The novel corona-virus that causes the respiratory disease COVID-19 has been detected in 60+ countries, including the United States. At the time of this writing, there have been 236,877 cases and 9,828 deaths worldwide. While only 155 of these deaths have occurred in the United States, government interventions and general consumer fear about the unknown is taking a toll on many small businesses.
In times like these, small business owners can feel helpless as they watch their bottom line slowly erode from circumstances out of their control. But there is something you can do to empower yourself and minimize the potential impact the corona-virus will have on your business.
Get and Stay Informed
The worse thing you can do at a time like this is bury your head in the sand. Anxiety can take hold and it can be tempting to tune out. Knowledge is power and the more you know about what’s going on the better your decisions will be. If you are a business owner the sooner you realize the impact of social distancing the sooner you could make plans. Be in front of the curve. Don’t wait to see what everyone else is going to do. But You must be careful. There is a lot of bad information out there. Find sources you know you can trust and make informed educated decisions.
Don’t Wait To Be Rescued
You are the master of your own destiny. I can’t over emphasize this enough. If you are waiting for any reason, waiting to see what your competition does or waiting to see what the government does or just waiting until you have more information…by the time you do make an adjustment it could be too late. You must act now.
And don’t assume there is going to be some great economic stimulus package that is going to wave a magic wand and save the day. We are hearing a lot about low interest rate government loans. You can’t (necessarily) borrow your way out of a revenue problem. You’ll need to implement a multi-tiered approach that tackles both maintaining revenue and reducing expenses.
Find New Revenue Streams
You can’t just react to the new environment; you must adapt. We’re seeing a lot of companies waive fees and offer free services in reaction to the impact of social distancing. While this strategy can create goodwill and publicity, it can also be dangerous. There is only so long a business can be in “exception” mode before cash flow starts to dry up. A better option is to adapt and find new forms of revenue. Think about the assets and people you already have and how they can be used in new ways. You might have to really think outside of the box and get out of your comfort zone. But this is about survival, and the faster you can adapt the better. For instance, if you own a small moving and storage company, you might consider using those trucks and drivers to deliver packages for Amazon Flex. Wedding and event photographers can use their existing software to offer online photo editing services.
Pivot Your Business Model
Essentially “pivoting” your business is shifting to a new strategy when the current strategy isn’t meeting the needs of the market. Right now, social distancing is creating the need for a lot of businesses to pivot. A restaurant with a large dining room isn’t meeting the needs of the market. That’s why many are pivoting to take-out and delivery. But using a delivery service like uber-eats or door dash can be expensive for a restaurant. Owners have to thinking creatively. Some are using current staff to be delivery drivers. This solves 2 problems. It keeps employees employed and it is cheaper than using a deliver service. Grocery stores are even jumping on the band wagon and offering deliver services using current employees as drivers.
A lot of businesses are pivoting to more online and virtual services. Counseling firms who normally see in house patients are pivoting to tele-med. Gyms are doing online training sessions and private lessons using products like zoom. We’ve even seen a package store pivot to online wine tastings. For a monthly subscription they will send you 6 bottles of wine, then they are doing a live stream of the tastings where clients can ask questions about topics such as potential food pairings. During the live stream they offer and sell other wines. It’s really propped them up.
Be nimble and quick. Get a team together and start thinking about current market needs and how you can meet them.
Conserve Cash Flow Now
Every business should have an emergency reserve fund. If you already have one, or if you don’t, my response is going to be the same…save more. We do not know how long the corona-virus will last and there is no way to predict the full impact it will have on future consumption. Start conserving your cash now. Rethink any major capital projects you have going on. It may be time to put them on hold. Dig deep into your budget and find all the areas you can free up any liquid capital. You should be analyzing all non-essential expenditures for any potential savings. Try avoiding any indulgent expenditures over the next few weeks. And…while I never enjoy considering measures that effect someone’s lively hood you may have to consider temporary layoffs.
Prepare For Employee Issues
The most likely direct business problem owners will face involves their number one asset – their employees. Not only will business owners have to deal with the potential of employees being out of work due to illness, in the wake of recent school closings, employers will also have to maneuver the complexities of employees needed to stay home and take care of their children. There are legal issues at play as well as maintaining employee morale. We have provided a separate article here to help you.
Keep Yourself, Your Family and Your Team Healthy
Health is wealth. As a business owner you are going to have enough distractions and issues to deal with. It is going to me more costly if a member of your team gets sick and can’t work. Or if you can’t work because your sick or have to take care of a family member that is sick. You problems will only be compounded emotionally and financially if that happens. So, one of the best things you can do for the continued success of your business is to keep everyone as healthy as possible. This means following the best practices issued by the CDC/WHO, which we have provided a link to here.
Remember fortune favors the prepared. Stay smart, stay strong and remember that we are all in this together.