6 Ways to Rebuild Your Salon After Covid-19
1. Assess the Damage
Developing a rebuilding plan for COVID-19 is determining just how deeply your small business has been affected. There are different layers involved, starting with the numbers. If you have not updated your financial statements recently, such as income or cash flow statements, you should be doing that now. You can compare them to last year’s numbers to see how much your business might be struggling. Aside from the hard numbers from sales, profits, and cash flow, consider other ways your business has been affected. For example, if you had to lay off some or all of your employees, you will need to factor that into your rebuilding plan and when you intend to re-hire. If you have cut your advertising and marketing budget, or some of your customers have migrated toward your competitors, then those are things you will need to account for as you identify financial resources to help you recover.
2. Take Good Look at Your Business Plan
Your business model may have worked perfectly fine pre-COVID-19, but coming out of it may mean you have to readjust. You may need to consider how your business can pivot to adjust to a new normal. For example, if you previously relied on foot traffic to a brick-and-mortar location for retail sales, you may need to look at a digital expansion to accommodate the higher numbers of people who are shopping from home. Creating an e-commerce store can help you to continue to have retail sales from your customers. When going over your business plan and business model, you will want to identify your business’ strengths and weaknesses. Next, look at what was working before and ask yourself, will this continue to work? If the answer is ‘no’ or ‘not sure’, what are some areas you can adjust or improve to remain competitive. Don’t forget to revisit your business goals to make sure they’re realistic, given the current circumstances.
3. Consider Whether You’ll Need Funding to Recover
Unless you had a large amount of cash on hand going into the pandemic, you likely need some working capital to jump-start your business operations coming out of it. When it comes to financing your small business during COVID-19, there are a few options to consider. The Paycheck Protection Program, , for example, is designed to provide funding to small businesses that are struggling to retain their employees during the coronavirus pandemic. Economic Injury Disaster loans also can help with short-term financing if you need money for things other than employee retention. The challenge with these programs is that the funding is limited. It is possible that funding may be depleted before your application for a loan is reviewed. It is important to consider other sources of small business funding, including:
- Small business term loans from banks, credit unions, and online lenders
- Business lines of credit
- Business credit cards
- Vendor tradelines
- Accounts receivable financing
- Merchant cash advances
- Inventory financing
- Purchase order financing
- Equipment financing
4. Revamp Your Budget to Account for New Spending
Coming out of the COVID-19 pandemic, you may have to spend money before you can make money. As part of your recovery strategy, you should have a clear idea of what you need to be budgeting for and what you can cut to make the most of the revenue you do have coming in. The goal is to eliminate the waste and get your operating budget as lean as possible so that when the chance to invest in your business when growth comes up, you can take advantage of the opportunity.
5. Develop a Timeline for Rebuilding
You may have several things you need or want to do to recover following COVID-19, but doing everything at once may not be realistic. Creating a timeline to follow that prioritizes your most important actions first. Your immediate goal may be securing funding for your business. Once you have done that, you can set a timeline for re-hiring employees, then restocking inventory, and, finally, reopening your doors. As you take small steps toward recovery, remember to track your progress. This is particularly important if you secured capital to fund your business because you do not want to waste time on activities that are not delivering a solid return on your investment. In the initial stages of your COVID-19 recovery plan, you may want to check in with your cash flow and budget weekly to see what is working and what is not. Later, you can shift to reviewing your business financials monthly as things begin to stabilize.
6. Create a Contingency Plan for the Next Crisis
While the coronavirus pandemic may seem like a once-in-a-lifetime event, the reality is that an emergency can come along to disrupt your small business at any time. Using what you have learned during the current pandemic to prepare for the next crisis can help you insulate your business from future shocks. For instance, building up cash savings may be a priority for your business if you had little or nothing set aside before the COVID-19 outbreak began. Or you might want to focus on paying down your debt and trimming nonessential spending to keep your budget in check. Or you may need to find ways to help your staff work more efficiently to cut down your operating costs. Having a backup plan can help improve your business’ odds of surviving—and eventually thriving again—during tough financial times.