Almost every country in the world now suffers from coronavirus disease or COVID-19. Even superpower country such as the United States has subdued by the virus. But it’s not only impacting people’s well-being but also the country’s economy. As of today, a lot of countries are on the edge of an economic recession.
As a businessman, it’s okay if you feel unprepared for an economic recession. None of us do. But before it happens, you can anticipate it by preparing these things:
Take a good look at your cash flow
Cash flow is the core of your business. But at a time like this, your cash flow needs more attention. According to a survey from JP Morgan Chase, the small and medium-sized business has to have a buffer fund to survive for 20 days without any income. The thing is, not all of us can do that.
If you want to survive the recession, there are some things you can do to balance your cash flow:
- Take a look at your receivables: Before any of this happen, you probably able to set the payment deadline for receivable up to 60 days. But now, it can’t go like that anymore. Follow up on your receivables. If necessary, set late fees to encourage prompt payment.
- Recheck your payables: Check again which of your payments that you need to settle as soon as possible and which one you can delay the payment. Pay the ones that close to the deadline and postpone the others until their due time.
- Reduce spending: Cut unnecessary spending to balance out your cash flow, such as stock photo subscriptions, cable tv, and other non-essentials.
Improve your creativity to dampen the economic recession impact
The worst impact of coronavirus happens to retailers, restaurants, and services such as gyms or barbershops. Declining visitor obviously will hit their wallet pretty hard. But as it turns out, hardships gave birth to creativity.
For example, coffee shop owners can offer a delivery service to their loyal customers. All you need to do is get the data you need from the membership management system and send the promo message via email or WhatsApp to your customers. This way, your members can enjoy your coffee without leaving their house.
If you are a restauranteur, you can start offering staple food such as salad, soup, or seasoned chicken. Are you a gym owner? You can promote an online session for your members to train at home.
Look for disaster relief funds
Currently, governments around the world are allocating relief funds for small businesses/companies and households. If necessary, you can apply one to help your business survive during these trying times.
These funds are useful to help you pay your essential spendings such as employee’s salary, inventory purchases, and operations (electricity, gas, and water)