We all know that COVID-19 has put us all in a bad place. From individual employees to big businesses, to banks. There wasn’t a single entity that wasn’t affected, and that includes small businesses. There are a lot of ways though that you can ensure your business isn’t going anywhere. Yes, COVID-9 is unpredictable, but you can help yourself by making sure you include this in your financial plan.
Speaking of plans, that’s an important first step that you need to take and write out. Businesses that have a plan at the beginning are twice as likely to succeed, so why not ensure that you will too? Not only that, having a specific and well-thought-out business plan will help you get a loan from the bank if needed. Now, what do you need to include in this plan? 1. Realistic goals. If you don’t set realistic goals, there will be a lot of problems with your success in the future. 2. Establish a method to track your progress. This could be a number of things, but a good way to do this is checking in what worked for the month and what didn’t, and how you will change your plan. 3. Create an itemized budget for anticipated expenses and leave room for unforeseen costs. You wouldn’t want to fall short on paying your employees because you didn’t put away a little extra money outside of the budget you planned. 4. The more detailed the plan is, the better and this will help you get a loan from the bank.
We all wish that we had endless funds to start as many businesses as we like but that’s simply not true. Most small businesses need to take a loan from the bank. In Ethiopia, there are many loan programs that are available for everyone to use. There are a few steps you need to take though, before you ask for a loan. 1. Learn how banks assess you. Do you need to show you can pay the loan back? Do you need to show your finances from before? 2. Decide what type of loan you would like to take. From Term Loans to Merchandise Loans to Advance on Letter of Credit Loans, there are various loans you can take, and you need to determine which one you need. 3. Decide on the lender. There are so many banks in Ethiopia that offer different loans, you should be 100% sure of which bank you feel comfortable with to take a loan from. 4. Determine your chances of getting approved. There could be a variety of reasons why you won’t be approved, which is why you need to take a step back and check all the documents you have. Ask friends or families who have taken loans before about what they needed to do in order to get approved. 5. Gather the right documentation. This is important as it is a factor to determine whether or not you will secure the loan. 6. Fill out the application. This is the final step. After this, it’s just patiently waiting to see if you will get a loan.
If you’re a small business struggling financially but never wanted to receive help, I suggest you take a loan from the bank. There are many reasons why your business could be failing, but there is no point in allowing yourself to struggle when there are methods to keep you afloat. Take the time to plan, focus, and understand how it all works, but don’t let your business fails without trying everything you can.
By Seema Nasreddin
Sponsored by Bank of Abyssinia. However, the views expressed here do not reflect that of the institution.