What COVID-19 Has Taught Small Businesses
Apart from figuring out how to not lose your mind at home, these past few months have been a new experience. From learning how to ration your snacks to keeping 6 feet away from the closest human, it has been a lot of firsts. Businesses have also had to drastically change how they operate in order to survive.
According to a recent report from the National Business Survey, 93% of small businesses report major takeaways including having cash, reducing debt, and getting rid of unnecessary expenditures. While these are definitely important takeaways, businesses that have a strong social media presence and can quickly shift to working remotely have proven to be better suited to weather the storm.
Cash, Cash, Cash
Having cash savings on hand can make your business more resilient to unprecedented changes. With the recent pandemic, it is estimated that more than 100,000 small businesses have permanently shut down. Having positive cash allows your business to stay flexible enough where you can make sudden changes which ensure you can stay operational for longer.
One way to have more cash is to make sure you are getting paid on time and reducing overdue payments. As many businesses shut down, this profoundly affects other businesses as any overdue payments will go unpaid. Businesses have learned that positive payment behavior, such as having overdue invoices paid, can make or break a business.
The business world will most likely never be the same after COVID-19. The ability to rapidly restructure your business to work remotely has proven invaluable and places businesses at an advantage. This capability has allowed businesses to continue to operate for longer and not have their cash flow interrupted. Imagine the advantage that businesses that can accept payments electronically have, over businesses that receive payment via check, and through the mail. For those businesses, if their offices weren’t open, it would be difficult to receive payment.
Global Workplace Analytics predicts that by 2021, 25-30% of the workforce will work from home, multiple days a week. This is significant, considering that 56% of jobs can be done remotely. One great example of remote work being effective is in the accounting industry, specifically with the cloud based accounting departments. Instead of having to shut down due to having to work from a central office location, with specific equipment such as company computers and printers, those cloud based departments can operate and collaborate using virtual tools located on the cloud.
Social media and online interactions spiked during the stay at home orders, with many companies focusing on increasing their online presence. According to a recent report released by Facebook on the state of small businesses, 51% of businesses increased their online interactions with their customers during this period. Also, as online use increased, businesses that provided ease of payment online received more traffic than those that didn’t, with 35% of businesses changing their operations to include digital payment.
This proved to be an important lesson for most, as online shopping increased during the quarantine period. In fact, E-commerce spending in the US actually increased from the beginning of March to Mid-April by 30% compared, to the same period the year before. Businesses also found that ease of payment, such as offering multiple payment options, along with the use of payment portals, create a seamless and memorable payment experience.
Perhaps one of the most important lessons learned was how crucial it is to cut unnecessary spending when possible. Reducing spending can be invaluable since you can shift your resources to higher grossing activities which will have more benefit in the long run. Sure the office's subscription to Italian coffee is great but is it necessary? The benefits of reducing spending are rather self explanatory but can not be looked over.
COVID-1919 has undeniably been challenging for businesses of all sizes, with 52% of personal businesses reporting that they are not currently operating. However there is still a positive outlook amongst small businesses. 57% of small businesses claim that they are optimistic about the future of their business. While the pandemic has brought about an unprecedented economic impact, businesses have proven to be resilient.
Overdue invoices negatively affect cash flow. 82% of businesses fail due to cash flow issues. Biller Genie is a cloud-based solution that automates accounts receivable from bill presentment, to follow up, collection, and reconciliation - without changing your current process. The Genie does all the heavy lifting for you with no new software to learn, it easily integrates with your accounting system, and you get to keep your existing payment processor. As a result, our average subscriber sees a reduction in outstanding balances by 40% and gets paid up to 15 days faster. We wish to take away the headaches involved in accounts receivable. Click here to learn more.