Many businesses are struggling in light of the raging coronavirus and the mandatory lockdown measures imposed in many countries. Businesses in the hospitality, tourism, entertainment and transportation have been hit particularly hard but many others have been affected too. And while many businesses may have had solid financials, they now risk to face liquidity or cash flow problems. Numerous reports caution a coming wave of bankruptcies. Even big firms such as the multinational retailer Debenhams is already eyeing bankruptcy.
Some businesses are eligible for limited government emergency loans or grants, some may be able to draw on their reserves or on other emergency loan facilities to keep the business alive. However, this is not sufficient in many cases in particular given the already high levels of debt exposure of many businesses prior to the corona crisis.
A “quick and dirty” solution is needed that can be accessed at low cost by any type of business, small or large, national or multinational. An interesting solution to solve this cash flow issue comes in the form of a voucher system. Businesses could offer customers vouchers than can be redeemed at a later stage. This is a simple and yet effective way to keep selling goods or services and retaining cash flow during the lockdown. Many customers are keen to support local businesses during this time of need, they just need to be given an opportunity. Customers can further be incentivised to buy vouchers by offering them discounts.
Implementing a voucher system is relatively straightforward. All that is required is a simple online customer facing landing page with a customised offering, a payment gateway, a back end voucher data base and a personalised set of terms and conditions. This voucher solution can be integrated into an existing website or it can be newly set up. In order to increase voucher sales, this system could be combined with simple physical window advertising as well as targeted online advertising. Below is a fictional example of how such a voucher landing page would look like for a local bakery.
If you are interested or curious about how such a solution would look like for you, we recommend you to get in touch with us. We are currently offering customers a special no-risk deal where they do not pay any recurring fees unless they actually manage to perform sales. Other companies offer voucher solutions whereby businesses pay fixed monthly fees. We believe that this is not the right approach as this often increases the financial burden on already struggling businesses despite the implemented solution potentially not working as attended.
Online shops and delivery services
Another solution to retain cash flow during the lockdown is to develop an online shop and delivery service. This is not possible for every type of business or some businesses may lack the resources to do this. However, it could be an interesting solution for others. Setting up an online shop in itself is not that difficult. It merely requires a customised web interface, with a back end sales data base, a payment gateway and appropriate physical resources to prepare, pack and deliver the products. This online shop could be set up as a temporary solution to deal with the coronavirus but it could also represent a sensible step towards growing and modernising a business regardless of the coronavirus.
As usual, a first consultation or chat with us is non-binding and free. Click here to get in touch.