Best Budgeting Tips for your Business during Crisis
1 July 2020 3minutes read
Reading Time: 3minutes
The pandemic and the course that it has taken globally, is bringing about a lot of uncertainties. The travel bans, ticking cases, lockdowns, dipping GDP, and so on has a direct link to how your business operates from now. As a start-up ourselves, we know how we are balancing the staff and the workload, keeping the profits flowing in. It is really troublesome for all businesses to keep up with the economic condition during the period.
So, here is a short article suggesting some effective budgeting tips, to help the supply of revenue during the coronavirus outbreak and a major economic imbalance, globally.
Budgeting tips during a crisis
Most businesses are facing major negative effects due to the present state. Irrespective of how well established a business is, all of them are looking for a change in their plan to cope with the given situation.
So, obviously, the entrepreneurs have to be a bit more reactive to the lockdown situation. They can start by following the given hacks and budgeting tips to survive the economic damage done by COVID-19.
Review the expenses against revenue: It is crucial for businesses to review their expenditures and revenue. This will help you to comprehend the present economic status of the business and decide accordingly for the forthcoming days. This can be done by:
Noting down the revenues and the period at which they were generated.
Adding the cost of production for each produced goods.
Calculating the gross margin value of the sale by subtracting the cost of items sold, from revenue generated.
See if the margin value has changed.
Calculate and add up the cost of marketing.
Shorten the comparison period of the accounts from years to months.
In essence, improve the cash flow of your business.
Review of the viability of the business policy: The markets have become uncertain due to the lockdown. So, it is important to check if the business model that you have been following, has the potential to survive. Here is what you can do:
Analyze the changes in the pattern of new sales.
Check out for bad debts.
Study the changes or shifts in the customer base.
Chalk out plans for the next few months: The global lockdown situation is very hard to predict, so it is safe to plan the budget ahead for the upcoming months. For example:
Cut down expenditures.
Halt the process of hiring new staff.
Keep advertising minimal.
Renegotiate the fixed expenditures.
Secure investments: Capital is the mother of every business. As a result, the source needs to be at hand, especially for now. The best way to do this is by securing investments and generating revenue out of it. So what you can possibly do is,
Utilize your saving to launch and grow initially.
Keep a realistic plan ready, to attract the investors.
Recruit a hard-core team or better a product development company to materialize your idea to product. The MVP Program by TheCodeWork fits right into this role.
Conduct research on your targeted investor before you approach them. It will help you to prepare the plan in a better way.
Investment is a delicate part and so be patient with it. Nevertheless, Investors are expected to be cautious and more reluctant, owing to the present situation. But let’s not be too worried about it. If we go by history, businesses and markets have always bounced back in the worst of situations and economic pitfalls.
Digitization of activities: Digitization of activities refers to the transfer of data from offline to the online mode. It is about ensuring a digital presence for your company. Moreover, with the social distancing norms, this is soon to become the major priority. You will get a related article on this topic on our website, as well.
Use online banking for cash flow.
Go digital with advertising to reduce the cost of offline advertisements.
It has been seen that many businesses fail to secure their economic status even after following illustrated guidelines and other budgeting tips. This is because most of them need additional economic support to survive the lockdown. Luckily, a number of states, local, and federal funded programs have been launched recently to assist small businesses to survive the economic fallout until the lockdown ends.
However, the enlisted guidelines and budgeting tips are what we have been following ourselves and the end result is fortunately positive as of now. If you want more articles related to this topic, do follow our site, TheCodeWork
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