Small business owner opening up her business

6 Ways to Rebuild Financial Stability After COVID-19

6 min read • Apr 15, 2020 • Derek Miller

The COVID-19 pandemic has rocked businesses throughout the country. Companies are trying to migrate online, closing operations, and laying off staff to weather the storm. While the government has stepped in to offer some relief through the CARES Act, many businesses will suffer irreparable damage.

No one could have predicted a global pandemic of this magnitude, and even the most stable business owners are facing uncharted waters. 

When we eventually come out on the other side, businesses will be left picking up the pieces and rebuilding the financial stability they once had. Here are 6 tips to help you plan for business after the coronavirus.

1. Improve Inefficiencies and Systems

With many businesses closed, it’s the perfect time for owners and managers to analyze their operations and systems. Use your newly-found free time to assess current workflows, vendors, and capabilities, looking for inefficiencies and unnecessary expenses. 

After analyzing your production process, you might discover communication gaps, quality control issues, or other inefficiencies that hurt your bottom line. Optimizing your internal systems and processes can help streamline your business, which will make scaling easier and your business more profitable.

You should also take the time to assess your expenses—particularly vendors and service partners. Are you paying for software that you don’t use anymore? Are there more affordable vendors?

Many businesses haven’t compared vendors in several months or years. Not only will this help you find a better partner potentially, but it can also give you leverage to negotiate better rates with your current vendors.

A lot of people get so caught up in the minutia of their day-to-day that they rarely step back to ask, “Could I be doing this better?” Use this time to assess and improve your inefficiencies and systems so that you can be more profitable after the coronavirus. 

2. Scale Carefully and Strategically

It will take some time, but eventually, business will come back. As your profits begin to rise, you’ll need to grow and scale again.

When business is doing well, we often think about expansion and growth. Local businesses might see a huge boost from people who are excited to get out of lockdown and support their local community again. This rapid growth might entice owners to open new locations, hire more staff, or purchase equipment to keep up with business.

However, what happens if business trends back to what it was prior to COVID-19? 

Being cautious doesn’t mean you shouldn’t invest in your future—it just means you should do so carefully. For example, instead of using cash to purchase a new piece of equipment, consider equipment financing, which offers less up-front expenses and more long-term flexibility.

It’s important for all businesses to invest carefully following the coronavirus. Make sure you plan your growth strategically and not just on current trends.

3. Create a Recurring Revenue Stream

One of the main reasons why subscription services are so lucrative is because they create recurring revenue. Customers pay a fixed amount monthly until they cancel—giving businesses more revenue stability. 

If you can integrate recurring revenue into your business, then you can maintain an income stream even if you need to close your doors. 

For example:

  • Panera Bread launched a coffee subscription for $8.99/month. This strategy is guaranteed income and a good marketing tactic. If customers come in more often for free coffee, they are more likely to pick up a pastry or other food item as well. 
  • Disney and Universal sell annual passes for a flat monthly fee. Even with the parks closed due to coronavirus, they collect those fees from customers. 

Consider how you can get recurring income for your business, whether it is through a membership plan like Costco or Amazon or a subscription for several months of services at a discount.  

4. Build Protections into Your Business Contracts

Whether you operate a B2B company that sets up unique contracts with each client or a B2C brand that works with vendors, make sure you have provisions in your contracts to maintain financial stability in the event of a crisis. 

For example, brands can require 30-days notice for the cancellation of a contract or 1–3 month’s pay. This approach allows clients to break their agreements as needed but provides vendors with a cushion for the pay they were expecting to receive.

Without contractual protection, many businesses are now forced to make drastic changes to their operations. These realities are affecting B2B businesses that rely on the success of other companies.

For example, the Tampa Bay Times recently went down to 2 prints a week (on Wednesday and Sunday) because local businesses are not advertising.

Financial stability in many industries relies on secure and protected contracts. If your company doesn’t use business contracts or doesn’t have provisions within these contracts to offer financial stability, you should change that immediately.

5. Review Your Business Insurance Policies

Many owners and managers have found that their business insurance doesn’t cover much during the COVID-19 pandemic. While they thought they were covered for emergency interruptions or inability to operate, the nature of the pandemic means that fewer people are receiving payouts than expected. 

If this is the case for you, it may be time to review what other holes are in your coverage. If a natural disaster strikes (like a tornado or flood), you may not be covered either. 

Your insurance plays a big role in your financial stability. If your insurance provider helps you, then you can recover faster and open your doors again. Without help, you could spend months—or years—getting back to your original profit levels.  

6. Set Up an Emergency Fund

If there is one thing the COVID-19 pandemic should teach us, it’s to always be prepared for the worst. Many people have emergency funds in case of personal emergencies in life, like surgeries or natural disasters, and business owners should also set up these contingency plans.

As a rule of thumb, try to have 3 months (or more) of liquid funds saved. This emergency cash can help you survive future crises or cover unexpected expenses. While SBA Paycheck Protection Program (PPP) loans are the lifeline for most businesses right now, having this emergency fund already in place would give these businesses a cushion beyond the 8 weeks covered by the loan.

Your emergency fund should never be touched. It is not profit, and it shouldn’t be used to cover expansion or other nonessential expenses. It is only used in the event of an emergency—like the coronavirus. At the very least, knowing you have this safety net can make you rest easy when times grow uncertain. 

Building financial stability in your business is more than just increasing sales—it requires strategic planning and careful execution of techniques designed to build a financial foundation that won’t crumble at the first sign of distress. The 6 tips above can help business owners build financial stability that will carry them forward after COVID-19.


Derek Miller

Derek Miller is the CMO of Smack Apparel, the content guru at, the co-founder of Lofty Llama, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy,, and StartupCamp.