The COVID-19 outbreak has been one of the largest scale events to halt the economy and change the dynamic between consumers and brands. In the past, consumers could come into a store to buy something, they could go to a restaurant with their loved ones to eat a meal, and they could safely go to work every morning without worrying about a rogue virus. That all changed in what seems like the blink of an eye.
Small businesses throughout Canada are being forced to stay shut in order to abide by quarantine and physical distance rules set by the Government. The idea, and the hope, is that if the public stops going outside and coming into contact with each other, the outbreak would slow down and lives could be saved.
It took small businesses less than a second to realize how much trouble this would mean for their balance sheet. No more foot traffic on the streets means less store visits, which means less sales, which means danger ahead for the business. Communities and associations began calling on the Government to act quickly in offering a safety net for small businesses to prevent them from going out of business. The Government complied and now there are several support programs laid out with different features like the CEBA program providing interest-free loans or the CECRA program providing rent relief.
However, amidst all the support programs that are being deployed, small businesses should still be thinking about ways that they can generate or free up some of the cash flow they had pre-COVID. We’ve taken the time to lay out 4 different ways you may be able to open up your cash flow once again until things cool down and consumer behavior returns to normal.
- Take your business online
What if your business didn’t require physical interactions with your customers? What would it look like?
It is now more important than ever to be thinking about going digital with your business if you haven’t already done so. There are many options for creating new revenue streams online and there is plenty of infrastructure from companies like Shopify that let you take advantage of a user’s online purchase behaviour.
If you’re a brick-and-mortar store with a location that is closed but you can still deliver, consider moving all your efforts to your website and developing an email and advertisement strategy to start bringing in paying customers.
If you’re a recruitment agency and things are getting hectic with your online team, consider creating and selling an online course on “How to Get Hired During an Economic Downturn”. Not only would this produce clients you can follow up directly with, but the revenue from selling an online course can become significant if promoted properly.
If you’re a gym or fitness studio, consider offering live personal training sessions over video to your loyal customers who were coming in every week before the outbreak. The revenue that you can generate from live sessions could help your business stay afloat while retaining the loyalty you’ve built with your customers and adding some brightness into their day being quarantined at home!
There are many ways to bring your business to the digital world and start producing revenue from your brand’s online traffic. More people than ever are browsing around now for content to engage with and for some semblance of normalcy to return to their day. For some customers, that means ordering their usual meal from the deli and getting it delivered, or meeting with their personal trainer for live sessions every week. Understanding that your customers want some normalcy back in their day is the first step to figuring out how you can provide that to them and produce cash flow for your business.
- Organic marketing
Organic marketing simply means doing marketing exercises that require little to no spend. It can be as simple as making a social media post or sending out an email talking about what your company is up to during the quarantine - it also helps your customers stay in touch. You likely collected customer email addresses in the past as part of your service. If you did, now is the time to use them to connect with your consumer base.
You can use social media and email marketing to promote discounted products and services that you’re selling. One of the other possible solutions would be to sell digital gift cards to your customers as this will provide you with immediate cash flow and will delay the need for inventory management until that gift card is used. Many customers are looking for ways to support their favorite small businesses during this outbreak and if they saw a social media post promoting your new digital gift cards, they may purchase one!
The rhetoric of this strategy is to use low-cost ways to stay in touch with your clients and promote what your business has available during the quarantine. Organic marketing can sometimes be overlooked since it is generally a long term strategy that produces results over a long period of time rather than a short burst of increase in sales. However, all of the effort your business has put into keeping your social media and your emails active now have a big opportunity to pay off so use it to your advantage.
- Working with your suppliers
This is a good time to take a hard look at your business liabilities, such as your accounts payable, to see where you may be able to negotiate a relief on your cash flow.
Many small businesses have specific suppliers and vendors that they regularly buy from in order to operate their business. Now will be a good time to reach out to them and rely on the relationship you’ve built over the years to see whether you are able to extend your usual payment terms or if you are able to get a grace period to help ease the crunch on cash flow.
That being said, one important thing to keep in mind when doing this is that your suppliers may also be small businesses struggling to stay afloat. Remember to approach the conversation with the knowledge that your supplier may be suffering just as much as you are.
Lastly, Don’t Forget the Government Programs
Thinking about ways to produce cash flow for your business is an absolute must right now. Taking the plans you’ve laid out for the next few years and tweaking them to see what are the next steps to keeping your business afloat and thriving during hard times. Another essential thing you should be doing as a business owner is applying for the government support programs.
There is no quicker way to obtain cash flow for your business to stay afloat than applying for the government programs that are available out there. These programs are designed for small businesses like yours and can be the difference between going bankrupt tomorrow or living through the crisis.
Read more about the Government funding programs here:
- CEBA: Interest-Free Government Loans
- CECRA: Rent Relief
- CEWS: Wage Subsidies
- BCAP: Borrowing Cheap Debt