6 Ways To Rebuild Your Small Business After COVID-19 - Forbes

6 Ways To Rebuild Your Small Business After COVID-19 - Forbes


6 Ways To Rebuild Your Small Business After COVID-19 - Forbes

Posted: 30 Apr 2020 10:11 AM PDT

The COVID-19 outbreak has wreaked financial havoc around the globe, leaving many small-business owners struggling in its wake. According to the National Federation of Independent Business (NFIB), as of March 30—still early in the crisis—92% of small businesses said they had suffered negative effects as a result of the pandemic. Just 5% of small-business owners said they had experienced no effects at all.

While the short-term outlook for small businesses varies greatly by industry, it's important to consider what recovery mode will look like once the economy begins to return to a state of normalcy—or establishes a new normal. Having an exit strategy in place for after COVID-19 can help you be prepared to hit the ground running and rebuild. If you're not sure what your coronavirus exit plan should include, this guide can help with getting your business back on track.

1. Assess the Financial Damage

The first step in developing a rebuilding plan for COVID-19 is determining just how deeply your small business has been affected.

There are different layers involved, starting with the hard numbers. If you haven't updated your financial statements—such as profit and loss or cash flow statements—recently, it's helpful to do that now. You can then compare them to last year's numbers to see how much your business may be down. And while only a small percentage of business owners say they've benefited from the pandemic, 3% according to the NFIB, it's possible that the damage might not be as bad as you think.

Aside from the hard numbers relating to sales, profits and cash flow, consider other ways in which your business has been affected. For example, if you've had to lay off some or all of your employees, you'll need to factor that into your rebuilding plan. If you've cut your advertising and marketing budget down, or some of your customers have migrated toward competitors, then those are things you'll need to account for as you identify financial resources to help you recover.

2. Take a Second Look at Your Business Plan

Your business model may have worked perfectly fine pre-COVID-19, but coming out of it may mean you have to do some fine-tuning.

Specifically, you may need to consider how your business can pivot to adjust to a new normal. For example, if you previously relied on foot traffic to a brick-and-mortar location for sales, you may need to look at a digital expansion to accommodate the higher numbers of people who are shopping from home.

You're not in this alone, however. In partnership with the Small Business Administration (SBA), SCORE offers small businesses access to mentors who can offer guidance and resources as you look to build—or rebuild—your business after the crisis. Remote mentoring services are available, along with free webinars that address coronavirus-specific issues.

Analyzing how your overall industry has been affected by the coronavirus pandemic also is helpful. When looking at your competitors and the industry as a whole, pay attention to the trends and focus on finding the opportunities. Being able to find a gap or need that your business can fulfill that's been neglected up until now could be critical to reclaiming and expanding your customer base going forward.

When going over your business plan and business model, get clear on your business's strengths and weaknesses. Then, look at what was working before that may not work as well now and see where you can adjust or improve to remain competitive. Finally, don't forget to revisit your business goals to make sure they're realistic, given the current circumstances. For example, you may have set a target revenue goal for the year that will need to be scaled back now to account for the damper COVID-19 may have put on your Q2 sales.

3. Consider Whether You'll Need Funding to Recover

Unless you had a large amount of cash on hand going into the pandemic, it's likely that you may need some working capital to jump-start your business operations coming out of it.

When it comes to financing your small business during a COVID-19 rebuilding period, there are several options to consider. The SBA is an obvious choice for business loans, and there are a few programs that can help. The Paycheck Protection Program, for example, is designed to provide funding to small businesses that are struggling to retain their employees during the coronavirus pandemic. Economic Injury Disaster Loans also can help with short-term financing if you need money for things other than employee retention. 

The challenge with both of those federally mandated programs, however, is that the funding is limited. It's entirely possible that funding may be depleted before your application for a loan is ever reviewed. For this reason, it's important to consider other sources of small business funding, including:

  • Traditional SBA 7(a) loans and microloans
  • Small business term loans from banks, credit unions and online lenders
  • Business lines of credit
  • Business credit cards
  • Vendor tradelines
  • Accounts receivable financing
  • Merchant cash advances
  • Inventory financing
  • Purchase order financing
  • Equipment financing

Each option can have pros and cons. Accounts receivable financing and merchant cash advance financing, for example, can be convenient, and neither one requires perfect credit to qualify. Either could be useful for funding your business in the short term.

But they both require that you have something to leverage, i.e., outstanding invoices and credit card sales, respectively. If sales are slow or nonexistent, you might have a hard time getting approved. Alternative financing options like these also can have much higher effective annual percentage rates compared to other types of small-business loans and lines of credit.

If you're considering financing to help rebuild, keep in mind that borrowing may be competitive, as lenders want some reassurance that loans can be repaid. Reviewing your business and personal credit scores, as well as your business and personal financials can help you gauge how likely you are to get approved for funding.

