The world changed rapidly and unexpectedly when COVID-19 entered our lives. Most businesses felt its effects deeply. Some companies had to halt their operations temporarily, while others struggled to stay afloat. As we move forward, businesses are now faced with the challenge of rebuilding and getting back on their feet.
The journey might seem tough, but with some smart moves, businesses can find their way back to financial health. Here are a few tips to guide businesses on this recovery path.
1. Utilize CARES Act Tax Benefits for Businesses
You might’ve heard of the CARES Act. But did you know it’s not only a piece of paper from the government? It’s a tool businesses can use to regain their financial footing. So, what’s in it for businesses? A lot, actually.
Employee Retention Credit: This credit aims to help businesses keep their employees. It’s like a financial pat on the back for companies that choose not to let their employees go, even in tough times. It’s a direct way to save money and retain your skilled workforce.
Business Interest Expense: Got a business loan? This one’s for you. The CARES Act lets businesses increase the amount of their loan interest they can deduct from their taxes. Think of it as a small financial cushion.
Net Operating Loss Carryback: This sounds fancy, but it’s simpler than you’d think. In the past, if your business lost money, you couldn’t do much about the taxes you paid when you made a profit. The CARES Act changes this. Now, if your business is in the red, you might get a tax refund from the years you were in the black.
The CARES Act tax benefits for businesses are plenty, offering them relief in times of uncertainty.
2. Diversify Revenue Streams
The saying “Don’t put all your eggs in one basket” makes a lot of sense, especially in business. Relying on just one way to make money can be risky. What if that one way starts to fail? It’s like standing on one leg; it’s only a matter of time before you lose balance.
Here’s a solution: try different ways to bring in money. If you have a physical store, think about selling online too. If you offer one service, consider introducing another related one. Or, if you sell a product, think about teaming up with another business to offer a package deal. By having multiple income sources, you give your business a better chance to weather any future storms.
3. Reassess and Trim Overheads
Every business has bills to pay. Rent, electricity, supplies – they all add up. But here’s a question: are you paying for things you don’t really need?
Take a close look at where your money’s going. Maybe there’s a subscription you no longer use. Perhaps you can find a better deal on some of your regular expenses. Or, maybe there’s a piece of equipment that’s more of a luxury than a necessity. By cutting back on the extras and focusing on the essentials, you free up money that can be saved or reinvested into growing your business.
4. Strengthen Online Presence
Having an online presence is a bit like having a shop open 24/7. People can visit anytime they want, from anywhere. In today’s world, where more and more people are shopping and browsing online, it’s essential for businesses to be there, too.
If you already have a website, think about making it better. Is it easy to use? Can customers find what they need quickly? If you don’t have a website, now might be the time to get one. And it’s not only about having a site. Social media platforms like Facebook, Snapchat, Instagram, Threads, and Twitter can be incredible places to connect with customers, too.
And guess what? You don’t need to be a tech genius to do this. There are several advanced tools and experts out there who can assist. The key is to ensure your business is where people are looking.
5. Build and Maintain a Cash Reserve
Money in the bank is like a safety net. If something unexpected happens, you have something to fall back on. It’s a simple idea, but it’s super important. When times were good, maybe it was easy to spend without thinking too much. But now, saving a bit of money here and there can make a big difference later.
Start by setting a goal. Maybe you want to save a certain amount by the end of the year. Once you have a number in mind, think about ways to reach it. It could be by cutting costs, finding new ways to make money or a mix of both. Every bit you save is one step closer to having a solid safety net for your business.
6. Explore New Business Opportunities and Partnerships
Sometimes, two heads are better than one. Partnering with another business can open doors you never thought possible. Let’s say you have a cafe, and your friend runs a bookstore. Why not work together? Maybe you can sell coffee in the bookstore, or they can sell books in your cafe. It’s a win-win.
Partnerships like this can help bring in new customers, share costs, and even make your business more fun. Plus, working with someone else can bring innovative ideas and energy. The world is full of possibilities, and sometimes, teaming up allows you to capitalize on them.
7. Re-evaluate Business Goals and Strategies
Goals give direction. They’re like a map for your business, showing you where to go. But what if the road has changed? Maybe it’s time to take a look at that map again.
Start by thinking about where you want to be in a year or even in five years. Are your current plans going to get you there? If not, what needs to change? It might be as simple as finding a new way to advertise or as big as launching a new product.
Remember, it’s okay to change your mind. What’s important is that you keep moving forward, even if it’s in a new direction.
Rebuilding after challenges can feel daunting, much like piecing together a puzzle. Yet, with determination, the right resources like the CARES Act, and a willingness to adapt, businesses can regain their strength. Embracing change, staying optimistic, and charting a thoughtful course forward can make all the difference. Cheers to resilience and every business embarking on this journey towards recovery and growth!