navigate themselves out of debt, it is crucial to plan now should this happen to your business.
One of the biggest mistakes most businesses make during tough economic times, is to cut their marketing spend. During a recession such as the one we are facing currently it is now more than ever important to be visible. With most of your competitors not stealing the spotlight as much as usual, there is the potential to tap into a new target market or attract the attention of new customers who haven’t been exposed to your product or service previously. If cash is strapped, leverage social media platforms such as LinkedIn, Facebook, Instagram, Pinterest and Twitter to direct potential customers to your website or store and ensure to engage with them. This way, once your old customers start conversing again, you will hopefully end up having even more customers than before.
The reality is, no one saw COVID-19 coming. Some businesses have enough cashflow to survive the storm, some will close their doors permanently, while there will be those who see this as an opportunity to adapt, learn and re-invent themselves to get through these times stronger and more profitable than ever before. This is a completely new playbook and as a SME you are the narrator of your own story. Tap into tools, knowledge and experience and upskill yourself to make your business more profitable. There are certain fundamental aspects you need to revisit today. Ensure that you are profitable - offer instore credit such as ‘buy now pay later’, set budgets and ensure that your team understand and adhere to them. Implement great customer service which will lead to testimonials as well as referrals and make the most of re-look your product line. You need to offer a product or service with which you can make ongoing profit by for instance offering subscriptions or only stock faster-selling, more profitable products.
Cashflow is king! If you can navigate your business through this storm, it will not only set you up for post COVID-19 but for any future recession that might hit.