Tips for Managing Your Small Business During the COVID-19 Pandemic
What Can Small Businesses Expect from Coronavirus?
As America braces and prepares for the developing COVID-19 crisis, many states have taken expansive actions to mitigate the spread of the virus, including ordering Americans to shelter in place. In light of these strong actions, many businesses have been forced to drastically scale back or entirely halt their operations. As such, small businesses should begin preparing for decreased revenues, limited consumer activity, supply chain disruption, and an overall faltering in business activity.
In this article, we will expand on some of the implications of the virus and discuss prudent actions your business can take to minimize the overall disruption and damage to your business.
What Can Your Small Business Do to Help Weather the COVID-19 Storm?
There are a number of actions your small business can take during this time of uncertainty. The following recommendations are just some of the many things you can do to help make sure your business is still strong when we exit the current economic slump.
Analyze Your Businesses Finances and Develop a Plan
The most important thing for any small business to do during this time is crack open the books and analyze the fundamentals.
How much cash does your current business have on hand? What are your fixed costs? How much money are you going to need to survive the next 3 months? What level of revenues can your business expect, if any, over the next 3 months?
Getting a clear picture of your businesses financial standing will enable you to plan for the next few months of economic downtime in an effective manner, and it will enable you to make smart decisions on the proper courses of action to pursue.
For example, let’s say you have $3000 in cash on hand right now, but your businesses fixed costs for the next three months (meaning rent, interest payments, accounts payable, etc.) will be $5,000. All-in-all, this is a very manageable situation. Since you know you are going to need at least $2,000 more in cash to cover your expenses, you should begin the process of looking for a loan.
Consider Taking Out A Loan to Shore Up Cash Flow
Building on the previous example, one of the best things you can start doing is researching and considering different loan options to strengthen your business’ financial standing. Having extra cash on hand in a time like this is important. Plus, since this is a national crisis, both federal, state, and local governments have begun activating different small business loan programs to help small businesses access funding.
The United States Small Business Administration (SBA) has activated its Economic Injury Disaster Loan Program for small businesses across the country. These loans come with favorable terms and low-interest rates, making them a great option for businesses that need to access some extra funding.
You should also research state and local funding options that are available to your business. Simply type into Google, “[state or city] COVID-19 loans”, and you’ll be able to see an array of options. These sorts of programs will only continue to multiply as the virus progresses. For example, recently, Governor Ron DeSantis of Florida activated the Florida Small Business Emergency Bridge Loan Program. Under this program, Florida small businesses can apply for short-term, 0% interest rate loans. If you are a small business in Florida and need access to extra funding, applying for this program is a no-brainer.
There is also the option of traditional banks and alternative lenders. Since these aren’t backed by the government, the interest rates will be higher and the terms less favorable. But if it means the difference between your businesses surviving or going bankrupt, these loans can definitely be worth it. As usual, the better your business’ credit history and rating, the more favorable the terms and rates will be.
Keep In-Touch with Your Customers and Community
Keeping customers and consumers engaged with your business during this time is going to be extremely important. Stay active on social media. Let your customers know that your business is ok and that you are there for them and the community. Remember, since most people are at home right now, they don’t have a lot to do. That means they are going to be very active on social media and other social platforms. Now is a great time to interact and engage with them.
If you are able to, be sure to help the community. For example, let’s say you are a restaurant and you have a lot of food that isn’t going to be used or is going to spoil. Donating it to a local charity could be a great way to build goodwill with your community. People will remember who went the extra mile to help others during this difficult time.
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Tailor Your Marketing
If you are an e-commerce business, let customers know that you are still shipping and still functioning as normal. Let them know that your products are there for them during this tough time. Tailoring your marketing to the current economic atmosphere will enable your brand to remain relevant, and it will help consumers recognize that you are a business that cares.
If you are a restaurant, let people know if you are doing takeout. Explain the procedure for ordering, such as ordering by phone and then pulling up to the curb so that you can bring the food out to them. You can even provide incentives, such as a $10 gift card for every $50 spent that can be used when the dine-in restaurant reopens. Such an incentive can drive business now and later!
Figure Out What Your Business Can Still Work On
Some businesses may be able to still operate during this time. If you are an e-commerce business, you not only will still have orders but probably an increase. Plus, if there are any projects that you have been waiting to start, such as redesigning part of your website, the extra time you have on your hands now could be the perfect opportunity to complete some initiatives.
If your employees are working from home, be sure to utilize standard remote working practices. Video conferencing technology, like Zoom and FaceTime, can keep your employees engaged and interacting with one another. Make sure to set clear guidelines for what you want to accomplish as well. Remember, during this time, your employees won’t be able to ask questions and get clarifications as easily as when they are in an office setting. Having a collaborative document detailing the specs of all of your initiatives can ensure employees understand what is expected of them and what your goals are.
Another great platform is Slack. Slack is an online messaging system that enables businesses to set up a communication hub, where employees can communicate with each other in a text message-like manner. Plus, the platform allows you to set up forums and groups, meaning you can send messages to the entire company, to a specific group of people working on a specific project, or to an individual.
Trello is another option for businesses. This online platform allows businesses to set up different boards, lists, and cards, which systematically breakdown the tasks involved in projects and initiatives. This can keep your company organized and efficient, allowing you to detail what exactly you want to accomplish.
Reach Out to Your Supply Chains
During this time, it is important to reach out to your supply chains and get a clear understanding of how the virus is impacting their operations. Obviously, anything that impacts them will impact you. Find out if they will be able to continue providing what you need. If they can’t, research whether or not there are any alternatives.
Keep Employees in the Loop
This is a difficult time for employers and employees alike. As such, you should do your best to keep your employees in the loop. Let them know your expectations for your business during this time.
If you are confident you will be able to keep paying them, let them know that. If you are thinking you are going to have to let them go, be up front about it. If they need to begin looking for other work, give them the advance notification that you would want to receive if you were in their position.
Follow the News
Keeping an eye on the news and the recent developments regarding the virus and the economy is a must. This will give you a better idea of what to expect and what to prepare for over the coming weeks and months. Information is power.
There’s no doubt that this is a difficult time, but remember to stay positive. The United States is coming out of an unprecedented period of growth and prosperity, and many signs point to the United States’ ability to weather this storm.
By diligently analyzing your business, setting up a clear plan, and executing on your goals, you can make sure your business remains fundamentally strong during this period. Things may get tough, but the key here is simply surviving to operate another day.
Things will get better, and by utilizing some of the previously mentioned tactics, you can make sure your business is around to take advantage of the better times to come!