As the COVID-19 pandemic rages on, affecting hundreds of thousands of people, and keeping hundreds of millions at home, the beginnings of recessionary fear have begun to hit small businesses. Today, we will go through a few elements that will help you get your business through this (and many other) anxious times.
The first thing that you need to consider is that this thing won’t last forever. Most businesses, if they had no contingencies in place, or if they were forced to close by mandate, probably have been burning through cash for the past month. Those that haven’t are fortunate. Small business owners need to stay proactive during this period, altering their company’s remote work strategies if need be, and searching for low-interest loans to get them through this difficult process. Let’s get into some of the most useful tips on how to get your business through this disaster.
The first tip is probably the most important tip. This situation came upon all of us pretty suddenly, and to be frank, not a lot of business’ disaster recovery programs consider “supervirus” as a likely scenario. Floods, fires, electrical storms, the temp clicking on a spear phishing attack...these situations your business is ready for. Worldwide pandemic is a stretch. Forging ahead, you need to know that you aren’t alone, but how you react will largely determine how you come out the other side of this thing.
If you are still in operation, you will need to cut as many redundant and unnecessary costs as you can. In times like this, your company needs the flexibility that comes with liquidity. That means eliminating a lot of the extra stuff that you pay for, such as travel (this one is obvious), team outings, company food, and non-essential marketing. This will ensure that you have the financial flexibility to at the very least have a business to reopen when the “all-clear” is given.
Additionally, don’t take on any new investments that don’t immediately relate to getting your business through this situation. There will be millions of businesses looking for additional capital, and there should be enough money and favorable interest rates that most businesses can get the capital they need without putting their whole business in jeopardy.
You have spent a long time cultivating and maintaining your business relationships. It is more important now than ever to do what you can to maintain those relationships. This includes your financial institutions, your vendors, and your clients. Regrettably, some businesses won’t make it through this, but the lion’s share will and making sure that your business is on solid footing and there to support your client base will be essential as things begin to normalize.
Chances are that the terms you agreed upon and the support from your clients will shift considerably. You will want to proactively budget for this. You can expect higher interest rates, a lower availability of massive available capital, and shorter terms in which to pay off the money you do borrow.
As stated above, there should be a lot of available capital through government-sponsored programs, and these loans will carry with them lower interest rates, but if you take the proactive steps to ensure that you budget for the difficult times ahead, your business will undoubtedly be in a better position when we see our way through this mess.
The COVID-19 outbreak has left the small business owner a lot to take in. One of the most important suggestions we can give is that you trust that the decisions you’ve made up to this point--and that you will make over the crucial next few months--are in the best interests of everyone that depends on your business. If you are forced into making cuts into your human resources, you will want to make sure that they are protected as not to put your business in additional peril from having a tarnished brand.
Making sacrifices is always hard, especially if you were really thriving before the pandemic hit. Take in as much information as you can weigh and have the confidence that you can make the right decisions. This will keep your business, and the people who depend on it, ready to properly adjust to the situations that are thrown at it.
COVID-19 has millions of businesses and hundreds of millions of people uneasy. To get through it you will need help. Contact the knowledgeable consultants at XFER today at 734-927-6666 / 800-438-9337 to let us help your business get through this unprecedented situation.