The economic crisis caused by restrictive measures during the pandemic hit the small and medium-sized business sector providing offline services the hardest. <...> And all the companies that didn't have time to adapt to the new reality and move to the online environment were at high risk of bankruptcy.
One of the main causes of bankruptcy during the pandemic could be considered the inability of businesses to meet their debt obligations under bank loans. Also no less important was the cause of insolvency of payment of rent for retail, office and warehouse premises. < >
Since most landlords refused to provide any relief on rent payments, businessmen had to terminate their leases for commercial real estate. The inability to meet their obligations to pay utility bills, employee wages and insurance premiums is the third underlying reason why companies may turn to bankruptcy proceedings.
What steps can businesses take to avoid bankruptcy in the current environment?
1. Involve employees in solving the problem. Workers need to be energized to continue producing goods and services in a time of crisis with confidence and peace of mind.
2. Engage in weekly financial planning.
3. Review your portfolio of counterparties and clients to secure your revenue and keep payment from a more reliable clientele.
4. Put less reliable counterparties in control of their revenue.
5. Save previously planned development expenditures to create a financial cushion.
You can read the full article at RUSBASE.