Rebuilding your business after COVID-19 lockdowns
Small businesses are the backbone of the American economy, accounting for almost half of the workforce. Namely, there were more than 32.5 million small businesses in the US in 2021, according to the Small Business Administration. That’s why in times of trouble, such as the current downturn due to the impact of COVID-19 on the economy, it's vital that these companies receive all the assistance they need or take necessary steps if the current administration won’t help.
Joe Biden’s response to the COVID-19 pandemic has devastatingly affected small businesses. Many have been forced to close their doors due to government-mandated lockdowns. As a result of this policy, several small business owners have been struggling to make ends meet.
We’ve already observed how Biden's policies have further shrunk the GDP by 1.4%, in addition to the 3.5% contraction that we saw in 2020. When the GDP contracts, it doesn't just mean that there is less money to go around. It also means that there are fewer opportunities for businesses to thrive. And small businesses are especially vulnerable in these circumstances.
So, what can small business owners do to rebuild their companies after the lockdowns?
It's crucial for businesses to pull themselves up by their bootstraps and take the following decisive steps. Thanks to those efforts, they'll be able to rebuild their operations and recover from the effects of the lockdowns.
Assess the financial losses
In the initial phase, it’s imperative to gauge the financial damage that your business has suffered. This necessitates looking at your sales, profit margins, and expenses for the past year to see how you've been affected. If your financial statements aren't up to date, revising them should be your priority.
Compare the years before and during the pandemic and scrutinize the discrepancies in the profit margins. Have you been forced to let go of some of your employees? If you have, consider it along with any other ways you have to cut down on your budget. If you also lost customers last year, you should look into loans to help your business recover. You need to have a clear understanding of your business's financial situation before you can move forward.
Adapt your business plan to post-pandemic circumstances
The second step is to adapt your business plan to the post-pandemic market. This means taking a close look at your product or service offerings and ensuring they are still relevant in a world that has gone through a paradigm shift. It also means analyzing your target market to ascertain if you’re still addressing the right demographic.
Your business may have to change its offerings or target market completely. For instance, a wedding planner might have to focus on small, intimate weddings instead of the large events that were popular before the pandemic.
It's also essential not to do that in a vacuum. Observe how your competition and industry, in general, have fared these last few years. Have there been any changes that you need to be aware of? After you have compiled all this information, you can start making changes to your business plan.
Be realistic about what you can achieve in a post-pandemic world and what you need to do to get there.
Explore if you need a business recovery loan
The third step is to explore if you need a business recovery loan. If your business has been severely affected by the pandemic, you may be eligible for a government-backed loan. These loans are designed to help businesses get back on their feet and cover any financial shortfalls they may have incurred.
However, before you take out a loan, make sure that you have a solid plan in place for how you’ll use the money. This will increase your chances of being approved for the loan and help you avoid any financial difficulties down the road.
The SBA's Economic Injury Disaster Loan was an option business could apply for. This loan offered up to $2 million in funding, with interest rates as low as 3.75%. Unfortunately, it’s no longer processing new requests. If you're exploring financial options for your business, you might also be interested in understanding the current SBA loan interest rates, as they can vary over time.
Loans are not the only form of financial assistance that businesses can receive. The government also offers grants to companies that have been affected by the pandemic. These grants can be used for a variety of expenses, such as payroll, rent, and utilities.
The thing to remember is that there is no one-size-fits-all solution when it comes to business recovery loans. It's important to explore all of your options and choose the one that fits your business needs.
Plan your budget carefully
After assessing the damage, adapting your business plan, and exploring your financing options, it's time to start planning your budget. You’ll need to be realistic about what you can afford and what you should cut back on.
You should keep a few things in mind when planning your budget. First, remember that your revenue will probably be lower than it was before the pandemic. Lower-income means you’ll need to find ways to cut costs and increase efficiency.
Second, think about how you can optimize your cash flow. This may involve renegotiating contracts, delaying payments, or taking out a loan.
Third, don’t be afraid to ask for help. There are many government programs and private organizations that offer financial assistance to businesses.
Create a list of all of your fixed and variable expenses. Once you have that, you can start looking at where you can make cuts.
It's important to remember that you may not be able to cut back on all of your expenses, as some of them, such as rent and utilities, are fixed. However, there may be some variable expenses that you can reduce, for instance, advertising or business trips.
You should strive to create a realistic budget that you can stick to. Once you have that, you can start working on getting your business back on track.
Develop a marketing strategy
The final step in rebuilding your business is to develop a marketing strategy. This means devising a plan for how you're going to market your business to potential customers. It also entails setting a budget for your marketing activities.
Once you have a plan in place, you can begin executing it. Typically, this phase will involve creating content, running ads, and doing whatever else it takes to promote your business.
An online marketing campaign for a small business
Inefficient marketing strategies are a waste of money, and you can’t afford to waste your marketing budget on futile campaigns if you’re a small business owner. To get the most bang for your buck, you must be strategic about how you spend your money.
A good way to start is learning how to create a strategy for online marketing that will assist you in reaching your target audience and growing your business.
The first step is determining who your target audience is and whether it has changed since the lockdown. Who are you trying to reach with your marketing message? Imaginably, you are managing a restaurant for students, they will love seeing you on social media featuring their favorite fast foods and desserts. The outcome will be engagement and sales thanks to targeting.
Once you’ve figured out who you’re going after, you can start crafting messaging and content that will appeal to them. Marketing via the internet and social media is more effective when looking to reach a specific audience that has the potential to become customers for your business.
The following are platforms to consider incorporating into your online marketing strategy:
- YouTube
- Google Business Profile
Understanding how each platform can reach your target audience is essential before committing to one. What social media platforms does your target consumer uses the most? Which channels will give you the best chance of reaching them? You can improve your approach to online marketing based on the responses to these questions.
Final thoughts
The imposed restrictions have been difficult for businesses and have diminished their freedom to prosper. However, it's crucial to keep in mind that you're not alone and that careful planning and execution can help your business recover from the consequences of the lockdowns.
The tips provided in this article will help you get your business back on track and rebuild it to be stronger than before. Additionally, implementing these steps will help ensure that your business can withstand future challenges.
Author's Bio
For years, Igor Mitic worked for clients that were banks. That gave him an insider’s view of how banks and other institutions create financial products and services. Then he entered the world of journalism. Fortunly is the result of our fantastic team’s hard work. He uses the knowledge he acquired as a bank copywriter to create valuable content that will help make the best possible financial decisions.