4. Revamp Your Budget to Account for New Spending

Coming out of the COVID-19 pandemic, you may have to spend money before you can make money.

For example, you may need to spend money on hiring and training new employees or rehiring ones you had to lay off. Inventory may need to be purchased, and you might have to rev up your advertising budget again to start building fresh buzz.

As part of your coronavirus recovery, you should have a clear idea of what you need to be budgeting for and what you can cut to make the most of the revenue you do have coming in. The goal is to eliminate the monetary waste and get your operating budget as lean as possible so that when the chance to invest in growth comes up, you're able to take advantage of it.

An extreme step you could take during this time is deferring paying yourself a salary or taking a pay cut. Whether this makes sense depends on how well you're able to manage your personal financial obligations, depending on what you have in savings or from a spouse's income if you're married. But skipping out on paychecks in the near term could help your business to get back on its feet faster.

5. Develop a Time Line for Rebuilding

You may have several things you need or want to do to recover following COVID-19, but doing everything at once may not be realistic. What can help is having a time line to follow that prioritizes your most important actions first.

For example, your immediate goal may be securing funding for your business. Once you've done that, you can set a time line for rehiring employees, then restocking inventory and, finally, reopening your doors if your small business closed as a result of the pandemic.

As you take individual steps toward recovery, remember to track your progress. This is particularly important if you've secured capital to fund your business, because you don't want to waste time on activities that aren't delivering a solid return on your investment. In the initial stages of COVID-19 recovery, you may want to check in weekly to see what's working and what's not. Later, you can shift to reviewing your business financials monthly as things begin to stabilize.

6. Create a Contingency Plan for the Next Crisis

While the coronavirus pandemic may seem like a once-in-a-lifetime event, the reality is that an emergency can come along to disrupt your small business at any time. Using what you've learned during the current pandemic to prepare for the next crisis can help you insulate your business from future shocks.

For instance, building up liquid cash savings may be a priority for your business if you had little or nothing set aside before the COVID-19 outbreak began. You may choose to focus on paying down your debt and trimming nonessential spending to keep your budget in check. Or you may need to find ways to help your staff work more efficiently to cut operating costs.

The pandemic also may have taught you a thing or two about how important it is to be able to adapt and keep your business fluid so you can reasonably weather storms. For example, if your employees didn't have the option to work remotely before, that's something you may want to incorporate in your business model going forward.

The more outside-the-box thinking you can do to prepare for a worst-case scenario, the better. Having a Plan B (and even a Plan C, D, E and F) can help improve your business's odds of surviving—and eventually thriving again—during tough financial times.

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Startup Opportunities Coming Out Of The Pandemic—Some Are Opportunistic, Others Will Be Here For A Long Time - Forbes

Posted: 09 Apr 2020 08:49 AM PDT

As this pandemic continues to impact almost every part of our lives, there are going to be major opportunities for existing brands and new startup companies that will leverage either an opportunistic or a longer-term opportunity. Here is my take on both.

Opportunistic

Cleaning Services. As COVID-19 cases continue to rise throughout the U.S., so is the nationwide demand for janitorial services. A number of cleaning companies have seen an increase in requests for additional services as people are being reminded to constantly clean and disinfect all commonly-used areas, offices and facilities to prevent the coronavirus from spreading. Once this pandemic is over, there will be a high demand for continuous cleaning at a new cleaning level.

Medical Light. Once the pandemic has been reduced, one of the conditions for businesses to re-open will be to conduct regular employee screenings before an employee enters a business workplace. The Equal Employment Opportunity Commission (EEOC) gave employers the green light to take employees' temperatures to try and ward off the spread of the coronavirus in guidance updated March 18, 2020. So, who will provide this service? New companies will pop up to provide employee screenings as they enter the building.

Stylish Protection. Face masks have become an increasingly common sight on the streets of cities around the world in recent weeks. Though wearing them has long been the norm in Asian capitals like Tokyo and Hanoi, the mounting threat from the novel coronavirus is convincing more and more people around the globe to wear masks whenever they go outside. And not just any mask, but masks with style. Look for an explosion of "stylish" face masks over the next 12 months. Also big brands will want branded masks for their employees.

Starting a Company. Business interruptions are often the precursor to disruption and opportunity and layoffs are mounting. Really good people will second-guess what they are doing or will have the decision made for them. Some will view this as a great time to switch careers, while others will think about starting their own business. In general, startups launched during a downturn tend to be far more durable and resilient than those started in a better economic time. Look around for problems not being solved well and try to come up with a solution that could be a great company.

Longer Term

Delivery Services. While delivery services have been trying to get their toe-hold for the past several years, the leaders will now grab market-share and trial with new customers, some of whom who will continue the service long after the pandemic is over. Other startups will focus on niches delivering what never used to be delivered.

