The world has hit its reset button. When COVID-19 became a global pandemic, countries went into lock-down mode to prevent the spread of the deadly virus. Businesses, large and small, shuttered their factories, closed their restaurants, and told employees to work from home for the foreseeable future. Everything happened so quickly, it still feels like an out-of-body experience to the millions of small business owners now wondering how they will reopen their doors once it is safe to resume normal activities. If you run a business, you cannot wait for the green light to figure out how to get your company up and running again. You need to act now, when almost all economic activity is at a standstill, to save your business. Below are suggestions for the next 1-3 months:
1. Assemble Your Board of Advisers – Now is not the time to navigate uncharted waters alone. Connect with the key people you turn to when making big decisions in your business. The team might include your attorney, accountant/bookkeeper, key employees, partners, suppliers, and vendors. Set up a meeting(s) to determine how you will successfully get through this time by avoiding the biggest pitfalls. Your advisers will see things in the road ahead that you might miss. Do not skip this critical step.
2. Review Your Original Plan for 2020 – Once your team is assembled, look at your original plan for 2020. What parts were blown up by the pandemic; what parts are still salvageable? More importantly, how can you replace the missing parts of the plan with new opportunities to help you stay in business, and possibly even achieve your original goals for the year?
3. Review Expenses and Receivables. Minimize the variable, non-revenue generating expenses in order to sustain yourself over the course of the quarantine and the recovery. Separately, according to several reports, small businesses have $900 billion in outstanding receivables. Imagine the impact of having half of those receivables paid in the next 15 days. The sum would exceed the current stimulus package designated to small businesses and they would receive the money immediately. Be the squeaky wheel and remind your customers that paying their invoices now will go a long way to keeping your doors open tomorrow.
4. Get Creative to Generate Revenue - Offer gift cards, gift certificates, and incentives for customers to pay you now for work done in the future. Create a “win-win” situation to make it easier for your customers to spend money with you as opposed to spending it somewhere else.
5. Evaluate Your Supply Chains – The ripple effect was more like a tsunami when China’s exports grinded to a halt in January. Millions of small businesses in the U.S. found out the hard way where their products came from as supply chains were disrupted and their shelves went bare. To avoid a similar situation in the future, investigate locally based suppliers as a backup plan to meet demand if/when there is another slowdown across the globe.
6. Maintain Access to Capital – The worst time to seek credit is after a crisis hits; the best time is when the economy is humming along. Unfortunately, we are now in the thick of things with the coronavirus. Talk to your board of advisers and determine how much capital you will need for the next three to six months and where you can access it; leave no stone unturned.
Additionally, specialty financing for specific needs can be an excellent option for your business. For example, lenders such as Wheeler Financial from Pitney Bowes™ can provide a variety of options that can allow your company to purchase critical equipment and technology. Using these types of options can allow you to optimize your cash flow and preserve your primary credit facilities.
7. Pursue Government Aid - But read the fine print. The PPP and EIDL programs are designed to help millions of small business owners get through the current situation. However, it might take much longer than anticipated to get the money into the hands of businesses that need it the most. You should also check out state and local loan/grant programs. Again, leave no stone unturned when looking for money to help keep your doors open.
Lastly, the key to your survival and success will be making every single day count while the world is in reset mode, and by holding yourself and your business accountable. Be proactive in determining your destiny and you will greatly increase the chances of achieving your goals in 2020.