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Crisis Management

What Can Finance Professionals Learn From Small Businesses During The Pandemic?

by Rodney Laws

These are turbulent times, and those handling finances during lockdown measures are under a lot of pressure.

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Speculation may be a fundamental element in finance, providing many investors with careers and allowing big businesses with a lot of insight to leap ahead of their rivals, but it’s typically rooted in stability. On a macro scale, it’s business as usual: the game rolls on, companies go through their operational routines, and the foresight involves minutiae that might snowball.

Following the outbreak of COVID-19, however, business as usual has been taken off the table. In its place, we have a struggle to accommodate a new procedural paradigm (remote working) that has driven many companies into the ground and burdened others with great uncertainty about their prospects. That stable foundation has crumbled to dust.

So where does this leave finance professionals who have never been prepared for instability on this level? To most capably overcome the challenges of this situation, they should be open to learning from others, and I see a lot of value in them learning from small businesses: not only how they’re responding to the pandemic, but also how they generally function.

Here are some notable lessons that finance professionals can (and should) learn from small businesses while they try to figure out how to adapt to these shocking global events:

Flexibility is a vital quality

Small businesses typically lack resources, whether they’re financial, knowledge-based, or interpersonal. This drives entrepreneurs and the teams they assemble to be flexible and pick things up as they go. There’s no time to do anything else, and no way to bring in experts. They also learn how to pivot when their ideas don’t pan out. If your current approach isn’t working, scrap it and move on to something that might.

Finance professionals, particularly those working for massive companies, can become quite inflexible in their approaches to business. They can sit back, relax, and expect others to accommodate their plans and ideas — but that won’t work at the moment. Everyone’s scrambling to figure out the best way to proceed, and it’s the companies ready and willing to pivot quickly that are handling it most capably.

Employee value is complicated

The average business owner will have just a fraction of the financial savvy that a finance professional can bring to the table. They’ll most likely have read some small business guide and they may even have been through a course or two, but they won’t be capable of keeping their finances together in any comprehensive way. This is bad in most regards, but good in one.

What’s the exception? Well, they won’t have any preconceived notions about how to gauge productivity and employee value, and that has one notable benefit that finance professionals should learn from: it allows them to see value that might otherwise go unnoticed. And since they’re able to spend a lot of time with their small teams, they can assess them properly.

If you’re thinking about letting people go during the pandemic because you need to cut your spending, bear in mind that each employee is more than just their straightforward productivity. One worker might not get that much done (identifying them as a low-value member of staff) but play a vital role in keeping their colleagues working together effectively.

Community ties are important

For the most part, small businesses rely heavily on collaboration — particularly on a local basis. Lacking the funding or exposure to compete nationally, they need to pool their resources with other organizations (ones that don’t directly compete with them) for mutual benefit. A coffee shop and a food stall in the same town might understand that each is good for the other.

Now that every business is going through the same difficulties, we need to remember that community ties are just as important on a macro scale. Brands that previously felt untouchable are receiving stark reminders that the employees upon which they rely are in turn reliant upon the stores that provide their groceries and the services that keep their communities running.

There’s no shame in struggling

Perhaps more than anything else we’ve looked at here, it’s key that finance professionals — regardless of the size of their businesses — accept that there’s nothing inherently shameful about struggling, whether it’s professionally, personally, or both. Someone who deals in facts and figures can become too taken by the illusion of control.

If they can just balance the numbers, they can get the result that’s required. That much is still true. But you can’t anticipate every eventuality, and sometimes no amount of reconfiguration will get the numbers to do what you need them to do. Consider how many companies that didn’t really do anything wrong are having to declare bankruptcy.

This is so important to acknowledge because there’s always assistance out there for individuals or businesses in need of it, but they must be willing to look for it and accept it. Hiding away when times get tough won’t accomplish anything. If you need some help, swallow your pride and ask for it: it’s inarguably the rational play.

Rodney Laws is Editor at Ecommerce Platforms.