Long before the COVID-19 health crisis, financial administration was already one of the major challenges for Canadian business managers. In the past few months, many companies have had to review their priorities and rethink their ways of doing things.

With accurate and up-to-date information, decision-makers can keep their plans for the future on track and prepare for headwinds. This will be especially crucial as Canadian businesses navigate recovery in the uncertain months ahead.

Here are three reasons to optimize your finances and help you deal with this new business reality:

1. Accessing cash

The situation caused by pandemic has highlighted areas of improvement in the way many small businesses in Québec handle their finances. Often set aside for lack of time or knowledge, cash flow management is particularly critical when applying for an emergency loan or other support measures related to the crisis.

To keep their business running and carry it forward, many entrepreneurs may find themselves having to take a step back during this stressful time to get a clear understanding of their financial situation and evaluate their contingency plan and develop predictive scenarios. This will allow them to put their best foot forward to obtain financial assistance quickly from their bank or government and ensure a favourable business recovery.

As most business managers have recognized, sound daily financial management has become increasingly important in these challenging times.

2. Rethinking business models

The message from Québec leaders is clear: to remain sustainable, businesses will need to adapt to the new realities brought on by the pandemic. In a time of social distancing, virtualization and supply chain disruptions, many companies will have to rethink their business model from the ground up to be profitable in the medium term.

Entrepreneurs will need to ask themselves what operations, products and services are actually profitable. They’ll need to monitor their results very closely, evaluate returns on investment and be ready to quickly adjust their strategy. Having a clear vision of their finances will be critical in this context.

3. Securing business partners, or finding new ones

The entrepreneurial landscape will have changed completely as a result of the pandemic. There will be mergers, acquisitions and strategic alliances as entrepreneurs strive to keep their businesses afloat. To ensure transparent communication and bring deals to the closing table, entrepreneurs will need to provide accurate numbers to current or future business partners.

Entrepreneurs should therefore start implementing sound financial management practices right now. Simple online technologies can help those who lack time for accounting tasks make sure they have proper systems in place to manage their budget.

Our experts offer an affordable, cloud-based solution, supported by our affiliate Operio, to help entrepreneurs bring their vision for their business to life.

COVID-19 has considerably transformed the economy and the systems in place. What if this crisis helped you reinvent yourself?

Businesses have been seeing major changes for a few months now and they can expect to see more in the coming weeks. Your competitors and business partners will adapt; some will disappear. Your employees will have to get used to new processes and you’ll have to find ways to keep them engaged. Technology will continue to play an ever-important role.

Your clients’ needs and their consumer behaviours will assuredly change in the wake of this crisis. In this context, will your current business model still work for you? Here are a few things to think about.

The context has changed, so have your clients

Let’s face the facts: this crisis will change your clients and their consumer habits will evolve. They will even perhaps turn to some of your competitors for a more crisis-adapted offer. Even their needs and expectations won’t be the same.

Clients who would have previously shopped for a bargain will now value the local aspect of the product or service, or even safety, hygiene or availability above all else. You may have gained new customers during this period who have a very different profile from your regular customers, but whom you will want to continue to serve post-COVID.

Know your clientele

Get to know your clients by talking to them, surveying them and assessing their consumer habits. Don’t rely on your historical data—they no longer reflect the current situation and the new era we’re entering.

Whether through a survey or a short questionnaire when you receive an order or individual calls, you can gather information on your clients’:

• Current and new needs in the wake of the crisis;
• Concerns about your offer post-COVID-19;
• Expectations regarding how you do business and communicate with them post-COVID-19;
• New consumer habits for products and services like yours.

Take a look at their shopping carts and orders to see what has changed and which products and services are in high demand and which ones are not.

These analyses will help you retarget your offers and build a new client segment from your existing clientele (some may have switched from B2B to B2C mode). That way, you can adapt your communication and distribution channels, potentially leading into the digital transformation of the client journey.

Evaluating the client journey and its digital transformation

Until today, customer relationships under various business models relied first and foremost on face-to-face interactions. People were at the heart of product sales and service delivery. The COVID-19 crisis, business closures, teleworking and the rise of online shopping have drastically reshaped those dynamics.

What will come out of this situation is that consumers will adopt new purchasing behaviours and resort more and more to digital channels to buy their goods and services. The crisis will speed up the digital transformation of businesses. Human interaction will prevail but it will no longer play as big a role.

You must therefore redefine the client journey by identifying your points of client contact, including at the information gathering, delivery and after-sale service stages. You can then find out how the digital transformation can optimize their experience and create value before, during and after their purchase.

Ask yourself these questions to better understand your client journey and how the digital experience fits in:

• How do your clients want to be reached?
• How have their consumer habits evolved?
• How do they currently contact you, be it physically or virtually? (Your best strategy is a multichannel strategy.)
• Based on their needs, how can you diversify your points of contact?

Consider all of the steps involved in service delivery, research and after-sales:

• Before the purchase (website, social networks, referrers, Google Ads, etc.);
• During the purchase (transactional website, email, online chat, etc.);
• After the purchase (follow-up, website survey, etc.).

While the digital transformation can contribute to diversifying your revenues and improving operational efficiency, it should not be at the expense of the client experience.

Digitalization strategies are not just transaction-focused; they also allow you to drive client commitment and foster relationships and partnerships.

