The COVID-19 pandemic has wreaked financial havoc globally, leaving several small-business owners struggling in its wake. While the short-term forecast for small businesses varies by sector, it’s vitally important to consider what the recovery phase will entail once the economy begins returning to a state of normalcy. 

By having a sound exit strategy in place once the coronavirus pandemic has ended, you’ll be ready to hit the ground running and start rebuilding. If you’re unsure where, to begin with, your COVID-19 exit plan, the following guide will help in getting your business back on track.

1. Assess your financial damage.

The first and most crucial step in your post-COVID-19 rebuilding plan is determining how much of an impact the pandemic has had on your small business. 

There are several factors to consider, starting with your numbers. If you’ve not updated your financial statements, such as your profit and loss or cash flow statements recently, we suggest doing that now. We recommend comparing your current numbers to last year’s to determine just how much your business is down. Perhaps you’ve had to lay off some or all of your employees; you’ll have to factor this into your rebuilding plan. If you’ve trimmed your advertising or marketing budget, or some of your clients have opted for the competition, then these are vital aspects you need to consider as identify potential financial resources to aid in your recovery.

2. Revisit your business plan. 

Your business model was probably working correctly before the advent of the coronavirus and lockdown, but as we exit the pandemic, you might need to do some fine-tuning.

Most importantly, you will need to consider how your business can pivot to adjust to a possible “new normal”. For example, if your business previously relied solely on food traffic to a physical location for sales, you might need to consider a digital expansion (if you haven’t already done so), to accommodate for the ever-increasing number of consumers who are shopping online. 

Furthermore, proper analysis of how the pandemic has impacted your overall sector is a wise move. When exploring what your competition is doing and the industry, we advise paying attention to any possible trends and focus on finding fresh opportunities. Finding a gap or need which your business can fulfil, which has previously been neglected, could be crucial in reclaiming and bolstering your customer base.

When you revisit your business model and plan, ensure that you get a clear understanding of your company’s strengths and weaknesses. Following this, take a look at what worked before COVID-19, which might not work beyond the pandemic and determine which areas need adjustments or improvements to remain competitive. Lastly, remember to revisit your business goals, to ensure that they’re still realistic in light of current circumstances. 

For instance, you probably set a target for a revenue goal for 2020, which might need to be scaled down now to account for the impact that COVID-19 might have on your second-quarter sales.

3. Do you need funding to recover? 

If you didn’t have significant amounts of cash going into the current pandemic, chances are you’re going to need additional working capital to kick-start your business as we exit this crisis.

When it comes to financing your small business during the COVID-19 rebuilding period, there are several options to consider. Read more about the resources available to South African entrepreneurs here. 

4. Revisit your budget to account for new spending. 

As we exit the COVID-19 pandemic, you might need to spend more money to make money. For instance, you might devote capital on hiring and training new talent, or rehiring any employees you might have laid off. You might also need to purchase inventory as well up your budget for marketing and advertising. 

For effective post-COVID-19 recovery, you need to have a clear idea of what you need to budget for and where you can cut to make the most of the revenue you’re generating. The core goal is to diminish monetary waste to ensure that your operating budget becomes as lean as possible. By doing this, when you encounter the chance to invest or growth opportunities pop up, you’ll be ready to take advantage of it. 

An extreme step you might want to consider during this time is ceasing to pay yourself a salary or take a pay cut. Of course, this only makes sense if you’re able to manage your personal financial obligation and what you have in savings. Skipping a salary here and there in the short-term could ultimately help your business recover faster. 

5. Create a timeline for rebuilding. 

As a small business owner, you probably have several things you need or want to achieve to recover in the wake of COVID-19, but we advise against trying to do everything at once. We suggest taking some time to develop a timeline which prioritises your most important actions first.

Perhaps your immediate goal is to secure funding for your company. Once you’ve achieved this, you should set a timeline for rehiring talent, restocking inventory and lastly reopening your business doors, should your small business be closed as a result of the pandemic. 

As you take individual steps towards your business’s recovery, ensure that you track your progress. It’s especially crucial if you manage to secure funding for your business, as you should not waste time on any activities which don’t deliver substantial returns on investment. During the initial stages of recovery, you should consider doing weekly checks to see what’s working and what is not. Further down the line, you should shift to reviewing your business financials monthly as things begin stabilising. 

6. Develop a contingency plan for any future crises.

While many people view the current coronavirus pandemic as a once in a lifetime event, the harsh reality is that crises can happen at any time, and thus your business is subject to disruption. We recommend using what you’ve learned during the current pandemic to prepare for the next crisis. By doing this, you could effectively protect yourself in advance from any future disasters.

Consider bolstering your liquid cash savings as a priority for your business if you failed to do so before the current pandemic. You could also opt to focus on paying off your debt and cutting back on non-essential spending to keep your budget in check. Furthermore, you could also find ways to help your team work more efficiently to cut back on operational costs. 

Many entrepreneurs might have learned a thing or two about how vital it is to adapt to keep business alive to weather harsh economic storms. For instance, if your team was unable to work remotely during the pandemic, it’s wise to develop a way to incorporate this into your model for the future. 

The more out-the-box scenarios you can develop to prepare for the worst, the better. Develop a Plan B, C, D, or as many as possible to improve your business’s chances of survival and to help your business thrive again during future economic crises.