Business Recovery Strategy: How to Reopen after a Crisis

Signs reading, “Sorry we are temporarily closed,” were not uncommon during the start and peak of the COVID-19 pandemic. A survey showed that roughly 43% of small businesses that temporarily closed their doors were due to the pandemic.

Small businesses with limited financial resources were the most vulnerable, causing some to scale down or halt their operations until they find their rhythm back. Worse, many others were forced to shut down entirely due to the sharp drop in demand and revenue.

Ultimately, the COVID-19 pandemic revealed flaws in disaster recovery and business continuity plans, which explains why many businesses suffered from the situation more severely than others. Some small businesses don’t even have a continuity plan in place, forcing them to close down shop completely during the height of the crisis. 

Certainly, the coronavirus will not be the last thing to put your business through the wringer. This is why you need to have contingency and recovery measures in place that will enable your business to weather and bounce back from crises. 

If you’re unsure how to create a business recovery plan, you’ve come to the right place. This visual graph will help guide you through the recovery process.

7-Step Business Recovery Plan After a Crisis

1. Assess the financial impacts

Crunch the numbers to evaluate how deeply your business finances were affected by the crisis. Reviewing your cash flow and profit and loss statements is a good way to quantify exactly how much your business lost to the crisis. For instance, did you close temporarily? Did you lay off employees? Did you change suppliers or slash your marketing budget to cut costs?

You have to account for all the different ways your business was affected to put them into your rebuilding plan and know what to prioritize. This first step lets you forecast how much funds and resources you have left and how much more you’ll need to get back on track. 

2. Revisit your business plan

Your business plan, which you likely developed before the crisis, needs an overhaul to make sure you don’t experience the problem again.

During the COVID-19 pandemic, for example, most businesses worked out a strategy to continue their operations online because no one was coming to their physical store anymore. Many brick-and-mortar shops started offering delivery and pickup services to accommodate the shift in consumer demands and behavior. 

This point also covers reshaping your strategy regarding operational risks. If the crisis was something your entire industry suffered, you can look at what your competitors did and how they adjusted to cope with the changes. 

Consider exploring useful resources to help you better manage the challenges your business faces. Below are a few helpful resources to get you started:

• Free digital skills training resources from Google for Small Business
• A step-by-step guide on how to build your online store with Shopify
• A recorded webinar about how small businesses can adapt to new workforce trends
• Tips, training, and other resources for small businesses from Meta for Business

3. Calculate necessary funds for reopening

You will need money to make money. Now that you have a better picture of your finances, calculate how much you’ll need to reopen your business and keep it running for several months until sales become stable. Consider the business aspects you’ll need to spend money on. This can include inventory you need to purchase, marketing expenses, or hiring and training costs for employees. 

Since finances can be extremely tight during this phase, you can consider looking into funding options, such as the following: 

• • Small business loans: You can get small business loans from banks and private lenders. SME loans can be short-term or long-term, depending on your needs. 
  • Business lines of credit: A business line of credit works like a credit card—business owners can access money whenever they need it, and the card will replenish once the balance is paid. You can apply for this financing option with traditional banks. 

• Equipment financing: This type of loan allows businesses to purchase or lease equipment necessary for operations. The equipment will serve as security, which the lender can repossess if you default on the loan. 

• Traditional SBA loans: SBA loans are partly guaranteed by the U.S. Small Business Administration (SBA). These usually come with higher amounts, lower interest rates, and longer repayment plans. 

• COVID-19 relief programs: If your business is still trying to recover from the effects of the pandemic, you can consider these relief programs provided by the government to help small businesses bounce back from the coronavirus. 

• • COVID-19 Economic Injury Disaster Loan (EIDL): The SBA offers financial assistance to aid small businesses in recovery. They can use the fund for capital and other operating expenses. 

• • SBA Express Bridge Loans: This loan is available to those with an existing relationship with an SBA lender. Businesses can access up to $25,000 to use as funds. 

• • SBA Debt Relief: This provides relief to current SBA loan borrowers. The SBA will cover the principal, interest, and other fees on current and new qualified loans. 

4. Reallocate budget

You will need some time to generate enough revenue to sustain your operations, and you have to shell out a significant amount upfront to get your business running. With that, you must identify the most important aspects that need funding and distribute your budget appropriately.

For example, you can start with minimum operating expenses (e.g., workforce, location, inventory) and cut back or slow down on non-essential expenses (e.g., dispensable hardware). Keep in mind that your goal is to maximize your operating budget and eliminate unnecessary costs. 

5. Develop a timeline

It takes a lot of groundwork to get your business rolling, especially in this atypical time. Take as much time as you need to create a timeline of what you need to accomplish for the relaunch. These tasks can include securing your funding, hiring or rehiring employees, evaluating and restocking inventory, setting up your online business profiles, planning for marketing, and the actual reopening.

This process can easily get overwhelming, causing you to get sidetracked by business activities that aren’t as important or urgent as others. Make sure to identify your priority actions—tasks that will deliver a solid return on investment. Perform a weekly check to monitor your progress and make adjustments if needed. 

6. Address people’s anxiety

Your employees were also affected by the crisis, so they’re looking at you for assurance that they won’t have to suffer through a similar problem again. You need to give them the security they’re looking for to keep employee morale up, which is important to your day-to-day operations and business productivity.

Taking the COVID-19 pandemic as an example, there’s no doubt that many people are still terrified about getting infected when they go out in public or simply interact with other people. As a business owner starting to make changes in how you do business, you need to address this anxiety to ensure you operate properly in the new normal. 

You need to show your employees that you’re taking the necessary precautions to ensure it’s safe to go back to work. Place safety protocols where customers can see what steps you’re taking to secure your place. Here are some steps you can take to reassure anxious customers and employees:

• Carry out regular cleaning and disinfection measures.
• Limit the number of people inside the establishment.
• Implement the strict wearing of masks and social distancing.
• Endorse delivery or curbside services to cater to customers who don’t want to visit a physical store yet.
• Initiate a flexible work arrangement to support a safe working environment.

7. Create a contingency plan

Unpreparedness can put a halt to your business operations. SMEs can learn from the COVID-19 pandemic when it comes to crisis management and identifying threats and outcomes. 

You should consider all angles of your business, with particular attention to the badly hit aspects, to help deliberate on how you can prevent or minimize the damage of another crisis and continue your core business operations amid one. Use the lessons and experiences learned from the coronavirus crisis. 

You can look into business contingency plan examples or guides to start. Make sure to review and update your business continuity plan to uphold its effectiveness and guarantee the continual improvement of your business processes, such as when an emergency occurs, or another surge of cases happens. 

Reset Your Business for the New Reality

The coronavirus pandemic has stressed out and brought businesses of all sizes to the brink. Whether you’re reshaping your small business to move online or reinventing it for the long term, resilience, adaptability, and creativity are essential to recovering from such challenging times. 

Seeking guidance from experts and financial lenders is worth considering to help take your business off the ground. If you require funding for business recovery, get in touch with JK Capital and inquire about small business loan application.