How can a business best prepare for a post-pandemic world?

Reopening, Covid safe sticker sign for post covid-19 coronavirus pandemic illustration, covid safe economy and environment business concept. Reopening

The landscape has changed and smart business owners are planning now to take opportunities in the new reality that is emerging.

Failure to prepare is preparing to fail. Business owners are wise to prepare for a post-pandemic world now, but what does that world look like? Forget business-as-usual; while we will probably be blessed with an economic relief boom, it might be short-lived. The hard truth is that the global economy has been pushed to its limits. We live in unprecedented times and the future has never been more uncertain.

The Australian government’s response of providing emergency funding to individuals and businesses will start to be gradually phased out. How individual businesses will fare when the Australian economy will be heavily affected by a volatile, post-pandemic world is extremely difficult to predict.

That’s why smart entrepreneurs have started revising their business and financial plans now. A clear vision ensures that they are well-positioned to navigate rough seas and to seize new opportunities that might present themselves. Whether you have a comprehensive strategy or are just getting started, one area that deserves attention is your company’s finances. Some questions that you should be able to answer include:

  • Does your company have access to sufficient funds to weather a new economic storm? For example, your long-term clients might not be able to pay you on time in a post-covid world because they are not getting paid promptly themselves. What measures do you have in place to overcome this?
  • Would your company be able to deal with ballooning prices for goods and services? For example, ocean container freight rates have increased by as much as 400 percent in the last two years, spiking costs that have forced businesses to make tough decisions about how they remain competitively priced for customers. Would you have the working capital available to suddenly deal with huge invoices?
  • How certain are you that your bank will provide you with essential support when you need it? A famous quote by Mark Twain says it all: “A banker is a fellow who lends you his umbrella when the sun is shining but wants it back the minute it begins to rain”. Ask your network about their experiences and find out whether your bank has a bad reputation for puling the rug.

Entrepreneurs should constantly explore their options to reduce their risks and costs. That’s why it is a good idea to spread your bets and maintain relationships with several financial institutions. It reduces your reliance on a single bank and it can also reduce your banking fees.

There is another important reason to look into your company’s finances: interest rates are at historically low levels which makes borrowed money an attractively cheap source of funding. If you have a prejudice against using borrowed funds to fuel growth, think again: not only is it historically inexpensive to borrow, careful use of financing can provide some essential flexibility in uncertain economic times.

Lending solutions can go beyond borrowing a sum of money at an interest rate. Consider other financial products such as commercial mortgages, business credit cards and asset financing structures. You should consider whether your assets such as machinery, inventory, and trade receivables represent value and might be financeable. Instead of through a general loan, these assets can also be financed through leasing, invoice financing, and inventory financing solutions. Some asset financing structures can help you reduce your risks and make your financial performance more stable and predictable. Do not dismiss solutions because you don’t know what they are – you can find plain English explanations for financial products at Swoop.

The lending solutions that are available to your company largely depend on your company’s financial health. Although a great credit score gives you more options, there are still products available if your company’s credit history is less than perfect. The landscape of financing solutions can feel a bit complex and overwhelming, which is why we consider it our role to give you expert advice that is tailored to your business needs. Swoop helps Australian businesses access a huge range of financing solutions, finds ways of making savings across financial products and is faster and easier than searching for products online.

Getting a company’s finances in order is essential for any business that wants to step into the future leaner and ready to take on the challenges and opportunities coming our way. Visit Swoop for more information on how we can help you make the best moves for your business.

Written by Jachim Gobien, a freelance copywriter and management consultant. He is specialised in financial analysis, financial modelling, and risk management. Prior to becoming a freelancer, he was working as a corporate banker for one of the leading international banks. He was involved in many transactions, both small and large ones, that included large corporates, venture capital, and/or start-ups.