Small businesses continue to struggle.
Nationally, about a third of small businesses temporarily stopped operating by mid-April, and by mid-May, more than half had laid off or furloughed employees, according to the Facebook and Small Business Roundtable.
McKinsey and Company’s small business surveys predicted that before accounting for intervention, 1.4 million to 2.1 million small businesses (25 to 36 percent) would close permanently due to disruption during the first four months of the COVID-19 pandemic.
Let’s abruptly switch gears. No more dismal talk.
On the bright side, you can do a lot right now to help your business through these tough times.
10 COVID-19 Tips for Small Businesses
You want to know exactly how to handle your business during these tidal waves—and nobody knows what will happen next. (Where is that crystal ball when you need it?)
A lot does depend on the nature of your business and your specific needs. However, these general tips can help almost any business feel like they’re floating on a lazy river.
Tip 1: Stay Relevant in your Market
Stop bemoaning the fact that things have changed. They always change! This means you must stay relevant to your target market. Your customers have a long list of distractions, choices, opportunities, and ways to communicate. It’s easy to lose—quickly. You don’t want to end up like Blockbuster, Polaroid, and Borders, which all have tombstones.
Loss of relevance could become the death of you—especially during COVID-19. If you’re a dry cleaner, you might want to find a new job—quickly. People wear sweats to work now.
Tip 2: Check into Government Support
Haven’t yet tapped into your government support options? Why not? It’s the most obvious way to get help. The Paycheck Protection Program, established by the CARES Act through the Small Business Administration, provides small businesses’ pay up to 8 weeks of payroll costs, including benefits. You can also use this assistance for mortgages, rent, and utilities. If you’re registered in more than one market, you can explore government support for small businesses in other countries as well.
Tip 3: Implement Technology
Have you always operated a brick and mortar business? Maybe it’s time to start creating digital products. Have you always interacted with people face to face? Time to zoom in on Zoom and take advantage of all it has to offer.
For example, let’s say you’re a therapist. Have you tried rescheduling patients, wearing masks when conducting psychotherapy sessions and more, but you’re still losing clients? Why not offer your services online? If you’ve already tried this to no avail, consider other options using other technology.
Maybe you’re struggling with pre-order or drive-up options for your brick and mortar business. What other options can you try?
How can you stay organized with your current employees? Asana, Trello, TimeDoctor—they all maximize efficiency, organize your schedule and help you monitor your employees and progress.
Tip 4: Ask the Hard Questions
Make sure you’re taking a hard look at the balance sheet. If you’re a mom-and-pop restaurant, do you really need 11 servers? Can you get along with nine? If you’re top-heavy, can you cut down?
Now’s the time to streamline and ask what you actually need in your business. (Within the context of what’s possible to get the work done, of course.)
Scour the balance sheet and figure out where you can eliminate help, especially that freelancer you have to hand-hold through every process.
Tip 5: Ask Whether You’re LEAN Enough
Not you! Your company! Lean is a powerful methodology that delivers the best possible product to customers. In the process of offering a superior product, it eliminates waste. The five lean principles include:
- Specify value from the standpoint of the customer.
- Map the value chain or value stream.
- Create flow.
- Let customers pull value from upstream processes.
- Seek perfection.
How much excess waste are you producing, and in the process, wasting money? Consider hosting a kaizen event to fix your processes.
Tip 6: Get Empathetic
Earn your customers’ trust using empathy. If your customers are also business owners, you know they’ve experienced the same tough decisions you’ve had to make (or worse).
You can transform your business by letting your customers know you’re there for them—and that you completely understand! Know the tough issues they’re wrestling with and reach out.
Reach out to customers whenever any issue crops up or an update needs to be conveyed. Keep negotiations open-ended and limit problems. Continued issues on your end might be the reason they axe you! (Yikes!)
Tip 7: Learn Tax-Savviness (If You’re Not Already an Accountant)
Ever heard of the new Employee Retention Tax Credit? It’s a 50 percent tax credit for the first $10,000 of compensation, including the employer portion of health benefits, for each eligible employee. Glance over these tips if you’re not crazy about the accounting side of your business:
- You can delay the employer portion of federal payroll tax payments.
- Businesses that have net operating losses (NOLs) in 2018, 2019, or 2020 can carry back five years instead. Pass-through businesses and sole proprietors can also take advantage of relaxed NOL limitations.
- If you were due to receive corporate alternative minimum tax (AMT) credits at the end of 2021, you can claim a refund immediately.
- You can increase business interest expense deductions on your tax returns.
- You can write off costs associated with improving facilities.
Tip 8: Act Rather than React
Sorry, sorry for including such a nebulous tip. Might as well just advise you to whip out that crystal ball, right? (“If only I could see the trouble coming ahead of time… I could have predicted the coronavirus…”)
Weeeelll, actually, you know deep down that you need to make sure your business is deeply immersed in action rather than reaction. You already know this. It’s easy to go into paralysis mode. It takes time and practice to learn how to respond appropriately (particularly in the midst of a worldwide pandemic). Cultivate your brand strategy to be more proactive if it needs a boost and stick to those company values like a bear mauling an elk every day.
Tip 9: Monitor, then Negotiate
Do you account for every penny? Know where it’s all going in your cash flow statements and balance sheets. Then, take the most important step and predict where your business will be, money-wise, in three months.
Project as far out as possible using as sophisticated measures as you can.
Next, if you see things are looking or will look kind of hazy, negotiate with suppliers, contractors, and even Ms. Betty, the landlord. Any way you can save money during this time is a good thing.
Tip 10: Separate “Wants” and “Needs”
You know the basics on this one. You can carry them into your personal life—the $150 jeans versus the $20 jeans. The brand-new car versus the used car. Restaurant food versus brown-bagging it.
You know this stuff, so apply it to your business. Let’s say there’s a conference you really want to attend, but it’s pricey. Use that cash to land a new client instead.
Use this discerning attitude to shore up your capital reserves. Make long-term contracts the name of the game, offer prepayment incentives and discounts on long-term buys. (As long as the terms are adequate.)
Being a small business owner right now might feel like you’re fighting a dragon with a toothpick.
Think of today, right now—as an opportunity. Think of it as Corona Christmas and figure out how the pandemic could actually work in your favor.
Maybe you’ll launch a new product. Maybe new customers will see your value. Maybe you’ll decide, “Heck with it, I’m going to make human bubbleheads because my customers are sick of masks. I know they’ll buy them.”
Whatever you do, consider every aspect of your business, use these tips and you may come out of the pandemic better than ever.