Despite Covid-19 being fundamentally a health issue, the socio-economic impact of the pandemic may ultimately prove to be far more impactful.
During the period between August 24th and September 6th 2020, 12% of the UK workforce were on partial or full furlough leave. Incredibly, 11% of businesses said that they were at moderate or severe risk of insolvency in the current climate, while this is likely to increase further when the furlough scheme ends officially on October 31st.
As a result of this, business planning has arguably never been more important than it is now. The question that remains, of course, is what steps can you take to safeguard your venture in the current climate?
Optimise Your Cash Flow
Let’s start with the basics; as no single business can thrive without being able to maintain a viable level of cash flow.
However, this can be challenging in the current climate, especially if we consider the decline in consumer spending and the fact that many businesses are recording lower turnovers as a result of lockdown restrictions.
In this instance, businesses can be impacted even more by extended invoice terms of 60 or 90 days, and in this respect, seeking out flexible or short-term financing could help to keep your venture viable.
Invoice financing may also offer some value, as this enables you to sell your accounts receivable and cash in on completed projects before repaying the loan when your clients settle their accounts.
Consider Diversifying Your Venture
Depending on the nature of your business, you may find that one or more of your revenue streams are restricted during the Covid-19 pandemic.
This is why it’s important to take a proactive approach to diversifying your interests, as you look to optimise your number of viable income streams and optimise turnover at a time when you need it the most.
To achieve this successfully, we’d recommend diversifying in a manageable and relevant way that suits both the brand and existing product range.
Also, consider diversifying in ways that don’t excessively increase your cost base, as this can impede profitability and negate any increases in revenue.
Transition Your Business Online
Even before 2020, the ecommerce market in the UK represented a huge and fast-growing marketplace.
However, the growth of this space has been accelerated by the coronavirus pandemic, with the virus expected to add £5.3 billion to UK ecommerce by the end of 2020. This is directly due to a significant change in consumer behaviour, while the trend shows no sign of abating anytime soon.
With this in mind, now is the ideal time to accelerate your own transition online, as you look to optimise your brand’s virtual presence and drive higher volumes of traffic to your website.
It’s also wise to prioritise mcommerce and mobile customers by creating a responsive site, with smartphones and tablets now accounting for just under half of all online sales in the UK.