Back to business: how SMBs can prepare for the post-COVID economyWednesday, July 29, 2020
Posted by Reagan Reeve
In the current climate, it's never too late for businesses, especially SMBs (small and medium-sized businesses) to start planning for the future. As businesses adapt to the new normal, they will need to make choices about how their businesses recover and, in some cases, reinvent. Yet, despite this, less than half (45%) of SMBs believe they are prepared for the next six months.
Business owners find themselves in a challenging environment, but there are safety nets in the form of government support schemes and even opportunities inherent in remote working they can take advantage of. Yet, SMBs first need to strengthen the foundations of their business - their cashflow, data and systems - to maintain continuity, as well as plan for the future. 'Business as usual' will not return for some time, so SMBs should adapt for working in a new, faster and possibly all-virtual economy.
Maintaining Cash Flow and Liquidity
Many industries are experiencing reduced demand and SMBs will feel continued cash flow pressure as customers seek to extend their payment terms. Ongoing expenditure, in the form of employees' salaries and outgoings, combined with less cash coming in will remain a real test for businesses.
The Government continues to offer grants and business loans, and SMBs should take full advantage of them. Indeed, 90% of small businesses already intend to claim $1M or less from the Paycheck Protection Program. Even once lockdown conditions have lifted, there's no reason not to take part if paying salaries is stretching your business's ability to run.
Yet, the application process can be difficult for a business that doesn't have its data in order. Information will be needed, including reference pay and employee personal information from Finance, Payroll and HR teams. If this information isn't easily accessible, applying for financial support can waste precious time and resources.
Fortunately, the shift businesses have made towards centralising integrated data in the cloud helps to streamline the application process. Unifying information makes locating specific data points quick and easy, helping teams move faster and be more productive.
Furthermore, tools to help simplify forecasting and enable businesses to plan for cash flow voids, keep track of invoices (to ensure they're paid), and empower informed decision making can be a huge support system for business owners. This is particularly the case in smaller organisations where the owner double-hats as the CFO.
A World that's Working from Home
SMBs also need to adjust to a future of virtual working. Over half (57%) of businesses intend to maintain remote working in the long term. Working from home has become universal over the last few months, and it won't be going away any time soon. Google, Facebook and Twitter have been some of the first brands to offer employees the option to work from home in the long term, but it's likely to become standard practice for many companies as the threat of coronavirus remains active.
This doesn't need to be bad news for businesses. Many of the SMBs able to offer their services digitally are already reaping the benefits. The majority of employees (82%) say they're more productive when they have access to remote working, and 58% say it improves job satisfaction. Productivity has actually increased by 47% since the lockdown began as many industries - including financial advisors, certain manufacturers and distributors - work to service increased client demand in an uncertain time.
Fewer absences and the potential to save costs on office space could make working from home a permanent move for many SMBs. Yet, while remote working can increase collaboration, cut costs and boost productivity, it only works when the right systems and support are in place for colleagues.
Remote workers may feel disconnected from the business and find it difficult to find the information they could easily ask for around the office. Many will continue to search for a new optimal work-life balance and childcare routine, leading to elevated stress levels that can impact performance and wellbeing. It's important for businesses to equip employees with the tools and resources they need to perform at their best. Establishing regular virtual meetings and updates between staff and managers can also help to manage workloads and provide staff support.
Technical support will remain very important for remote workers, but this can lead to HR and IT support teams feeling inundated with requests. A centralized online filing system - where employees can access support resources, FAQs, and submit requests if they need further help - can give staff the ability to self-serve. It helps them get the information they need quickly, and reduces administrative time that lets managers focus on more strategic tasks.
Ready for the future
The next few months will see challenges for businesses of all sizes. Conditions are changing hourly, and recovery will be gradual. No one can tell what the 'new normal' will look like. Yet businesses aren't powerless in the face of the pandemic. SMBs can make crucial decisions now that mitigate challenges and strengthen their businesses.
Digitizing operations where possible, and adopting cloud tools to streamline operations, will help SMBs protect their cashflows. Providing the tools to work from home will allow staff to continue working safely and productively. Having the digital pillars in place, will help SMBs kick-start their engines, whether it's to ride out the storm today or get 'back to work' in the future.
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Sage is an accounting and managerial solutions company which specializes in providing its services to small to medium sized businesses. Sage's services can save SMBs time, stress, and money on one of rthe most crucial aspects of maintaining a business, just give us a call today at 1-866-996-7243 or visit https://www.sage.com/en-us/