Covid-19 pandemic has been a major shock to the world economy, from the largest and most powerful companies, to small businesses have felt the impact of confinement and the new normal. Since March 2020, only in the United States, 163,735 small businesses have been forced to close, according to the Yelp: Local Economic Impact Report.
Health projections for 2021, while encouraging, will not be immediate. According to the World Health Organization, the Covid-19 vaccine could be applied in March for the most vulnerable people, while for the rest of the population, it will be applied during the course of the year. In this situation, small businesses should plan appropriate strategies to counteract the effects of the crisis.
Obtaining financing for your small business is an affordable option to cover expenses, waiting for an improvement in the companies’ income. Profits for small businesses in the U.S., according to Opportunity Insights, decreased to 23.2% and for Latino businesses, 4.6 out of 10 had revenue losses of 30% or more during the pandemic, according to Camino Financial Latino Small Business Survey.
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If we take into consideration these facts, companies will need to plan for 2021. Here are 5 challenges that business owners will face next year, as well as several tips to soften the effects.
- Avoid staff cuts as much as possible
As revenues decline, many owners recur to laying off employees, but one of the priorities of every company should be to avoid talent drain. To overcome this challenge, administrative management is the key. A cost-cutting plan, government subsidies and a small business financing can be your best ally.
- Keep and generate customers despite the crisis
Empathy is one of the most important values during this pandemic, and for customers it does not need to be an exception. To maintain their preference, you can offer deferred payment, discounts and appealing promotions for them. To get new consumers, the trend is the implementation of digital marketing strategies.
- Take care of the capital flow
All income must be handled carefully. To maintain capital flow the recommendation is to offer payment facilities, this way you will continue to receive money constantly. You can also renegotiate agreements with suppliers and other participants in your production process.
- Face a new closure in case of an unexpected confinement
In just 10 days, the US went from 9 to 10 million accumulated infections of Covid-19. Restrictive measures come and go. For this reason, companies should prepare and save, invest wisely and always keep in mind the possibility of accessing small business financing to cover fixed expenses, if needed.
- Adjust your business model to current needs
To keep your business afloat in these times you will need to adapt to new customers’ needs. Identify which trends your clients follow, such as online shopping. Don’t resist change, these innovations will give you great benefits in the future. A small business financing can help you modify your infrastructure, operation or processes.
Our life changed drastically from one moment to another, however, the economy is slowly being reactivated. To reach pre-pandemic indicators we will have to wait until 2022, at best. That’s why we need to be prepared to fight the battle and emerge victorious with the least possible casualties.
The entry of a new government in the middle of a pandemic means a 2021 full of challenges for the entire population and in particular for small businesses, which represent 95% of the total of existing companies in the U.S. for Kauffman Foundation and generate 56.8 million jobs according to the U.S. Small Business Administration.
In this changing landscape, you need to know the tools you have to cope with it, for example, a small business financing. Approach institutions like Camino Financial, which can help you stay afloat and preserve the wealth you’ve worked so hard to build.