There is no denying that the COVID-19 pandemic has had a unprecedented impact on small businesses worldwide, regardless of their location. Due to the disruption caused by prolonged lockdowns, most SMEs were experiencing cash flow, debt, and manpower issues.
Consumer buying and spending patterns have changed forever – Small businesses are shutting down and facing an existential crisis. The situation is especially severe for hotels, cafes, and restaurants, as well as fitness and wellness centers such as salons and spas, gyms, and other professional services. Stringent government regulations, serious financial struggles, and a loss of customer demand all played a significant role.
Nontraditional mediums are picking up – Ordering takeout or delivery and online shopping from retailers has become the new normal in this age of social distancing. Since the pandemic began, the “Buy local” slogan has been getting popular to persuade individuals to support local businesses. As SME’s planned to substitute in-person dining with deliveries, they needed to tackle questions about the earnings and viability of the move, including assessments of employee wages, auto insurance, and managing tips. As your local accountant in Northern Beaches and Greater Sydney, we assisted businesses by providing guidance on a wide range of solutions.
Online presence is now an absolute necessary for survival – Small businesses going online is one of the most significant trends to emerge during the COVID-19 pandemic. Many businesses have begun to implement new e-commerce interface that lets them to create online stores. Previously, many businesses had no online presence. Undoubtedly, the internet remains a vital resource for many small businesses, allowing them to stay in business during the pandemic.
Using a variety of social media platforms for sales and marketing – Big companies like Facebook and Instagram have jumped on board to help small businesses by offering food delivery, gift card stickers, and small business grants. Many businesses have even adopted cyber tools such as digital ordering tools, digital payment tools, online advertising, online service delivery tools, and so on, according to various business surveys. Small businesses have been working hard to sell and market their products online in interesting ways. As your local accountant in
More need for data to identify changing trends, expectations and profit margins – Again, while these new channels will not replace all of the lost business, they will help. And for many small businesses during this period, this is the difference between survival and failure. But how can the effectiveness of online selling for SMEs be measured? Real-world data is required for business owners and entrepreneurs to make real-time changes to their strategy. This has the potential to make or break their commercial ventures. As your local accountant in Northern Beaches and Greater Sydney we can assist businesses in developing accurate financial projections to determine viability of changing their business strategy.
Businesses now need to be more agile –Businesses today must be able to think on their feet and adapt to changing conditions. Many businesses are fighting for survival, as others have shut down operations and laid off workers. Businesses are working hard to be resilient and find new ways to reach out to customers online while maintaining sales.
Adopt technology, such as cloud accounting – This is an urgent requirement. Internet-based services scale to your usage with little to no adjustment, allowing businesses to handle more workloads. It also assists small businesses in lowering total costs because there is no need for infrastructure/hardware costs or hiring personnel to manage the software. This means that business owners can adjust resources more quickly to meet unpredictable demand. As your local accountant in Northern Beaches and Greater Sydney we can assist you in implementing and training in cloud based accounting software.
Cash has become increasingly important–Because having less cash on hand creates uncertainty about the future, the financial fragility of businesses emphasizes the need for cash. Many businesses may experience cash flow disruptions as a result of the ongoing market turmoil caused by Covid 19. Many business owners have taken out loans while also borrowing from friends and family to keep solvent and avoid layoffs and shutdowns.
Work closely with your business advisors –Because the pandemic is still prevalent, it is unclear how long the uncertain times will last; therefore, accountants are playing an important role in maintaining business continuity and finance. We understand that accounting is unique during each stage of a business life cycle and hence we serve as financial advisors, HR/Payroll assistants and also look after you day to day bookkeeping.
Make sure your financial data is current, up to date so that important decisions can be made –As a result, it is critical for businesses to be proactive in assessing their vulnerabilities and risks from both an operational and financial perspective. The SME that was unable to maintain financial data and failed to update and comply with accounting standards has been struggling to survive a financially difficult year.
Have systems in place that can act like early warning systems and provides you with Red Flags in different parts of your business-The challenge for firms now is to capitalize on the opportunities created by the crisis and bring them forward into the future with safeguards in place to prevent financial failures.
Thus, even after two years of the pandemic, there are still lessons to be learned, wisdom to be applied, and examples to be followed. Because COVID-19 has a direct impact on business continuity, businesses must act decisively to mitigate risks and plan for recovery scenarios, as well as liquidity implications.
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