We are scared too. Just like you, we are small business owners living in unprecedented times of great uncertainty. We just purchased the real estate to open our second office last month and we invested our personal funds to further expand our business. Now we have two locations requiring monthly expenses, and we have no idea what our income will look like over the coming months.
Most small businesses are all in the same boat right now, and we are right there with you. We are all bobbing around in uncharted waters with no wind to fill our sails, and the only thing we can do is try to keep moving forward in any way we can. So do we row? Do we get out and swim? Do we try to get sea creatures to pull us to shore? The key is being open to any ideas that will keep our businesses afloat.
Based on our years of business experience, we’ve put together some practical advice to help our fellow business owners through this difficult time. Not all of these techniques will work for every business and every situation, but hopefully you will be able to apply at least one of these ideas to help you through this pandemic crisis.
There is nothing more certain in life than change. Change is the only constant that you can count on as a business owner. The businesses and the entrepreneurs that are flexible enough to adapt when times or circumstances change, those are the ones who survive. For example, our business heavily relies on building relationships and face-to-face meetings with potential buyers and sellers, as well as holding meetings between buyers and sellers. During these times of ‘social distancing’ we’ve had to change the way we conduct business. We are leveraging the technology tools we have and scheduling conference calls, or FaceTime/Zoom/Skype meetings. We are seeing lots of businesses adapt to these changing times, by selling their products online rather than at their retail shops, offering take-out and delivery instead of dine-in, or making video tutorials or online instruction. Thinking of different ways that you can conduct business will help keep you alive, and especially leveraging digital technology will make all the difference.
If there is no option for you to change the way you do business, then maybe you might be able to change your business’s focus. For example, the businesses and services that are thriving and are staying open have increased their cleaning and sanitization. We’ve been reading about commercial cleaning companies being in high demand, due to all of the extra cleaning measures these businesses are taking at the moment. If residential cleaning companies were able to shift their focus over to capitalize on this commercial need of the moment, then they might be able to ensure the future of their business. Look for the opportunities that are out there during this crazy time and see if your business can bend toward a current problem that needs solving.
If there are no opportunities to change the way you do business, and you don’t see any possibilities to change your business’s focus, then try to volunteer and support your community through your business, if that is in any way possible.
Let Your Customers/Clients Know How They Can Support You
By being told to stay home and distance ourselves from others, it is easy to understand how many people are feeling helpless at the moment. Nobody wants our economy to suffer, nobody wants to go bankrupt, and nobody wants to see businesses fail. So, appeal to everyone who is a customer or client, to all of your fans, to everyone who has worked with your business in the past and ask them to help you during this time. If they can still do business with you, for example if you are a restaurant that is still offering take out/delivery, offer them a special to order with you. If they normally shop in your store and you are doing online sales too, send them a reminder that you are still open for online shopping. Run a sale or offer a friends and family discount. Do anything you are able to do to keep income coming in.
If they can’t do business with you at the moment, there are other ways they can support your business, like buying gift cards or booking future appointments.
Maybe your loyal customers are tightening their wallets, because they might now be out of work, but there are easy and free things that they can do to help your business, like filming a video testimonial for you or writing an online review for you. Those are great things to ask of your current and past customers, as many of them are stuck at home right now with nothing better to do. Don’t be afraid to reach out at this time and ask for support, as you have a captive audience and people are looking for ways that they can support their communities during this crisis.
Keep Your Team/Employees Motivated
Unlike large corporations, most small businesses don’t have big reserves in the bank to pay their employees if the business has to shut down temporarily. So, in order for a small business to keep their workers employed, they need to stay functioning and keep working as much as possible during this time. That’s certainly been our message to our employees. In order for our business to survive this, we have to keep going, and we need the help of our employees to do that. Keeping them motivated and busy during a time like this can be challenging, especially if the job they were doing has been temporarily suspended.
Are there other jobs the employee can do? Inventory, marketing, and making sales calls are all activities that can go by the wayside if a business is too busy, so what needs doing that can be done by the people you’d like to keep on your payroll? Get creative and see how you can keep your people employed. You can also offer employee incentives to drive business, offer extra training, more education, or help them to develop new skills to use in their job once you get back up and running at full speed.
