For most of us, business as usual is no longer the case. The Coronavirus crisis has led to an unprecedented, nearly global lockdown, with only those businesses deemed essential or capable of working remotely still operating. Even for them, work is anything but normal. This crisis is affecting us all.
The virus knows no boundaries, making social distancing, stay-at-home orders, and mandatory face masks our new realities for the unforeseen future. Weâ€™re starting to see some glimmers of hope as evidence of flattening curves begin to emerge, but weâ€™re a long way from recovery.
Businesses of all sizes from mom-and-pops to the worldâ€™s largest airlines have had to make gut-wrenching decisions to lay off or furlough staff. In western countries, tens of millions of unemployment claims in a matter of weeks have been filed, eclipsing previous records by a landslide. However, layoffs only go so far. Other bills must still be paid, despite a lack of or significant shortfall of revenue.
Some businesses have pivoted in order to stay afloat. Restaurants may survive by switching to deliveries and curbside pickup. Some are donating meals to feed first responders on the frontlines. Fashion companies are no longer making dresses, sportswear, and other forms of apparel; instead, they are sewing facemasks, which are in short supply. Distilleries are using their alcohol know-how to produce hand sanitizers, another product thatâ€™s in high demand. Fitness centers are holding virtual fitness classes. These measures are both altruistic and practical. Theyâ€™re short-term initiatives that could help these businesses through these difficult times by bringing in some revenue while also enabling them to retain some staff.
Other businesses have had to quickly become virtual. Fortunately, the technology for virtual work has been in place for years now. Zoom, Google Meet, Slack, Basecamp, virtual private networks, and other online tools are enabling a large portion of the workforce to work from home. Unfortunately, some of that work may shrink the longer the crisis exists and the economy contracts.
So, aside from reinventing your business and enabling remote work, whatâ€™s a business owner to do? Here are a few ideas:
- Reallocate spending â€” While rent and other fixed expenses arenâ€™t going anywhere, some expenses will no longer materialize due to shutdowns. For example, if your company regularly attends trade shows during the summer, all of those travel-related expenses wonâ€™t be incurred. If youâ€™ve already paid, the event itself may or may not be refundable, but hotel and airline costs might be. Likewise, if you receive marketing development funds from a partner that you typically use to promote its brand at now-canceled events, work with your partner to see if you can still use those funds in a creative way to drum up business.
- Communicate with your creditors â€” Work out arrangements with your landlord, bank, and other creditors in advance. There may be more flexibility there than you think. Even if there is not, itâ€™s better to start a conversation than simply stop paying bills with no outreach whatsoever.
- Find out what government programs and loans are available to you â€” In the United States, the Small Business Administration is a good first stop. Not only will you find existing SBA funding programs to help you out, the CARES Act, which was signed on March 27, 2020, offers $376 billion in relief to small businesses and workers. CARES Act programs include: a Paycheck Protection Program; working capital / Economic Injury Disaster Loans of up to US$2 million at 3.75% interest for small businesses; a $10,000 emergency grant; up to $25,000 SBA Express Bridge loans; and automatic deferments (debt relief) for current SBA Serviced Disaster Loans. You can learn more about these programs at the SBAâ€™s website or by calling 1-800-659-2955. Other countries are implementing similar programs.
- Your state or local government is another potential source of economic relief. For example, businesses in California with less than $5 million in taxable sales can defer sales and use tax up to $50,000 interest-free. A small business loan guarantee program is also available from California for individuals who donâ€™t qualify for federal funds. Check with your stateâ€™s governorâ€™s office to find out what programs are available to you.
- Use technology â€” Use technology as much as you can to stay connected, find funding sources, market your essential services, learn a new skill during your downtime, or even transform a portion of your business into the digital realm.
COVID-19 has changed the business world dramatically in a short period of time. Disasters demand that we become resourceful and help one another. We will get through this. Humanity is resilient, and help is available. Stay safe!
Featured photo by Jernej Furman