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Updated: April 23rd, 2020
If there’s one group that’s proven it knows how to be there for one another during the COVID-19 crisis, it’s the small business community. Business owners across sectors of the economy may all have their own unique experience as it relates to COVID-19 and the consequential business crisis. Still, they seem to find unity in the fact that they’re in it together.
While some sectors of the economy are harder hit than others, you’ll be hard-pressed to find a business that has gone unaffected by the coronavirus outbreak. Many business owners who were deemed non-essential and required to close temporarily are on pins and needles waiting to hear when it’s safe to reopen as information from the healthcare industry continues to trickle in. In the interim, it’s not unusual to hear about how small business owners are supporting one another by providing tips on how to survive the COVID-19 pandemic.
We thought we would share some of their advice on how to handle a business crisis here.
There’s nothing like a forced shutdown to cause a business owner to reevaluate their priorities and, in some cases, change a business model. In response to this business crisis, restaurants have become take-out depots. Meanwhile, other brick-and-mortar stores like yoga studios are bringing their businesses online and relying on “virtual classes” using video platforms.
One business owner offers a bit of advice regarding crisis management that helped to save his business during the last financial crisis. As painful as it was, he made a list of every single expense, took out the red pen, and cut each cost that wasn’t vital to his business and that constrained cash flow.
This business owner was able to save $3,000 a month from computer/software costs, equipment maintenance, landscaping services, and even AC in the summer months. His tip is to do the same, and even once the doors reopen, to maintain the same mindset. This way, you have a lean, mean business that will survive the next business crisis.
The owner of an advertising business who survived the 2008 financial crisis similarly touts cost-cutting as a way to save your business during COVID-19. This business made a critical decision at the time to go virtual by bringing it completely online and shifting the staff to work remotely. This approach to how to handle a business crisis might not work for every type of business. But, it’s this out-of-the-box thinking that could keep your business relevant throughout the crisis.
Speaking of which, Shark Tank investor Mark Cuban has been fielding questions from small business owners throughout this pandemic. He advised them to use the opportunity to learn more about technology. His emphasis was particularly on artificial intelligence (AI), considering Big Tech is pouring billions of dollars into this space. He expects that when the economy reopens, AI is going to play a vital role in further crisis management and determining the way things are done.
If you happen to be someone who is planning to launch a business during this period, now is not the time to be seeking venture capital funding, according to Fellow Shark Tank investor Robert Herjavec. Instead, focus on building the operations and infrastructure of your company so that down the line, you won’t have to sacrifice more equity than you otherwise would. The most important things to focus on now are surviving COVID-19 and — if possible — growing your business.
If ever there was a time to document everything, the time is now, according to one restaurant owner who shared his experiences with crisis management on social media. This means recording every expense, phone call, and canceled order. Chances are you’ll be seeking some business help as a result of COVID-19, whether it’s an SBA-backed loan or insurance relief. Keeping good records now could make or break your ability to receive assistance in a business crisis.
Also, write down your internet passwords for various sites and try not to use the same one twice. There are reports of some bad actors trying to capitalize on the situation by stealing personal details online.
This business owner also advises his peers to remain transparent with customers. Now is not the time to pretend like you’re immune to the economic challenges wrought by this business crisis. Share some of your experiences on your website. And, offer your customers the opportunity to support your business by purchasing gift cards or other products and services online.
One area where business owners are struggling is with gaining access to the quick capital they were expecting by the banks. While the government’s intention was for banks to relax some of their credit standards for loans to get the Treasury-backed funds into the hands of business owners quickly, borrowers are experiencing problems as a result of too much red tape.
Another piece of advice is not to give up. Keep knocking on the door of lenders until you’re approved. Keep in mind that banks – whether big financial institutions or regional banks – aren’t your only options as you consider how to handle this business crisis. Some fintech companies like Funding Circle are also approved to issue these loans that are fully backed by the SBA.
You might also find that morale among your team members has taken a blow as a result of the coronavirus business crisis. People are unsure of whether they will have a job when this is over. And, business owners are facing uncertainties of their own, such as how to avoid insolvency.
One business owner described how the staff had bolstered communication throughout the pandemic, raising the frequency of meetings from weekly to daily, even if it’s just via a text message or phone call. Even though, as a business owner, you might be taking it day by day, it’s essential to communicate with your staff so that they don’t feel misled if this business crisis goes from bad to worse.
And if you haven’t done so already, you can explore your options for government-backed emergency financing from online lenders like Funding Circle during this stressful time. Find the application for a CARES Act Paycheck Protection Program loan here. You can also check how much you can qualify for using our CARES Act SBA Loan Calculator before you apply. There’s no shame in pursuing a loan; you’re a taxpayer, and you’ve earned it.
Jessica Holcomb is the Content Marketing Manager at Funding Circle, specializing in small business marketing and social media. She has a degree from the Fashion Institute of Design and Merchandising. Prior to Funding Circle, Jessica was a Marketing Manager at a successful social games company and a freelancer for many small businesses in the Bay Area. Her work can be seen in top retail, gaming, and financial small business resource sites.