Small business owners are one of the many groups hit hard by the spread of coronavirus. Many have to close and can no longer earn money because of the lockdown. Understandably, this leaves a lot of people scrambling to make ends meet and keep their companies alive.
In order to lend some assistance, we have put together a guide for small business owners on how to get through the lockdown. The tips below are aimed to keep you financially afloat, find ways to keep serving your clients, and work on your enterprise while waiting for things to blow over.
At the same time, this is a call for you to weigh in with your own tips and resources so we can help each other out in these trying times. Therefore, stick around until the end and contribute to the comment section if you can.
Emergency Cashflow Measures
The most immediate question is that of money. How can you continue to pay your bills while your business is affected by the shutdown? How can you ward off bankruptcy? This is what this first section will focus on.
1. Create a Budget
The most important thing to get your finances under control is to know how much you have vs. how much you need. You are much better equipped to deal with a problem if you know its extent.
Therefore, the first thing is to create a clear picture of your financial situation by listing all of your fixed and variable costs:
- Fixed — This is what you have to pay either way like rent and utilities for both your home and office space, insurance, and other business expenses but also groceries and other essentials.
- Variable — These are things that are not essential, like a gym membership, media subscriptions, and services you might not be using continuously.
In the end, you should have a good overview of where your money goes, for what purposes, and how much. If you are struggling to put all of this together, there is software that can help you. The is also a great post on budgeting here.
2. Cut What You Can
From this point, it’s time to see where you can cut expenses to save money. Of course, the pile you will most be looking at are your variable costs. Cancel what is not absolutely essential to your life and business, be ruthless about it.
Thankfully, many subscription services these days allow you to shut them down within a relatively short time frame and also to return at a later time without losing your data.
For other expenses, it might make sense to try and negotiate with stakeholders. If you are in a real bind financially, some of them might be willing to forgo payment temporarily.
There are enough stories online of landlords deferring rent or working out a payment plan with clients hit hard by the crisis. In the same vein, you might be able to put contracts on hold for the time being or ask your bank to defer loan payments.
It’s worth asking, what do you have to lose?
3. Take Advantage of Government Programs and Tax Breaks
Due to the crisis, many governments of the world have taken extraordinary measures to lighten the load on businesses. One of the most common steps is to extend tax deadlines for much longer than usual.
This can seriously lighten the load for some small businesses during the coronavirus crisis, so it makes sense to check what the rule is for your location.
In addition, many countries have set up emergency funds to help small businesses and individuals bridge the crisis financially. This can take the form of low-interest loans, subsidies, or straight-up cashouts.
Here, it’s important to research what your local procedures are and how you can get access. For the USA, Forbes is trying to keep a running list of coronavirus loan and grant programs for small businesses. If you are located elsewhere, make sure to check government websites to find relevant information.
Keeping Your Business Going
Alright, now that we have covered immediate financial triage and how to protect your overhead, it’s time to talk about the other part of the equation: continuing to earn money and/or extending your income.
1. Communicate, Communicate, Communicate
To continue your business, if you have people working for/with you, it’s important that you are honest and open about the situation. Communicate where you stand business-wise and what the consequences might be.
If you have to lay off people (even temporarily) or reduce hours, it’s better to prepare those who look to you early on rather than jump it on them suddenly. This gives them a way to prepare and take measures themselves, such as looking for additional clients or filing for unemployment (see the last point).
Naturally, if your business continues to operate and your workers are in any way in danger of being exposed to the virus, give them all the equipment needed to protect themselves and create processes that keep them healthy! This should go without saying!
Another group that needs communication and assurance are your customers. Let them know how the current situation is impacting your business and the measures you are taking to address it.
If you are open for business, let them know. If there are changes to the workflow, like moving in-person meetings to online communication, or services that you can’t offer at this time, make sure to communicate this as well.
2. Find Different Ways to Deliver
In addition to the above, it’s time to see what changes you can make to your business to keep it open during coronavirus lockdown. Depending on what you are doing, you might be able to change your offerings so that they are more fitting to the current situation.
What do your customers need right now that you could provide? How can you adapt your services and products so that they address the situation your clients find themselves in? Maybe there are some real business opportunities here!
For example, many restaurants stay open by switching to full-time delivery. Some bars have started offering takeaway cocktails or drinks delivered to your door. There are even breweries who have switched from making alcoholic beverages to hand sanitizers.
Likewise, if you are a business consultant, you could pivot your offerings to help small businesses deal with remote work and other coronavirus challenges.
3. Make Remote Work Work
We have recently published a post with advice on how to make remote work manageable for individuals. However, there are additional considerations for those who are part of a team. Here are some steps to create a smoother process:
- Set expectations — Talk to your employees and people you work with how to respond to the changed work environment. Agree on a way to report the work being done and stay in contact. Create guidelines and procedures, update contracts if necessary.
- Move processes online — Put what you can into the cloud. Create VPN access for anyone who needs to use things on a company server. Make yourself and your coworkers as independent of one physical location as possible.
- Keep an open ear — Regularly check in with remote workers to see how they are faring and if they need support. Keep a virtual “open door policy” and encourage people to come to you with any issues.
Do a good job and, who knows, maybe work from home will become a permanent fixture in your company. You can use the tools in this checklist to make the switch to remote work easier.