Many small to medium enterprise businesses struggled with the effects of COVID-19 in 2020. Sadly, these struggles appear far from over. In this article, we will examine 5 key tips for small business survival this new year.
Tip 1: Build client and customer relationships
During 2020, the key focus for businesses was survival and staying open. This may have had a negative impact on building client and customer relationships as these relationships may well have been put aside for the time being, or even, ignored entirely as a focal point.
Tip 2: Focus on your suppliers
If the pandemic has taught us anything, it is how crucial the supply chain is. You should look into your suppliers and ensure they are serving your SME the best they can.
Tip 3: Take Care of your Staff
A sad consequence of the pandemic has been the number of jobs lost. But for employers, the new challenge in 2021 will not be whether to let staff go but how to retain the ones they still have.
Tip 4: Location, location, location
A huge number of businesses have seen their teams move to remote working while surging e-commerce and social distancing restrictions have curbed foot traffic in many retail locations.
If you haven’t already, consider whether your current business premises are still fit for purpose. Downsizing or relocating to more suitable premises could deliver substantial rent savings.
Alternatively, engage with your landlord to negotiate a reduced rent that reflects the new reality.
Remember, though, that breaking a lease can be expensive, and depending on the terms of your lease, you may have to foot the bill until a new tenant is found.
Tip 5: Cash flow
The most important thing of all though is cash flow. Analyse how you can reduce constraints in the year ahead.
Consider offering early payment discounts to clients and value-adds for customers to get money in the door faster. Add a “pay now” option to electronic invoices to make it easier for clients to pay it, potentially even that same day.
Ask your suppliers if you can pay in installments to break up large bills, or if they will give you a discount for early payments.
Explore the various government grants available, which are essentially a free cash injection.
Finally, do your taxes promptly. Getting refunds and accessing other tax assistance like the instant asset write-off and hiring youth workers rebates is money you’re entitled to, and it might as well be in your account instead of the taxman’s!
If you would like help with respect to SMEs, please contact one of our experienced accountants by clicking here to submit an online enquiry form, calling us on 1300 QUINNS or alternatively, +61 2 9223 9166 to arrange a teleconference or appointment.