By now everyone has had their fill of COVID-19 related statistics, especially small business owners. The National Federation of Independent Business reports that 92% of all small business owners have experienced some sort of negative impact from the pandemic.
While you may be ready to get back on track or are already on the road to recovery, there may be things standing in the way. Uncertainty can be crippling. No doubt, the daily conflicting media reports relating to the economic impact and timeline for returning to normal, and what that looks like, has bred a considerable amount of uncertainty. For many, such uncertainty can be an obstacle for moving forward. This article is intended to change your daily conversations of reported cases and death rates, and start talking about getting back to (and staying in) business. Here are 5 steps that can help you overcome the uncertainty and guide you on your way.
Step 1 – Assess the Impact on your Financial Picture
This is usually the most stress-inducing aspect of getting back to business. But once you understand how the pandemic has impacted your business’s financial well-being, you’re ready to move forward.
- Update your cash flow statements since your business shut down, or was slowed. How does it compare to the same timeframe from a year ago?
- Compare your year-to-date profit and loss statement to that of the same time period for last year. How is it different and where can you adjust?
- Identify short- and long-term savings opportunities, as well as new investments you’ll need to recharge your business.
- Notify your business insurance broker with any changes you’ve made to your business. There are several things that can lead to a lower insurance premium, such as reductions in workforce and lower inventory levels.
Step 2 – Dust off Your Original Business Plan
When is the last time you looked at your business plan? Most entrepreneurs are continuously evolving as their business ebbs and flows, but it may be time to look back on your original business model to help you adapt to the new normal. Here are things to consider:
- What is a realistic revenue goal coming out of COVID?
- How have your customers’ needs changed as a result of COVID?
- Do your products and/or services need to be adjusted based on new social norms and health concerns?
- Will your value proposition need to be re-imagined?
- How are your competitors reacting?
- What kind of training will your staff need as you adjust your business model?
- Do you need to update your staff safety protocols?
- What is a realistic timeframe for your business to recover?
Step 3 – Identify Resources Needed to Recover
Most small businesses live and die by the state of their cash flow. Whether or not you participated in the Paycheck Protection Program, you should consider whether you’ll need additional funding. Economic Injury Disaster Loads can help support you with short-term lending if you need resources for things other than keeping your payroll. Here are some other potential sources of small business funding:
- Traditional SBA 7(a) loans and microloans
- Small business term loans from banks, credit unions and online lenders
- Cash value life insurance policies
- Business lines of credit
- Cash value life insurance policies
- Accounts receivable financing
- Merchant cash advances
- Inventory financing
- Purchase order financing
- Equipment financing
When considering financial options, it’s critical to be well-informed. Many financial advisors are dedicated to working with small business owners and can help you identify the risks and rewards for business lending options.
Step 4 – Create Your Grand Re-Opening Story
Chances are good that your customers were looking forward to your re-opening. How will you promote the good news? Even if your doors have already re-opened, it’s not too late to throw a party. Everyone loves one and if done right, you can rekindle customer relationships and attract new customers at the same time.
- Schedule the re-opening after you’ve worked out all of your re-opening kinks
- Consider whether a theme would be appropriate
- Promote the event to everyone you know
- Social media
- Customer mailing and/or email
- Website announcement
- Local Chamber of Commerce
- Invite your family, ask them to bring a friend
- Consider hosting a private reception one hour before the official start time for your current customers
- Create an environment where guests will feel safe and socially distant
- Provide a special offer during the reception; coupon, discount, free service as a way to thank customers for coming
- Take pictures during the event and post them on your social media; always ask your customers’ permission before posting their image
- Send thank you notes
Step 5 – Develop a Plan for the Next Crisis
No one could have anticipated the coronavirus pandemic and its impact on our lives. But there are things you can do to better prepare you for future interruptions to your business and your life. Using what you’ve learned during the current pandemic to prepare for the next crisis will help you insulate your business from future shocks.
- Make a list of all the changes you’ve made at home and in your business since the outbreak; what do you wish you’d had before it started?
- How much money does your business need to survive in the event you have to temporarily close for 90 days? 6 months? A year?
- Do you have a way to communicate with your customers, serve them and sell to them in the event of another social distance / business curfew situation?
The more creative thinking you can do to prepare for a worst-case scenario, the better. Having a Plan will help build your confidence for the future improve your business’s odds of surviving—and eventually thriving again—during tough financial times.
Now it’s time to start rebuilding the businesses you’ve poured your hearts and souls into for so long.