Throughout the nation, businesses of all sizes are struggling to reinvent themselves and survive during COVID-19. However, the real economic effects of this harmful virus will take years to understand fully. Businesses that employ fewer than 500 employees make up nearly 48 percent of the American workforce. Still, smaller companies are often more fragile financially, giving them little protection to weather this financial shock.
Small businesses are the backbone of our nation’s economy, accounting for 43.5 percent of the U.S. gross domestic product (GDP). Small businesses must follow these recommendations to help navigate the effects of the current coronavirus crisis.
Make Plans, But Don’t Rush
Small businesses need to start making plans, but it’s essential they don’t rush everything, as this can cause mistakes. While you may feel pressured – and even tempted – to run out and make decisions immediately, you need to be well informed and seek the outside opinion of a third-party to help validate any decisions you make. For example, talk to a financial adviser, trusted friend, colleague or family member before making any quick decisions.
Focus on making contingency plans and document the steps you need to take. For example:
- Call landlord to discuss lease terms
- Sign up for government grants
- Sign up for government or bank loans
Breaking down your ultimate goal – saving your business – into small, digestible steps will make it easier to execute your overall plan.
Paycheck Protection Program
The CARES Act Paycheck Protection Program (PPP) offers more than $349 billion in loan support, specifically for small businesses. This loan will be forgiven if all employees remain on the company’s payroll for eight weeks and the loan money is used for rent, mortgage interest, payroll and utilities.
Determine Customers’ Changing Needs
The entire world has been turned upside down due to COVID-19, and your customers’ lives are likely very different than they were a couple of months ago. In fact, some people’s lives will be forever changed by this pandemic. Your company’s long-term viability depends on you adapting to your customers’ needs when the pandemic is over. For example, retailers need to begin focusing on online experiences. People are creating new habits right now, and even when COVID passes, some new habits will remain.
Consider how the post-COVID world will change your current business model, and consider bringing valuable customers into the planning process. While some people will have less money, many will be eager to get out in public again once it’s safe. Send surveys and reach out to customers to ask them what they look most forward to when the pandemic has passed.
To thrive in a post-pandemic world, you may need to reinvent your business and search for creative solutions. Analyze your cash flow, fixed expenses and then review what you can decrease to save valuable money. Sometimes cutting flexible costs early can ensure that you have enough funds to pay more necessary expenses in the near future. Analyze what expenses will accept delayed payments and prioritize what you need to pay.
Retain Good Employees
Good employees are your most valuable asset. Losing good employees during COVID can make it difficult to rebuild your company when the economy starts up again. Even if you’ve been forced to cut your labor costs during the COVID-19 crisis dramatically, you want to rehire your best employees when your company reopens. Focus on the long-term and remember that we are all humans dealing with this crisis.
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