The COVID-19 pandemic is changing the operations of businesses everywhere. Small businesses, in particular, now have the challenge of figuring out how to survive with the few months of cash flow they had before the pandemic hit and society shut down. Not every small business will survive, but there are steps you can take to make sure your business is one of them. Let’s take a look at some helpful tips small businesses can use to financially survive this global health crisis.
Use Resources From the Government and Financial Institutions
Governments know that small businesses will be the most affected by the COVID-19 pandemic, so governing bodies around the world have put together initiatives to help support small business owners and their employees. Even if you heard about initiatives earlier on in the crisis, it is worthwhile to check in on those initiatives again. Like everything with this pandemic, the situation is evolving on a daily basis and what was true one week may change the next. Stay up to date with how your government is helping cut costs. You can check for programs from other important institutions, such as banks or specific organizations for your market.
If your business is still open and you need to provide your employees with personal protective equipment such as facemasks and gloves, see if there are any initiatives in your community that can help you get those supplies. Prioritize the most important equipment for your industry. For instance, if you run a medical clinic, you would know that surgical and medical instruments such as syringes, surgical clamps, and stethoscopes account for about 40% of the industry revenue. Either re-work your budget so that you know you can still obtain these important instruments or seek financial help to be able to afford them.
Create a Three-Month Financial Plan
Now that you know what kind of financial help you can get, you can effectively make a financial plan for your business. Speak to anyone you need to pay in the next few months, such as your landlord and various suppliers. They may have options for you to spread out the costs. You can also consider utilizing a zero-based budget, which means that you assign every penny you have coming in each month to a specific purpose. What you have coming in will exactly equal what you have going out, leaving no room for guessing in your budget and helping you avoid unnecessary spending.
The next step is to find all of the ways you can cut costs, no matter how big or small. Your biggest costs are likely your staff and office rent, so you could freeze hiring full-time employees and consider downsizing your office. You should also look at your personal finances and find ways to cut costs there. Alternatively, if you are in a comfortable place with your personal finances and want to use some of it for your business, you could make a big investment that pays off in the long-run. This kind of investment would be akin to when a police department invests in body cameras. They have a large upfront cost, but police who are equipped with body cameras receive 93% fewer complaints from the public, which is a significant long-term benefit. Think of investments you could make now for your business that will give you profits in the long-run and help you recover from the COVID-19 crisis.
Find New Opportunities
Sometimes the best ideas come to you in times of hardship. If you don’t think that your business model can survive the COVID-19 pandemic as it is currently structured, think of ways you can change it up. Consider how your customers might behave moving forward and if you might have a new type of customer in a post-COVID-19 world. If you’re a clothing brand, for instance, you can start making non-medical grade masks that you sell and/or donate. Wearing a face covering in public is likely going to be the new norm, giving you a much broader customer base.
Think of ways you can start working with other small businesses who might be struggling so that you can make it through the crisis together. For instance, a restaurant that is struggling to keep up with the costs of transporting their food could invest in using a reefer trailer with another restaurant close by. There are about 500,000 reefer trailers currently in operation in the United States, but there’s nothing saying that you can’t share one with another business to split costs and better preserve your product. Innovative partnerships like this can help keep your business going during the pandemic and it could start a partnership you would have never discovered otherwise.
As you’re finding ways to make it through this pandemic, remember that your top priority should be to keep yourself and your employees safe and healthy. Utilize tips from the CDC to ensure that everyone stays healthy and can return to work once the crisis eases up. Together, you can make it through to the other side of these uncertain times.
