It’s hard to stay calm when the business you’ve worked so hard to build is struggling to survive the national health and economic crisis resulting from COVID-19. Most large companies have mechanisms in place and financial reserves that enable them to endure an economic shutdown for long periods. In contrast, small businesses have access to fewer resources and operate with significantly less capital.
Now that the government has lifted the stay-at-home quarantine and given businesses the green light to reopen, owners are challenged to find a path back to profitability. In this time of uncertainty, there is no simple answer—but with a solid financial plan, good organization, and long-lasting relationships, it can be done. Following sound business practices is also essential for businesses such as hardware stores and home improvement centers whose doors remained open during the pandemic.
Remain Calm and Confident
You may be driven to spend every minute you’re awake working on issues confronting your business. However, it’s also essential to engage in relaxing activities that make you feel better mentally and physically. After all, you are the engine that keeps everything moving forward. Remaining calm will give you a clearer insight into overcoming your daily challenges. You’ll also acquire a better perspective on the best way to lead your staff during this crisis. Understandably, dealing with COVID-19 rules, regulations and loan applications has created a mound of additional paperwork—yet,
Focus on Applying for Finance Assistance
Businesses whose finances have been struck by COVID-19 should apply for the loans and resources that have been made available through federal and state governments, and large corporations. Although many small businesses initially found it difficult to access loans connected to the first federal stimulus package, the new bill passed in June was designed to remedy issues that impeded the flow of funds. In addition to Paycheck Protection Program Loans, state and local governments are also assisting small businesses with loans.
- U.S Small Business Administration Economic Injury Disaster Loans (Loans up to $200,000)
- SBA Economic Injury Disaster Loan (emergency grant of $10.000)
- Amazon neighborhood small business Relief Fund ($5 million in available funds)
- Facebook Small Business Grants Program ($100 million in cash grants and advertising credits)
Cities offering programs include San Francisco, Los Angeles,
Denver, Chicago, Manchester, New York, and Oklahoma City. Check your state’s
website to determine what funding is currently available.
Manage Your Cash Flow
Start by contacting your banks to receive deferment and forbearance on existing business loans. This action will temporarily reduce the amount of money you pay each month towards operating the business. Make a list of critical expenses—include employee salaries, rent or mortgage, utilities, and other monthly expenses. Contact everyone on the list (excluding employees) and ask them about options to defer payments or spread out your costs to make them more affordable for the next two or three months. In all likelihood, the companies already have programs in place to provide you with assistance.
Review your inventory and accounts receivables for opportunities to reduce costs. Purge old or obsolete inventory by putting it on clearance, or donating it to charity. Invest in low-cost accounting software to streamline your billing process and easily track payments to suppliers.
- Negotiate better payment terms with your suppliers
- Set credit terms that shorten the customer’s payment period
- Collect outstanding debts with phone calls and written requests
Maintain Relationships with Current Customers
It may take time for your customers to start buying again. However, it would be best if you stay connected to get them to return to your business when they feel comfortable enough to resume shopping. Excellent communication is the foundation of a stable relationship. Keep your website updated with helpful information and send out targeted e-mails highlighting products they may like this season.
Deliver Products in New Ways
Living in quarantine for several months has forced many people to move beyond their comfort zone and try new ways to order food and merchandise. The surge in popularity of companies that use personal shoppers to purchase food and make home deliveries has added a new dimension to how we conduct transactions. Consumers will continue to seek convenient delivery options even after COVID-19 becomes a memory of the past. Many hardware stores and home improvement centers have websites that enable customers to place and pay for orders that can be picked up at the store. Offering contactless delivery to homes and businesses within the community is a service most customers will appreciate.
Try to Keep Your Staff Intact
It can be hard to keep everyone on staff when you can’t cover all of the bills. However, a good team will do everything possible to support your efforts to make the business profitable once again. Many of the COVID-19 loans are designed to help you pay staff and purchase inventory, so it’s critical to understand your options. Now is a good time to cross-train your staff or update their skills by encouraging them to take free or inexpensive online courses. Remember, you’re in this together.