How Advisory Services Saved Small Businesses During COVID-19
Sometimes you need a little guidance when things get tough. The COVID-19 pandemic has certainly presented challenging situations for most small businesses this past year and will probably continue to do so for some time into the new year. Advisory services have saved small businesses during COVID, helping them to survive and succeed. Learn more about how advisory consultants can help your business during these trying times.
Pivoting the Business Model
Small business owners, particularly those who depended on face-to-face interactions, found that they had to quickly shift their business model in response to the pandemic and its accompanying restrictions. Small businesses that were able to change directions were better able to succeed when they had taken advantage of advisory services that helped them make sound business decisions. Those who weren’t able or weren’t willing to make the shift ran the risk of going out of business.
In fact, according to the Society for Human Resource Management (SHRM), the number of active business owners fell by 3.3 million between February and April 2020 in the US. SHRM conducted a survey in June 2020, which confirmed that staying in business during COVID-19 required new approaches. Almost half of the 416 small businesses with 500 or fewer employees participating in the survey reported they found ways to stay in business. Their adjustments included:
- Using contactless deliveries to make their services available.
- Asking employees to learn new skills to support changes to the business models.
- Adopting new revenue streams, such as converting production lines to make hand sanitizer, which is in high demand.
- Instituting new safety measures, such as installing Plexiglas barriers between staff and customers.
- Adopting new technology processes.
Businesses with 100 to 500 employees were more likely to adopt new revenue streams, new safety measures, and new customer service and delivery processes than those businesses with fewer employees.
Finances and Financing
Being prepared to make these shifts, pivoting the business model to accommodate restrictions and safety measures during COVID-19 while also finding a way to remain solvent, depends on a thorough understanding of your finances. It also requires knowledge about how to obtain financing that has been made available to small businesses during the pandemic. Advisory services saved small businesses during COVID-19 by helping them get a clearer picture of where they stood as well as the direction in which they could feasibly take their business during the challenging days and months of 2020.
Research conducted by McKinsey shows that businesses are resetting by prioritizing business building for organic growth, launching new businesses, and growing their businesses in response to the changing environment created by COVID-19. The strongest businesses are reinventing themselves through what McKinsey refers to as “next-normal operating models.” Understanding how to move your small business forward is critical for success in the new year. Advisory services can help guide you through the process.
Professional Business Advice
The COVID-19 Business Impact Center at the Harvard Business School lists some advice for small businesses. Advice from Mark Cuban, successful entrepreneur, includes:
- Accept the reality and quickly take action. You can’t be paralyzed by anger, anxiety, and fear.
- Communicate in a transparent manner with everyone and anyone to whom you owe money.
- Be brutally honest with everyone.
- Prioritize connection over selling. Instead of pushing sales, build the relationships you already have. Check in on your accounts without the expectation of closing deals.
- Become an expert in small-business loans. Don’t expect your bank to hold your hand.
Advice from Zoe Cullen, Ed Glaeser, Michael Luca, and Chris Stanton, authors of A Way Forward for Small Businesses, states:
- Don’t rush your decisions but do make plans.
- What you can (and should) do right now is start making detailed contingency plans. Research in social psychology and behavioral economics has documented the ways in which making plans helps people achieve goals. Break your big goal into smaller goals and focus on achieving those.
- Figure out how your customer needs have changed. People are building new habits.
- Do some realistic accounting. Form realistic expectations of your cash flows. Figure out which expenses can be delayed. Stay abreast of other forms of public assistance.
Advisory services have helped small business owners just like you make the sound financial and operational decisions that made a difference in their success during and beyond the coronavirus outbreak. Advisory consultants will review your financial statements to analyze trends and identify new opportunities for your business to not only survive, but to become more profitable.
THE ADVISORY CONSULTANTS AT CLEAR VIEW BUSINESS SOLUTIONS CAN HELP YOUR SMALL BUSINESS
The accountants and bookkeepers at Clear View can put your business on the path to success during COVID-19. As your advisory consultants, we will analyze your current business model and give you solid advice on what you can do to shift in response to the pandemic. Learn more about how our advisory services can help you and your business by contacting Clear View Business Solutions to speak to our team about our services. Give us a call at (520) 544-0177.