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How Should SMEs Prepare Themselves for Recovery?

Business Recovery after COVID

The pandemic will have had different effects on different businesses. Post-Covid, many SMEs will be looking to regain some sense of stability. Preparation is essential, not just for recovery but also for growth.

According to recent research, giving the right kind of targeted support to SMEs could unlock around £140 billion of additional growth in the UK economy.

This would create more jobs and aid productivity and sustainability.

What steps do SMEs need to take to put themselves firmly on the path to recovery?

Assess the Damage

The return to something approaching normality is deceptive. Even if a business is now trading again, it may have to account for months of missed opportunities and no income.

Some of this damage might be staring you in the face, but some will involve a deeper analysis.

For example, you can look at your profit and loss figures and your cash flow and get a clear idea of what's not been working for your enterprise during the pandemic.

But consider other factors too, such as the marketing budget you’ve had to cut, the employees you’ve not been able to retain or the customers you’ve lost.

When it comes to preparing for your recovery, you should look at all the financial angles and work out what you’ll need to spend to win back business.

Will you need to cover the costs of debt repayments incurred during the pandemic alongside finding fresh investments to fund your recovery activity?

Revisit Your Business Plan

Go back to basics. Take a careful, detailed look at your current business plan. It is unlikely to have factored in the level of disruption caused by Covid-19. You’ll therefore need to fine-tune it.

Adjusting to the new normal is challenging. Restrictions will have hampered some areas of the economy, such as hospitality, but other sectors and industries will all have had to adapt in some way.

If your business has been a bricks-and-mortar model primarily, in what ways can you further shift towards a digital model or a hybrid of the two?

What resources will you require to rebuild your business? Think about how you will target your markets, and how those markets may also have changed as a result of the pandemic.

Examine the wider context of your industry and how your competitors are faring. It may be that new gaps have opened up and there are ways for you to explore different niches in the market.

Re-assess your business’s strengths and weaknesses. What worked before may not work as well now.

Finally, look again at your business goals. They may no longer be realistic in the current climate. If you're going to plan your recovery effectively, you must have attainable goals.

Set Out Your Funding Requirements

To make money, you’ll need to spend it. Delve deeply into your budgets and understand what you’ll be budgeting for to support your recovery.

Financially, you should be aiming to eliminate waste and develop a lean operating budget.

This can be tough, which is why exploring alternative funding options could be the lifeline you’re looking for.

You may find funding and investment through more conventional channels too restrictive or slow.

But borrowing can be more competitive and flexible through methods such as invoice factoring, asset finance, short term and unsecured loans.

Preparation for recovery requires open-mindedness alongside determination. The more willing you are to explore fresh options, the greater the chance you’ll be giving your business to grow and thrive.

For more details about alternative ways of funding your business recovery, please call us on 0161 724 2424, email or complete our contact form.

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