Small businesses are integral to the nation’s economy. Many shops, restaurants, gyms, and retail stores temporarily halted operations when the pandemic hit. A few companies had no choice but to lay off the majority of their staff and even shut down completely. The past months may not have been the easiest for them, but a few managed to stay afloat.
These businesses focused on staying efficient and on adequate financial management. They innovated their traditional strategies to adapt and address safety concerns. While all else regarding the future is still unknown, the steps that businesses take moving forward becomes crucial. That said, here’s a more detailed guide on how a small business can budget and survive during the pandemic.
Adapt Your Business
Small businesses across the globe struggled to survive following the COVID-19 pandemic. They had no choice but to adapt to the current reality. So, it is crucial to analyze how businesses can sustain the quality of their services even during these disrupted times. They can consult with fellow business owners to spark inspiration. Simultaneously, it is smart to monitor the latest information about the virus, especially as regulations change.
Center for Disease Control (CDC) and the World Health Organization are reliable sources that offer recommendations in keeping communities safe. Some innovative solutions that companies applied involve integrating virtual services. They utilize email, phone, and video conferencing apps to make sales and reach out to customers. New online marketplaces also emerged and grew, considering everyone has been practicing social distancing and staying at home doing quarantine.
The businesses that remained open invested in alcohol, sanitizers, and temperature kits so they could safely remain operational.
Upskill Your Staff
Small businesses should extend their efforts to manage their employees. This crisis is just as crucial for them, so it would be best to introduce programs in their best interest. It is helpful to offer training programs that can hone their skills and increase their efficiency and productivity. There is a wide selection of online courses at an affordable price and even free due to the pandemic. Not only does it increase their productivity while in self-isolation, but it also helps them develop new strategies.
Making Up For Lost Funding
With most small businesses forced to close amidst the pandemic, owners are losing funds to cover employee payroll and utilities. There are different sources to help small businesses manage their finances. Let’s take a look at them below.
Tap into Financial Assistance from the Government
There is a proposed $300 billion relief plan introduced to small businesses through the Small Business Administration. Restoring Economic Security, Confidence, and User Endurance (RESCUE) Businesses Act of 2020 increased loan limits from $350,000 to $1 million. Additionally, borrowers and lenders waived fees for the rest of the year. They even implemented a 90% guarantee for any loans with no maximum size limit.
Another program from SBA is the Economic Injury Disaster Loans (EIDL). This program aims to give interest rates as low as 3.75% for small business owners. The loan is up to $2 million available across the United States. The Paycheck Protection Program (PPP) is another loan program that was just recently introduced by the SBA. They provide two-year loans with 0.5% interest rates.
Get Aid from Private Sectors and Financial Institutions
Small businesses can explore private sectors that introduce programs providing financial aid. As an example, Facebook recently offered $100 million in grants to small businesses. It also helps to look into fintech companies that directly provide loans to small businesses. Some companies that specialize in providing these kinds of grants are Kabbage and Fundbox.
Renegotiate Terms of Contracts and Leases
Another way to reduce unnecessary expenses is through the renegotiation of contracts and leases. For instance, it can be a great help if owners ask for decreased rent or rent abatement from their landlords. It can also help to audit previous purchases from suppliers you no longer need. You can revisit past contracts to cancel those you don’t need and look into refund options. Accordingly, it is worthwhile consulting with banks to waive the interest payments on outstanding debt temporarily.
Managing Small Business Finances
To extend efforts in reducing expenses, review all past expenses, and see where you can make temporary cost-cuts. You can minimize costs by halting future purchases of office supplies if your entire labor force works at home. Cleaning and advertising services can also be adjusted if you don’t need them regularly. You can check utility companies and your service providers in case of reduction offers in light of the pandemic. Furthermore, it is vital to make sure that these adjustments do not compromise your products’ and services’ overall quality.
Your Voice is Important
The voices of small business owners are especially crucial in light of the coronavirus pandemic. They contribute to the economic growth of the country as a whole by providing jobs to local communities. Small businesses that were impacted the most include restaurants, gyms, and small shops since they had to temporarily close down. It is not enough to let giant corporations speak up in this moment of crisis dealing with economic policies. Instead, large companies can provide relief by simply paying any outstanding bills to small businesses as soon as possible.
These companies often use conserving cash tactics, which hurts small businesses and the entire American economy. Since small businesses are the lifeblood of local communities, they need immediate relief now more than ever. Small businesses can partner with other entrepreneurs using various mediums to acquire as much relief as possible through effective policies. Use mediums such as social media, letters, emails, and phone calls to reach out to customers and entrepreneurs alike and make your voice heard.
Ensuring the Safety of Your Employees
Among all these, it is most important to prioritize addressing the safety of your employees. It is vital to create a safe environment for them to be able to operate successfully. Refer to the following policies to ensure their protection amidst the current crisis.
- Provide options to allow them to work from home whenever possible.
- For retail and restaurant industries, reduce the number of employees working at a time to practice safe distancing.
- Offer comprehensive sick and family leave policies that comply with the Families First Coronavirus Response Act.
- Keep an adequate supply of gloves, face masks, and sanitizing equipment.
- Make sure to regularly sanitize all workstations.
- Provide proper training for employees on hygiene and sanitation practices.
- Enforce strict sanitation guidelines.
In summation, keeping your small business afloat during a pandemic is a difficult task, but with proper budgeting it is possible. Always ensure you’re constantly adapting your business to changing climates, maintain a culture of continuous improvements, look for areas of potential savings, make your voice heard, and ensure all of your employees remain safe. With these tips, your small business can survive the bad economic climate of a pandemic then thrive once again after it’s over.