Remote Applications. For all the professors in university education, welcome to the new normal of working with remote applications. While education may never really change, businesses have now learned how to utilize remote working tools and applications that are providing value while cutting overhead costs. Look for remote working applications and solutions to rise.

Remote Fitness. As the coronavirus continues to spread, fitness studios around the country are shutting their doors and adjusting to a new reality. Even SoulCycle is adjusting by offering its cycling studio bikes which are now available for pre-order with a price tag of $2,500, with the company saying it will release on-demand virtual classes later this year. The whole notion of a "virtual" trainer will now explode into other exercise modalities as well.

Cyber Security. When you work remotely, all of sudden standard applications will come under cyber hacking attacks. Just ask Zoom. Building better versions of either application or browser based secure solutions will gain new levels of funding from investors.

E-commerce. This pandemic, while a potential death blow to physical retail stores, will accelerate e-commerce to even higher levels. Chewy, the online pet store, has seen an explosion of orders in recent months. E-commerce will never look back and even more niche e-commerce opportunities will surface.

Entertainment. Is this the final act of the movie theaters? Will major sports brands like NFL, MLB, NBA, NHL finally accelerate virtual reality programming? Gaming has accelerated in this crisis, Netflix and others have seen a tremendous rise in viewership. Investors will be backing next generation companies that can bring entertainment to the masses on a one to one basis.

If you look back over other recessions or downturns in our economy, great companies have been born in this time. This pandemic will also spawn some amazing startups and a host of new products and services.

Mark Cuban says a lottery system is the only fair way to grant small business coronavirus loans - CNBC

Posted: 01 May 2020 07:32 AM PDT

Small businesses should apply to multiple banks in order to boost their chances of receiving a loan through the Paycheck Protection Program, "Shark Tank" investor Mark Cuban told CNBC on Friday.

"If you're a small business and you happen to bank at a big bank, it's OK to go find a small community bank and apply there as well," the billionaire entrepreneur said on "Squawk Box." "There's no rules against having multiple applications. You just can't take multiple loans."

He also said the only fair way to operate the Paycheck Protection Program, or PPP, is through a lottery.

Cuban previously been critical of the roll out of the PPP, warning that some banks were leaving small businesses "out in the cold."

Banks of all sizes have said the government's loan-entry portal has caused delays in dispersing loans through the program. Some banks have said they will prioritize PPP applications from existing customers. 

The program, established in March as part of the government's $2.2 trillion coronavirus aid package, has seen overwhelming demand and many small businesses have said they've been unable to receive funds. The initial $349 billion allocated for the program was used up, but Congress has since approved an extra $310 billion.

Cuban, who owns parts of many small businesses through "Shark Tank," suggested on Friday that all applications go into a repository at the Treasury Department, which would randomly select a certain quantity of loans to approve. "They see what the total is, and however much money left they have, they go to the next 50,000 until the money is gone," he added. "That's the only way to be objective and fair." 

Always-outspoken Cuban has been particularly vocal during the coronavirus crisis, arguing that workers must be a priority in government relief efforts.

Cuban, also owner of the NBA's Dallas Mavericks, is a member of President Donald Trump's advisory council on how to help the U.S. economy recover from the pandemic-related shutdowns. 

— Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," on which Mark Cuban is a co-host. 

Small business success strategies coronavirus - Fast Company

Posted: 12 Apr 2020 02:41 AM PDT

We can all agree that social distancing is necessary for the health of our communities, but it's been catastrophic for many small businesses that rely on in-person activities to thrive. From restaurants to gift shops to cleaning services, businesses have had to completely upend their normal strategies to figure out how to survive.

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We've researched and spoken to a variety of small businesses around the world to find out what they're doing to get through this uncharted territory. The main takeaway from all of them: flexibility. Things are not business as usual, and everyone is getting creative to make things work. Here are a few strategies that resourceful small businesses are trying during social distancing.

Expand your market

In some cases, your existing clientele just won't be able to make use of your products or services. For example, Cleaning service Aman for Home services had to find new clients because their regular customers understandably didn't want people coming into their homes.

Instead, they told us, they began offering sterilization and disinfection services for entrances of buildings that were still in use. The demand isn't as high as normal, but it allows them to continue operating during this unprecedented period.

Similarly, many local distilleries have shifted to making hand sanitizer. Some, like Litchfield Distillery in Connecticut, are giving it away for free, which serves as a great marketing strategy to increase loyalty down the road. Others, like Tamworth Distilling in New Hampshire, are selling sanitizer in order to keep their business operating during the crisis. It's going so well that they're actually selling out.

Consider new ways to deliver your product or service

Many dine-in restaurants and bars are offering online ordering and curbside pickup. But other brick-and-mortar businesses need something more personal.