What about your operations?

Delve a little deeper to find out how you can adapt your activities to your clients’ needs. It might make sense to modify your offer and processes, integrate new technological tools, review your supply chain management, develop new partnerships and monetize your products and services.

Social distancing will continue for a while longer—it will disrupt how you do business and it will create new client habits. Consider the potential impacts.

Here are some important questions that will help you further your analysis and steer your business model in the right direction:

Product or service offer

• Should you develop new services or products using your current assets to meet client needs?
• Should you adapt your current offer?
• Should you trim your current offer and focus on more promising products or services in the medium and long terms?

Supply chain

• Should you review your supply chain to improve its efficiency in the current context?
• Are there any options that were previously irrelevant but would now be worth considering?

Suppliers and partners

• Should you opt for new partners and suppliers to promote or deliver your offer while meeting new client needs?

Resources and workforce

• Do you have the resources (material, human, technological) to support the changes to your operations?

Payments

• Should you monetize your offer differently?
• Can you issue your invoices and accept payments differently?

As you review your business model, those are the factors to consider. It will help you redefine your business so that, ultimately, you’ll be better equipped to overcome future challenges resulting from changes to the social and economic environments.

Our strategic experts are here to support you during the relaunch of your activities and throughout the process of adapting to this new reality.

The pandemic has created upheaval in supply chains. How do we address the problems that may still arise?

Businesses everywhere are currently facing an unprecedented situation and they need to learn to adapt to this new normal and shift to dynamic planning mode.

As the situation evolves, so will the restrictions and you’ll have to reassess your plan in order to remain aligned with your priorities. Organizations must be agile and speed up their planning and execution cycles, especially when it comes to managing their supply chains.

Uncertainty will linger due to constraints in the international markets and concerns surrounding health and health measures. So, you’ll need to ask yourself a number of questions in order to rebuild a strong supply chain and reduce all potential risks of supply chain disruption.

1. Who are your suppliers and what are your critical products?

It’s imperative that you analyze and map your supply chain to identify your strengths and weaknesses. Create a profile of your suppliers:

• Who are they?
• Where are they located?
• Who supplies what?

Whether you source your products internationally or locally—from Quebec and elsewhere in Canada—the value chain with certain countries or supplies may be broken. They might not yet be authorized to resume their activities either because of laws in effect or they did not survive the crisis.

It’s also important to identify your critical products and look for alternative solutions in case your supply chain is disrupted.

2. Are your supply levels and stockpiles sufficient?

We’re already seeing a shortage of certain products and consumer insecurity can be misleading and give off the impression that there’s a shortage on the market. The current context is creating a disequilibrium with major demand-supply fluctuations in all markets. Your supply level may therefore not be balanced along your supply chain.

You must review your stockpiles. Be alert and anticipate the needs and requirements of your clients and suppliers in an effort to synchronize all stages of your supply chain. This will help you take quick action if there’s a problem.

3. How can you ensure that health measures are observed throughout the supply chain?

Health security measures vary from one country to another. Before offering a product or service to a client, make sure that public health recommendations are observed at all levels. Mandatory quarantines may trigger delays along your supply and production chain, in turn resulting in cost overruns and impacting your profit margins.

4. Should you repatriate your production to Canada?

In addition to the recent issues that have surfaced and to ensure supply chain continuity, you might have to consider new routes or methods of transportation to source from certain impacted markets, or even find new suppliers. It’s a great opportunity to consider relocating your production to Canada, or Quebec, in order to lower your costs and support the local economy.

For example, a business that normally sources from China because of low production costs but is experiencing a delay in production due to logistical or health constraints may be better off switching to a local supplier. Even if the local manufacturer has a higher production cost, the cost difference may be offset by a productivity gain.

The current pandemic is showing us not only how fragile our ecosystem is, but also how important it is for us to invest in our local economy.

5. Do you have enough liquidity to meet demand and do you have adequate financing?

Current constraints have a direct impact on the financial return of organizations and moving forward, everyone will need liquidity.

For example, as a business, you’ll need liquidity and want to make payments within 60 days. Your supplier will also need liquidity and want you to settle your payments as soon as possible. So, you’ll need to reconsider your payment mechanisms and assess your financing needs.

What type of payment terms should you negotiate with your suppliers? That will likely have an impact on the line of credit you’ll need to take out—speak with your banker.

6. Ultimately, how will all of these constraints affect your customer service?

The decisions you’ll end up making after answering these questions may result in delays in your supply chain, in turn affecting your manufacturing and distribution timelines and, ultimately, your customer service.

Some businesses have integrated new technologies to their manufacturing and distribution processes that may no longer be reliable because the entire chain is now disrupted. Delays will fluctuate and you may change suppliers—and it will all affect your processes.

It’s more important than ever that you communicate with your clients and set clear priorities regarding your products and services. It may not be necessary to offer all of your usual products. You could prioritize certain products or formats that will allow you to meet your clients’ urgent needs. Gradually as you build your supply chain back up, you can begin to reintroduce other products.

Developing a stronger supply chain for the future

The decisions you make today will be the key to success. As the situation becomes more stable, you can review the options that will allow you to consolidate your supply chain. If you tread with caution over the next few months, you will pull your business out of this crisis and come out stronger and better prepared to face the next waves.