With rapidly raising Covid-19 cases and deaths globally, the effects of the Corona Virus are being felt across the board, especially among small and medium level businesses. While the virus has hit Europe and China really hard, the rising cases in the United States, Spain, Germany and other places around the world are a concern for any small business out there.
Lockdowns, travel restrictions, and diverse measures are already being observed globally limiting movement within and without the borders of many countries; businesses have been hit hard and largely impacted across the board. Small businesses have had to cancel travel and diverse business-related events. According to a survey, 21 percent have cancelled for less than 30 days, 39 percent by up to 90 days, 8 percent by up to 180 days and 1 percent by up to 12 months.
Also, over 81 percent of businesses have instructed their staff to avoid going to work and operate from home. At the same time, Over 60 percent of business owners have reported a negative impact on their finances courtesy of Covid-19 with only about 10 percent claiming to have seem some positive impact on finances.
In fact, around 93 percent of business owners expect the virus and the new reality it has brought globally to disrupt the way current and potential clients and customers behave, including huge disruptions on service providers, potential service providers and new vendors.
With 38 percent of small business owners indicating their governments haven’t really reacted as cautiously and fast to address the threats posed by Covid-19 as they’d want, most are on a survival mode right now. Many businesses and their owners have no idea where to start or exactly what they need to do.
Here are top tips any small business owner can take to survive the Covid-19 crisis.
#1 - Plan finances for the next few weeks or months
With lockdowns, travel restrictions, closures and government directives to keep away from business districts the reality of remaining closed for weeks or months is very real. As a small business owner, this is the time to plan how bills and expenses are going to be met within the next few weeks or months. According to the US President, the corona virus crisis could go well beyond July and August 2020. To prepare accordingly:
- Budget your cash-flows: You already know when fixed costs are due, including variable ones. Do plan your money well to cater for them within the next few days, weeks or months you believe your business will remain open.
- Look into unnecessary expenses/costs: Make sure you know costs and expenses that aren’t a priority per-se. either do away with them or cut their costs if they don’t help with revenue production or keeping your business afloat.
- Letting employees go/pay cut: While your staff is the best asset you have, you might have to terminate or lay off some of them. Even so, try not to lay off so many if you can help it because the cost of hiring others or getting your former employees back will be costly months later. Request laid-off employees to apply for unemployment benefits if available and promise to rehire as soon as possible once things start working again. You can also try other furlough ideas to keep your current employees such as reducing salary for everyone and keeping them at work, allowing them to work from home for a full salary or less, create casual job routine until situation normalizes among others, while ensuring no employee is asked to offer their services for free. The worst scenario here is that you might have to terminate employees and close your business.
- New revenue source: If your line of business is hard hit by lockdowns and restrictions think of new ways to make money, keep your staff and avoid shutting your business that soon. For instance, if you own a hotel business try to maximize on deliveries to homes and take-aways. The same applies for all types of businesses where you can sell online or accept orders and deliver yourself rather than allow customers to pick them and put other buyers and staff at risk of the virus.
- New resources/loans: Do you have access to financial resources such as loans? Put them in consideration as you plan for tough months ahead.
#2 - Mind your taxes beforehand
Just like most overheads tax payments are a must. For instance, payroll taxes must be paid with Corona Virus or without. The government expects some taxes to be taken care of even with payment extension. For your own good you might want to ensure all taxes are paid and pre-plan accordingly weeks to months ahead. Even so, make the most of government tax breaks, extensions and other measures put in place within your jurisdiction in response to Covid-19.
For instance, the US Fed has already extended tax payment for three months meaning small businesses and other companies have up to 15th July. Even with these interventions in place taxpayers must file extensions or taxes. It means you can extend your tax payment or file by say, 15th April. Payroll taxes attract interest and penalties and must always be paid on time. Ensuring that you don’t miss to avoid extra expenses at a time when the business environment is already disrupted helps a lot.
For businesses in tax trouble in the UK as a result of Covid-19, Her Majesty Revenue and Customs offers VAT deferrals up to June 2020. A scheme known as Time to Pay of up to 12 months or more in case of very exceptional circumstances is also accessible, allowing a business owner to pay taxes easily without too much pressure.
#3 - Craft and emphasize your internal Corona Virus policy
As you might already know, so many policy guidelines and measures are already in place out there as released by governments, states, provinces, counties, kingdoms etc. However, it’s highly important to ensure that you’ve an internal Covid-19 policy and safety measure in place that every employee knows about. This is important if your line of industry is within a critical industry that hasn’t been shut by the virus or any government lockdown.