When your business model involves people coming in to browse or interact with you, you need to figure out how to make that happen virtually. La De Da! gift shop in suburban Chicago is all about offering personalized recommendations for gifts. People don't come in knowing what they want—they browse, and they rely on the owner, Jill Carlisle, to point them in the right direction.

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With social distancing in full swing, Jill now has customers complete a Google Form, mimicking the kinds of questions she'd ask when a customer walks in or calls her. From there, she can work with the customer virtually to find the perfect gift.

Necker's Toyland, a toy store in Simsbury, Connecticut, that's been in business since 1948, also had to get creative. They're offering a FaceTime browsing option, virtually walking kids around the store, so they can pick out something that'll keep them busy during quarantine. Then they're offering curbside pickup or delivery to nearby towns.

Service-oriented businesses are doing something similar. McAlister Training in San Luis Obispo, California, like many fitness studios, has taken its classes virtual. They've also taken the opportunity to expand their market, offering classes for kids who are at home with some energy to burn. And the Winchester Mystery House in San Jose, California, is offering online tours of the historic—and strange—landmark.

By offering your services online, you retain existing customers during social distancing, while also potentially opening your market to people outside of your geographic area.

Partner with other businesses

Some struggling businesses, like Metro Bis restaurant in suburban Connecticut, are partnering with other, less-affected businesses. Metro Bis has been selling prepared meals at a local grocery store to make up for the lack of business in-house. This partnership gives them a way to safely serve their customers.

At the same time, some struggling businesses are teaming up with each other. City Home, a home decor and design business out of Portland, Oregon, has partnered with a local florist to offer an incentive to customers.

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Three City Home customers will receive a surprise bouquet from local florist Old Town Florist with their delivery. For City Home, the promotion serves as an incentive to purchase. But Old Town Florist benefits, too: it's a new marketing channel, targeting customers who have a vested interest in home decor and would be likely to purchase flowers to brighten a room.

Stay connected with your customers

Your customers may not be buying from you right now, but you'll need them more than ever once things settle down and they can come back to you in person. That's why it's so important to stay connected through virtual channels. Here are a few ways to make that happen.

1. Send an email
Email your customers to let them know how they can get your product or service during this time. Are you doing curbside pickup? Offering virtual consults?

2. Update your website
Of course, an email will only reach the people whose contact info you have. For everyone else, you need to update your website.

Folks who come to your website need to know what you are—or aren't—offering. If you're still operating in some way, make that clear front and center on your homepage, so you don't miss out on potential business. If you're completely out of commission, let people know why: by showing that you're prioritizing the safety of your employees and community, people might be more likely to support you when things settle down.

Don't have a website? Create a Facebook page to get some visibility and give people insight into what you're up to.

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3. Ask for ideas
No one knows better what your customers want than your customers themselves. Everyone is dealing with social distancing differently, so it can benefit you to just ask—what do folks want from your business right now?

Liz Morrow, a creative interior designer out of Tacoma, Washington, took to Instagram to ask people what they'd like her help with.

Letting your customers guide your crisis strategy ensures that you're providing products and services people want. Plus, it allows you to continue to market and connect with your customers even when they're not coming into your store.

Invest now in your business's future

While business is slow, you can use the time to figure out what you can streamline for when your business is back in action.

For starters, identify what processes you can automate. If you're not sure where to start, there are a few kinds of tasks that are ripe for automation:

  • Tasks you have to do frequently or on a schedule
  • Tasks that involve moving information between apps
  • Boring tasks that don't require higher-order thinking
  • Tasks that take you away from what you really want to be doing
  • Automating your processes will help you now if you're short-staffed, but it'll also pay dividends in the long run.

George Kontos, cofounder and CEO of Marshmallow Streaming, found a bottleneck in his business when managing customers across multiple applications including Salesforce, QuickBooks, and Google Drive. He decided to use the slow period to automate some of those tasks.

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By investing in this effort during this slowdown period, we have positioned ourselves to be more successful and efficient when business picks back up.

Another way to invest now for future gains is through your content marketing. Creating high quality content is something you can do by yourself, on your own schedule. You can send it to your email list and post it on social, keeping your customers engaged during social distancing. But it will also serve you in the long run, especially if you keep SEO in mind.

Corrie Beth Hogg, an author and master maker, got creative with her content marketing. She created a free coloring page that people could print out and color during quarantine.

Because folks are spending more time online during social distancing, now is a great time to offer this kind of content: it's a marketing channel for you and a benefit to your fans and potential customers.

This is an unprecedented time for small businesses, and there's no one-size-fits-all solution. Try some of the strategies above, and don't forget that there are small business relief programs available, including SBA loans and other funds.


This article originally appeared in Zapier and is reprinted with permission.

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