After the shock of going into lockdown and either temporally closing or moving business operations to working from home, it’s time to consider your business’s next steps.
How you support your customers and suppliers now will impact how you work together in future.
We’re all in this together and now is a time for empathy, communication and collaboration to get the best outcomes for all.
A) Supporting and maintaining strong customer relationships
Communication is vital; keep customers up to date with what’s happening in your business. If you’re still operating, ensure your customers are informed of any changes or disruption.
Some customers will be struggling with cashflow so consider offering payment term flexibility, but be sure to agree expectations before providing your products or services.
If your business is unable to operate, consider how you can keep your customers engaged. Increased traffic on social media platforms is a great opportunity to capture attention. Utilize videos to engage your customers and wider audience. For example, a café might share popular recipes to make at home; a builder may share how-to videos for basic DIY or projects for kids; a retailer could share product reviews; a hairdresser could show how to create different hairstyles.
B) Working with your suppliers
Communication is vital; Call each of your suppliers to understand how they’re impacted and how this will flow on to your business.
If your business is still running, discuss their supply chain and measures they’re taking to continue supply. Review your contract, paying particular attention to your obligations, the supplier’s obligations, payment terms, cancellation of orders, and whether there are any clauses which change the terms in times of crisis.
Honestly is crucial; if you simply don’t have the cashflow available to pay them; ask if you can spread the cost over a longer time period or work together to agree on an achievable payment arrangement. Review all your contracts, including supplier contracts and contracts with lessors of premises, vehicles and equipment. You may need to renegotiate significant terms.
C) Managing your cashflow
Managing your cash should be a key focus right now.
Take the below steps to manage your cashflow:
- Review your business processes relating to accounts receivable, accounts payable, inventory, capital structure, overhead expenses, gross profit margin, and sales.
- Update your cashflow forecast for the next 12 months to get a clear view of how your business will be impacted.
- Contact your bank and other financiers to find out how they can help you free up your cashflow. Weigh up the cash benefit of utilizing overdrafts and loan repayment holidays now with the impact this will have on your future cashflow.
- Check if your business is eligible for tax relief options announced by the government.
It’s not too late to make a plan for business continuity. The sooner, the better.
Get in touch if you’d like help with yours.