The policy should stress on government guidelines on public health, such as social distancing, wearing masks, hand sanitization, maintaining proper hygiene and incorporating emergency measures as much as you can. Sick leaves need to be factor-in and flexibility encouraged in case employees need to be away for treatment at a time when hospitals seem to have shutdown except for Corona Virus victims.
Also ensure employees are never crowded at any given time, can work from home if need be to self-isolate and keep away while still earning a living and delivering for your business. Also, large or small events bringing people together should be cancelled or postponed indefinitely or use voice and video conferencing to handle them if need be.
Keeping your customers, employees and the public that might interact with your business one way or the other safe will keep you running for a while if not longer until the virus disruptions are over and things returned to normal.
Video: How small businesses can survive the coronavirus pandemic | FOX5 Las Vegas
#4 - Disaster funding for small businesses
At a time when a pandemic has ravaged the globe and almost every business owner is crying foul, any assistance you can get to remain afloat as long as possible is welcome. Governments globally have disaster funds for affected small businesses or have or planning on legislating on cushion funds for businesses and individuals. The US federal government for instance already has such a funding in place carried out by the SBA (Small Business Administration) and can authorize up to $2 million to a small business to help the business cater for its operations, payroll and debt.
In the UK, the government is offering grants of about £10,000 to small businesses, including specific grants to businesses within certain industries, such as small businesses with a valued rate of £15,000- £51,000 who can receive up to £25,000 in grants. British Business Bank is also availing £5 million loans and below to small businesses within the CBILS (Coronavirus Business Interruption Loan Scheme).
Repayments are always kind and palatable with some up to three decades to repay. However, ensure you meet the criteria and have all the financial documents your jurisdiction might need. This includes financial statements and personal guarantees by the owner or partners with at least 20 percent stake in the business.
Considering the prevailing circumstances loans are being processed fast but could take weeks before the money is released. In case this is a lifeline you may want to consider do stretch the funds you have long enough until you receive your government’s cushion funds. Even so, remember the funding is still a loan you will be repaying in due course.
If you have been facing financial problems and decreasing business you might want to think about other means and avoid getting into debt or more debt. You could take drastic measures to regroup at this time, such as shutting your business down entirely and taking the next few weeks or months to save the resources that you have and avoid more losses. Such measures during a pandemic aren’t signs of failure but strategic and pragmatic.
#5 - Offer gift cards
Almost every person in the world today knows businesses are struggling or just about shut. However, like many businesses in the United States and elsewhere you can use gift cards to remain afloat, keep your customer base and build customer loyalty. There’re even lots of drives offline and online for people to help their local businesses and support them to avoid total collapse.
While people might not want to receive anything now until the virus is gone to avoid contamination, a gift certificate bought today can be used at a later date. While you can still maintain a skeleton staff and some operations just to remain afloat, gift cards sold today for future use can help inject some much needed money into the company. To make the deal even better, you can offer $50, $100, $500 etc. gift certificates or cards at a discounted price.
#6 - Prepare well for sales and marketing
It’s important to keep your customers posted on your plans during the pandemic. Proper and clear communication will help you survive the crisis and your customers or clients will know where to find you in case you decide to close your doors. For instance, you can make sure clients have your contacts or all the company contact details are known just in case they want to purchase your services or products even with lockdowns.
With social media being the theater where localities, cities, nations, brands and customers meet you should be there driving engagement, updating your clients and pushing for current and future business orders. This is also the time to think out of the box and market in diverse ways.
Know what your customers really need currently, reach to them, offer web-based customer care services and focus on them than ever before. If you can’t market now try to build and cement the relationship your business has with its customer base. If you deal with physical products you might want to think of new ways to deliver them to your customers. This can be via mail, residential delivery, creating a section where packages can be picked in your company without people having to touch etc. Do offer discounts too if you can, considering so many people are facing tough times.
#7 - Time to improve on shortcomings and gaps
Chances are your services and operations are almost grinding to a halt. While many business owners are closing shop and staying at home watching one TV Series after another and following news of the epidemic, you can be different without being careless. You probably have wanted to improve on something, such as some machinery, product manufacturing, efficiencies, marketing content, social media reach, budgeting and research, among others.
Use this time together your team even if you’ve to connect remotely towards accomplishing these things that will improve your product or service delivery, among other things. If you had postponed changes that should have been done, this is the perfect time to do it or else you might have to wait and not do it any time soon.
Of course you can do so many other things to keep your business surviving and around until the Corona Virus is dealt with or gone. Most importantly though, don’t let the epidemic’s widespread consternation, fear and panic stop you from making changes or inculcating policies sufficient enough to build your business and enhance it without putting yourself or your team at risk of contracting the virus.
More on the topic: How to Sell Your Business During the COVID-19 Pandemic