Bet You Wish You’d Put Aside Money For An Emergency Now?
It is, of course, easy with hindsight, but this lockdown should make business owners realise as never before the value of having an emergency fund. If you have one you’ll appreciate it – if you don’t, you should take this as a wake-up call to start planning for the next crisis. There is always another crisis, and as Winston Churchill is famous for having said: “Never waste a good crisis”.
If ever there was a time for an abundance mindset, this is it. When everyone is grumbling about not being able to buy alcohol, rather use this time as a franchisee to take stock of your business.
This crisis is an opportunity to put some distance between your franchise business and the opposition. When we come out of this lockdown, will you be on the front foot and ready to sprint, or needing another week to re-orientate yourself to work matters? Take this time to reassess how to operate your franchise in what may be much changed business conditions and come up with fresh ideas. Now’s the time to start strategising on the opportunities post-COVID-19.
Here are some ideas to get you started:
- Go through your budget: you are probably going to be earning little revenue during this time, so your budget will need a thorough overhaul. Now is the time to undertake a ruthless cost cutting exercise. While in lockdown, it is likely you will save costs on expenses such as fuel, but you also need to look closely at your major items such as salaries and rent. Remember, a lockdown is a force majeure by which the government changed the law – and some expenses you legally won’t have to pay, specifically full staff salaries. However, bear in mind that taxes such as VAT remain fully payable. Failure to pay VAT will put your business in default and you will lose your tax clearance. Without a tax clearance certificate you can’t apply for bank or other funding and if you are in the B2B market, you could stand to lose customers who require their suppliers to be tax compliant. The only tax break you may apply is to defer 20% of PAYE due and there is some relief for provisional company tax. Speak to your accountant or your local SARS office to make sure that you remain compliant during this time. *
- Find where you’re wasting money by going through your last three months’ bank statements carefully, paying careful attention to bank charges and transaction fees. Double-check all your debit orders to ensure that they are correctly accounted for. At the same time, clean up your online banking by deleting old beneficiaries, linking cards, updating your profile, and securing your passwords.
- If you have an emergency fund, develop a strategy as to how best to use it for survival purposes. We do not know how long this lockdown will last and, therefore, think carefully about how your emergency funding can be stretched to see you through these tough times. Be as conservative and cautious as possible.
- Re-evaluate your personal goals: Revisit your medium- and long-term financial goals. Give thought as to what is important to you in this time of crisis – your future dreams and goals. Now is a good time to take stock of where you are, where you want to be, and what needs to change in your business for you to get there.
- Talk to your bank: If your income has been or is likely to be affected by the pandemic, talk to your bank and/or creditors today. Most banks have announced measures to assist customers with loans and debt, so be forward about contacting your bank to make arrangements. Apply for an overdraft if you don’t have one to mitigate cash flow concerns, as many of your customers or clients may delay payments due to their own financial distress.
- Reach out to your clients, be visible online even though you are shut and let them know you are there. You can actually strengthen the human element of your business in an honest and heartfelt manner, and bond with them as people, not just business.
- Reassure your clients you are following all recommended safety guidelines, and encourage them to do the same for their own safety.
- Develop a marketing campaign to boost post-lockdown sales, talk to your franchisor about their plans for national campaigns and see how you can plan for local marketing to get your customers back to buying from you when lockdown is over. If you are not an essential service, plan your marketing and how you are going to execute it. Many consumers will remain careful of social contact, so you may need to introduce delivery as part of your offering. If your business is service based, consider what you can do to take it online eg online consulting or training programmes.
There is bound to be a ‘new normal’ after this. Anticipate this by adapting your business model (of course in alignment with your franchisor) so as to minimise the need for physical contact. Be prepared to do business differently, and tell clients/customers it will not simply be business as usual.