COVID-19 has had devastating effects on numerous businesses in Canada, especially the ones operating in the food, entertainment, sports, airline, and travel industries. Many business units have had to close permanently, and others have been forced to reduce expenses by laying off employees.
Thanks to the dramatic changes in the business world, companies have found themselves operating in an entirely new environment. Nevertheless, not all businesses have been equally affected.
Enterprises that make popular video games and computer manufacturers have seen significant increases in sales. In addition, stores that carry hardware, cleaning products, exercise gear, groceries, and personal protection equipment have also been in the black. Moreover, brick-and-mortar businesses have begun to establish work-from-home setups, technology has been increasingly used, and some companies have devised innovative ways of operating.
This crisis has also turned out to be beneficial for some small enterprises, as new COVID business opportunities have emerged. These businesses have made substantial adjustments in their business models due to pandemic-related constraints, which has allowed them to meet their customer’s needs during this challenging time. In fact, a recent survey of small business owners has found that 54% of respondents believe their strategic shifts have had positive or very positive effects on their operations.
The survey has also found that 48% of small business owners have begun selling online, and 33% plan to continue doing so once the pandemic is over.
In essence, companies that had a strong leadership and a solid value proposition tended to be more adaptable and agile, which translated into an acceleration of the growth. Other companies that were slowly wilting like a flower without moisture, had an accelerated demise during Covid.
With COVID-19 impact on business, multiple industries were forced to adapt their operations and respond to new social-distancing guidelines. Here are some characteristics of the businesses that prospered during the pandemic:
According to a recent survey, 77% of Canadian small businesses are optimistic about the future. In the midst of the pandemic, some enterprises have been able to adapt and redefine their priorities. Here are some of their strategies.
Everyone knows that the dynamics of the business world are constantly changing. Taking action without panicking and adapting to challenging circumstances when they arise will help you and your staff remain positive.
Even though you may be concerned about running out of funds in case another COVID-19 wave strikes, you need to stick to your plan. By thinking things through carefully, you will be able to make serious business decisions in the future. And remember — clear leadership is of utmost importance.
A few programs available to small-business owners in Canada can provide immediate relief. One of them wass CEBA (the Canadian Emergency Business Account), which offered up to $60,000 in interest-free loans to businesses. The government will forgive $20,000 of the loans, if they are repaid by December 31, 2023.
Furthermore, some financial institutions and government programs offer credit card payments and mortgage deferrals. However, there are disadvantages to this approach since the debt will ultimately need to be paid back with interest. If possible, you should consider refinancing your loans and lowering your payments.
As COVID-19 has shown, curveballs can come at any time, so it’s imperative to always be on the lookout for what’s next. Many businesses that have adapted to the pandemic have been successful. Still, even if your own business is doing well now, it would be a mistake to become complacent — it is crucial to plan for all possible outcomes.
Companies seeking to diversify their revenue streams can offer online ordering or delivery services. Marketing is another area to consider. Of course, we shouldn’t disregard social media, either, as it has helped some businesses gain customers they would have never reached otherwise.
Having an emergency fund for your business is essential. Generally, it is best to set aside three months’ worth of expenses. Creating this fund doesn’t mean you should put aside all your income, though — just enough to cover your fixed expenses.
In the event that you generate a substantial amount of revenue, building an emergency fund or paying off any existing debt will be an immediate benefit to your business. As a small business owner, your financial health is often closely related to your personal finances. In other words, too much money in the bank is never a bad thing.
With the use of digital platforms, your company can significantly reduce the risk of viral transmission while ensuring that the return to work goes smoothly. You can substitute face-to-face meetings with online video calls on Zoom or Google Meet. Businesses can use video conferences to communicate with clients. They can also be a good tool for brainstorming sessions, check-ins with staff, and collaboration among team members.
Furthermore, digital platforms allow companies to organize data, records, and hiring information. This will eliminate the need for in-person meetings and allow a smooth flow of information among all staff members at once.
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This blog is not meant to provide specific advice or opinions regarding the topic(s) discussed above. Should you have a question about your specific situation, please discuss it with your GBA advisor.
GBA LLP is a full-service accounting firm in the Greater Toronto Area, but we primarily service all of Ontario as well as the rest of Canada virtually, except Quebec. Our team of over 30, provides Audits and Reviews of financial statements, and Compilations of financial information, as well as corporate tax returns. We provide specialized corporate tax and succession planning for small and medium businesses, in addition to general advisory services.
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