There’s no denying that the recent pandemic has had a significant impact on many businesses. Retail businesses and restaurants were hit particularly hard. Even some of the major players took a hit. Nordstroms, Bath and Body Works, Victoria’s Secret and Starbucks have announced that multiple locations will be permanently closing. If these large companies are struggling to stay afloat, it is, of course, even harder for smaller business retailers and restaurants to ride it out and successfully reopen. After the major financial loss they suffered, merchant funding solutions are at the top of most of their reopening checklist.
However, to ensure reopening success, small businesses are going to need more than just fast working capital. They are going to have to take a long, hard look at the damage as well as their existing strategy. Retailers and restaurant owners have to position their businesses to adapt to the new normal for their industries if they plan to emerge from this victorious.
Evaluate the Financial Impact
It’s important to know where you stand financially when reopening your business. Now is the perfect time to update your financials. By comparing them to last year, you will be able to accurately assess your losses. Many small retailers and restaurant owners will have either depleted their reserve of working capital or did not have enough in reserve to begin with. This means they will need to explore various merchant funding solutions. In addition to determining which is the best for your specific situation, you will also need to determine what you need to do to recoup those losses.
Revamp Your Business Plan
What worked before the pandemic, may not work after it’s been contained. Even as restrictions are being lifted, many people are wary of putting themselves out in the general public. Retailers and restaurant owners will need to rethink how they do business and which areas of their business they need to make a priority going forward.
Whether you were closed or conducting business on a significantly reduced scale, this resulted not only in lost revenue but also in lost customers. Many retail customers turned to Amazon to get what they needed. Restaurants that remained open found themselves competing with local pizzerias and fast food joints specializing in taking out and delivery. You may have to rethink how you do business to lure customers back. You may need to increase or retarget your marketing efforts and prioritize different aspects of your business. You may also need to hire new employees or retrain existing ones to effectively implement your new business plan.
Have a Contingency Plan in Place
Experts predict another wave of COVID-19 to hit in the fall. Even if it doesn’t happen, some other future crises could potentially derail your business. If you were prepared this time, good for you. If you weren’t, it’s time to create a contingency plan so you aren’t completely blindsided the next time. In addition to diversifying your business plan, look for ways to build up your reserve of working capital. Reduce nonessential spending or implement more efficient operating procedures. You may also want to focus on paying down debt, leaving you with fewer financial obligations should another crisis occur.
Evaluate Merchant Funding Solutions
If you’re in need of a little help getting your business back on its feet, CapFlow Funding Group may be able to help. We specialize in invoice factoring and merchant cash advances (MCA). For retailers and restaurants, an MCA can be one of the best merchant funding solutions. It can provide you with the fast working capital and revenue-based repayment, without the need for a perfect credit score or taking on additional debt. We are dedicated to providing the short-term working capital you need to rebuild your business and will work with you to find the best funding option.
CapFlow also works with trusted partners to provide other merchant funding solutions that may be better suited to our clients’ business needs. We service many different industries with a variety of funding needs. Contact us today and find out how invoice factoring can help grow your small business.