Philippines recorded the highest unemployment rate in a decade after the government put the entire country under enhanced community quarantine for months in order to curb the spread of COVID-19. With this, business operations were negatively affected, pushing many SMEs to file bankruptcy and large enterprises retrenching their employees.
If you’re still among those offices who are still in-tact, congratulations for your resiliency. While we wait for updates on when can we be fully operational and back to normal, here are some strategies we could follow:
1. Check and monitor your cash flow
Receivables may halt, but our monthly expenses such as rent and operations remain. With this, we have to properly manage our cash flows and adjust with the current situation. This may mean less dependent expense, and for offices, require people to work from home so there’s lesser occupancy in the office and so lower utility bills to pay.
2. Update your financial statements
By being aware of your financial capabilities, you can make more informed choices that will ensure the survival of your business.
Make a list of possible impacts of the lockdown on your business—sales, staff availability, supply chain, finances, and so on. Create a frequent and regular forecast of your cash flow based on the current situation and news from your customers, suppliers, and the like. From there, you can begin adjusting your operation plans.
3. Look for fees, taxes, and rents waived or reduced
Part of the administration’s plans to address the needs of businesses throughout the crisis is ordering the rescheduling or waiving of rentals, payment for credit cards and bank loans, interests, penalty fees, and other monthly charges.
Prices of rental properties in BGC have declined since the lockdown. This may be a good opportunity for you to move to a much affordable place.
Stay on top of the information from your local government, as well as your banks and other institutions. Once there is an official announcement, keep track of the specific terms and conditions of the waived expenses. This will help realistically ground your budget and plan for other necessities.
4. Negotiate with your suppliers to enable business continuity
Nearly everyone is suffering during this public health crisis, including your vendors and suppliers. Negotiate the best possible terms with your suppliers—from delivery timelines and logistics to payment adjustments and schedules. Maintaining constant communication can mitigate the effects of possible delays and other unforeseen circumstances.
It’s also essential to keep your customer base in the loop for these supply changes to manage their expectations better.
5. Be aware of payment extensions for specific services
Internet connection, phone lines, utilities, and ad placements are necessary expenses in running and growing a business. With a crisis at hand, you may need to reevaluate any and all costs to preserve your finances.
Certain service providers may be offering payment extensions to their subscribers. Take advantage of this opportunity by paying close attention to official announcements from your providers. Make sure to carefully read over the specific terms and conditions for payment extensions, as interest rates or other miscellaneous fees may still be applied.
6. Reallocate budget
As the enhanced community quarantine continues, cash reserves are sure to lower or fluctuate. Keeping your business operational throughout the lockdown means funneling money towards essential expenses.
Examine your overall spending and see where the budget can be cut down, so it can be shuffled into something of higher priority. For this, you need to make more austere assumptions, such as a more substantial decline in sales or a lack of supply due to limitations on travel.
Closing storefronts, pausing marketing and advertising efforts, and maintaining a skeletal workforce are just some ways to move the budget around. Aside from this, consider reducing work hours and pay to keep the cash flow steady while addressing other business needs.
7. Explore or amplify online channels/sales
With limited travel hours and modes of transport, your business may suffer from a lack of storefront traffic. Now is the time to make the shift to online sales, if not, increasing your online sales efforts.
When making this shift, take into consideration how your product can be best delivered, given the restrictions. Establish your presence on digital platforms, as well as the means necessary to deliver your products to customers.
With COVID-19 threatening not only public health and safety but also the livelihood of the general public, it may become difficult to get through the month-long lockdown. The key to weathering this crisis is to keep the financial health of your business in check and making the right calls to preserve your cash flow.