Finance Experts’ Advice on Remaining Lucrative Amid Crisis
As a business leader, you should always be prepared for uncertain situations and unexpected challenges. A recession strikes when least anticipated. That’s why finance experts suggest creating an emergency plan before the disaster arrives. Coronavirus won’t pass through without having long-term effects that’ll leave behind a harsh economic environment. The consequences of a fiscal crisis make survival difficult for companies, and they struggle to stay afloat. When a recession threatens your company’s profitability, it’s time to seek alternatives. So, here’s a brief compilation of suggestions financial experts deem feasible enough. Their advice will help organizations grow during an age of economic depression.
Business tactics to remain profitable amid crisis
- Focus on revenue-driving activities:-
The recession calls for income-generating activities that ensure that your business remains lucrative. Hence, focus on sales calls and email marketing. Reach out to existing clients and attract potential leads. Since spending on retargeting will only be a burden on your finances. Hence, finance experts recommend embracing portfolio diversification and strategic alliances. Also, don’t hesitate to follow up with potential clients. Try both direct and indirect revenue-driven activities.
- Map out a long term financial plan:-
Remind yourself that this crisis won’t last forever, but you still need to create a long-term financial plan for staying lucrative. This plan shall outline your future business operations with the premise to adapt. Adaptation is imperative for survival mid-crisis. Next, you should focus on business process reengineering to identify where costs are incurred excessively and remove overhead costs that aren’t necessary. However, to carry out such extensive work, you might need to hire finance experts. You should seek graduates with an MBA with accounting concentration online to join your company. Their financial expertise will help you escape this recession efficiently while retaining your existing customers.
- Eliminate extravagant expenses:-
The pandemic calls for an end to all extravagant expenditures and a return to austerity. Companies must strive to curb wasteful spending if they wish to thrive amid a crisis. Many pointless spendings will come as a shock to you, such as paperwork. Eliminating paperwork and decreasing the number of printers you have will help you save money. Also, don’t organize out-of-city conferences when you can use a Zoom meeting option instead.
Similarly, don’t hire full-time employers when freelancers are available. Moreover, you should invest in automation to reduce human error and speed up business activities. Saving money helps the business endure the onslaught of a crisis.
- Monitor Budget:-
You need to monitor your budget and reassess the company’s budget allocations. It doesn’t matter if you’re spending on promotional activities or digital marketing campaigns. The company needs to reconsider where their money goes. Since recession compels business organizations to alter their traditional budget distribution, a simple principle guides your mid-crisis expenditures, i.e., fund well-performing channels. Also, reallocate according to which departments are the most profitable.
- Outsource support functions:-
You should consider outsourcing support functions (such as IT, payroll, and customer service) amid a calamity. This technique allows you to focus on your central competencies and core functions. In 2019, over one-third of SMEs outsourced at least one business function, while 50% of them planned to outsource in the future. It doesn’t just reduce operational expenditures but also contributes to a rapid organizational transformation. Therefore, hiring external experts helps you run the company smoothly. Interestingly enough, most activities companies prefer to outsource are related to IT. You can acquire access to the intelligence the company needs to survive in this time of crisis.
- Attract good investors:-
Crisis or no crisis – you’re always attempting to contact potential investors. There are two essential components of attracting investors, i.e., communicate with them and motivate them to learn about your company. Investors will consider your business only if it stands out from the crowd. That’s why it’s essential to never stop marketing even amid a crisis. Consider soft-selling your services while visiting events via your networking skills. Schedule a meeting, pitch a quick ROI during the pandemic, and show them evidence that your idea works. And what’s better proof than maintaining sales and running a business smoothly amid the pandemic. Remember that it’s better to meet face-to-face to maintain a human touch.
- Manage debts and taxes:-
Economic depressions force companies to rethink their debt management strategies. Organizations that fear bankruptcy often seek expert counseling for financial assistance. In contrast, others depend on traditional techniques to repay their debts. They control their cash flow and increase the repayment frequency. IMF observed a staggering increase in the public sector debt that reached over 120% of developed countries’ GDP (on average). So, companies must conduct careful research by comparing interest rates to find the most favorable ones. Also, they should anticipate payments and consider debt consolidation as an eventual escape route since this trick makes debt more manageable.
- Embrace FinTech:-
SMEs are relying on fintech (financial technology) to recover from the coronavirus’s impact. Fintech isn’t just an industry buzzword anymore since 96% of global consumers are aware of it. It also offers enhanced transparency, more convenience, and different alternatives. For instance, companies can present their websites in multiple languages. No wonder Fintech apps observed a 72% rise in usage last year. Finance experts recommend incorporating fresh fintech-based approaches to recover the global economy once the pandemic ends. Fintech lenders can replace the traditional lending model and issue loans in 24 hours. Cryptocurrency, too, has already crept into Musk’s business empire.
Conclusion
The COVID-19 recession proved severe because it coincided with the 2020 stock-market crash, bringing unemployment in its wake. This recession devastated the global economy. The World Bank estimates that many regions would recover from this crisis after 2025. Whenever disaster strikes, companies must identify challenges facing their business. Since a problem affects every organization differently, they should consider how their rivals and other entrepreneurs tackle this depression. Afterward, it’s time to look for the signs of distress. These symptoms will show how much you’re suffering from the crisis. You should – even during a crisis – never stop marketing and offer smooth customer service.
