As businesses continue to navigate the turbulent waters brought about by economic downturns and market uncertainties, it’s crucial to take proactive steps to ensure their survival and success. In this blog post, we’re highlighting five financial initiatives that every business should consider during tough times, regardless of your situation.
So, grab your pen and paper because it’s time to dive into some actionable advice!
Initiative #1: Utilizing Government Financial Support
Government programs are a fantastic resource to utilize when you need to weather a severe economic downturn.
The Small Business Administration’s Paycheck Protection Program (PPP) is a popular type of financial support. It provides low-interest loans to small businesses that maintain their payroll during periods of economic uncertainty. The loans are 100% guaranteed by the government and can be forgiven if businesses use them for eligible expenses such as payroll, rent, and utilities.
Another example of government financial support is the employee retention credit. This was a crucial tax incentive that companies took advantage of during the COVID-19 pandemic. It not only helped employers keep their staff on payroll but also assisted with covering some of their business expenses, making it imperative that owners filled in an employee retention credit application as soon as possible.
With its help, businesses facing significant losses due to the pandemic can retain their valuable resources without having to worry about excessive costs and unexpected layoffs. It allowed eligible employers up to $5,000 per employee in refundable tax credit for retaining workers who cannot perform services because of several reasons. This would include workplace closure or reduced hours due to quarantine periods or significantly declining gross receipts.
Initiative #2: Reducing Costs Through Reorganization
There is never a wrong time to take a hard look at your organization’s structure and make changes that will reduce costs. One way to do this is by streamlining your management team. Do you really need all those layers of middle management? Perhaps you can reduce the number of managers and have them report directly to the CEO.
While this can be difficult to come to terms with, it’s one that will pay off in the long run. You’ll be left with a leaner, more efficient organization that is better equipped to weather tough times.
Initiative #3: Accessing Interest Rate Discounts
During tough economic times, many businesses are keen to access any available discounts on interest rates to make their business more financially viable. Financial institutions may offer special deals, so it may be worth contacting your bank to see if you’re eligible.
If your business is struggling financially, you may be able to negotiate a better deal with your existing lender. Whatever route you decide to take, accessing interest rate discounts can be a helpful way to reduce your costs during difficult times.
Initiative #4: Upskilling Your Workforce
Upskilling your workforce is essential as you would want to have a workforce with the necessary skillsets. There are a number of ways to upskill your workforce, including:
1. Offering training and development opportunities: invest in your employees by offering them training and development opportunities. This will not only improve their skillsets but also increase their loyalty and commitment to your business.
2. Hiring skilled workers: another way to upskill your workforce is by hiring skilled workers from outside of your business. This can be done through advertising job openings or working with recruitment agencies.
3. Utilising technology: technology can be used to upskill employees without them having to leave their current role. For example, online learning platforms such as e-learning can provide employees with access to learning materials at their own pace.
Initiative #5: Leveraging Digital Solutions
As the COVID-19 pandemic continues, businesses are looking for ways to adapt and remain afloat. One way to do this is by leveraging digital solutions.
There are a number of digital solutions that can help businesses during tough times. Cloud-based accounting software, to name but one, can help track finances and better manage cash flow. They can also use online project management tools to keep track of deadlines and progress on projects. Furthermore, social media and other online platforms can also be utilized to achieve maximum impact.
Digital solutions offer a number of advantages for businesses during tough times. They can help businesses save money, improve efficiency, and stay connected with customers and clients. If your business is struggling, consider leveraging some digital solutions to help you.
In conclusion, the economic environment of today means that businesses have to be smarter in how they manage their money. By implementing the above five financial initiatives, business owners can reduce costs and create a more stable foundation for future success. A savvy approach to finances during tough times is essential if your business is going to make it through difficult phases
unscathed. With budgeting discipline and these five financial initiatives – remaining financially secure doesn’t need to be out of reach.