If your employees are working remotely for the time being, the number one thing to do is to stay connected to them and keep pushing their productivity. Communicate using Microsoft Teams or Zoom meetings. Keep face-to-face meetings happening, not just texts or phone calls. Human beings need real interactions, which will keep them connected to your business, and to the goals of the company. Use this time to do some 1 on 1 meetings with each of your employees to find out more about what motivates them, what they would like to see as incentives for reaching their goals, and to get any ideas they may have about moving the business forward during this time of uncertainty.
Better Your Business
When your business is busy and there aren’t enough hours in the day to do everything, many important but not urgent activities get pushed to the side. If your business has slowed down or has had to shut its doors temporarily, use this time wisely. Stay away from your sofa and turn off Netflix during the working hours of the day. Use this unexpected time out to make not only your business better, but to better yourself as the leader of that business. Invest in extra training or education. There is plenty of free stuff out there, especially right now. Read the top books on building your business up, being a better leader, or whatever it is that gets you motivated. My absolute favorite business guru and success coach is Darren Hardy. If you haven’t read his book The Compound Effect, now is a great time to do it. It’s an amazing book that has transformed my life and my business.
Take some time to document your businesses processes and procedures. Those are such a valuable thing to have when it comes time to selling your business or when you pass the reins onto your predecessor. This documentation process of all of the key roles and functions in the business is time-consuming and can be a daunting task to document every step you or your employees do to carry out each task, but once you have that library of written procedures, you are making your business much more valuable. It makes employee training much easier and it means someone will be able to step into any of the roles you have documented with ease.
You should also revisit your business plan during this time. Update projections and numbers based on your current situation and start brainstorming ideas on how you will be able to recover business that has been lost or how you plan to start back up again, once this threat has subsided. Make realistic goals for your business and outline your plan to achieve those goals. Don’t have a business plan? Now is the perfect time to develop one. There are many resources for business plans online, so just do a Google search to see which tools might be most useful for you in your industry or line of work. A business plan is the roadmap for where you want to take your business. Without one, how will you get to where you want to go? It’s not going to happen by chance, especially during these uncertain times, so rally the troops and draft a plan of action.
Cut Non-Essential Costs
If your outgoing expenses are surpassing your revenue, your business will not survive. It’s simple math and business 101, but right now, if business isn’t booming, you need to take a look at cutting some of your costs. As business owners and leaders, the burden always falls onto our shoulders to make the difficult decisions. You need to grab your QuickBooks file or schedule a meeting with your bookkeeper or CPA to discuss your current expenses.
I am very aware that cutting our costs as a business will have a domino effect on our local economy, and I wish that wasn’t so. If we can keep all of our vendors and employees on the books, then we will do everything in our power to do so. However, if we financially cannot afford to keep them on our payroll, then we need to be honest with ourselves and make the cuts where absolutely necessary. For example, we have a cleaner who has cleaned our office for years, and I would hate to have to tell her that we can’t afford her services at this time, but the reality is, if we don’t cut our non-essential costs and clean our offices ourselves for the time being, we might not have any offices to clean in the future. The same goes for our employees. While it would break our hearts to have to let someone go during this awful time, we have to do what is necessary to ensure the survival of our business.
So, go through your current expenses and prioritize them. What is non-essential to operation that can be cut immediately to help give you a buffer? What could be cut if money gets really tight? What are expenses that are last resort cuts? You need to know where you stand will all of your outgoings so that you can trim the fat now, to hopefully ensure your survival during the leaner times ahead.
Even though you might not need it yet, do some research today and figure out what your options are for financial assistance, should you need it. Do you have any personal or business credit that is open and available for use?
Look into the bridge loans that the government is currently offering. These are offered by the State of Florida and are short-term, interest-free working capital loans intended to "bridge the gap" between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance. https://floridadisasterloan.org/
The Small Business Administration (SBA) Economic Injury Disaster Loans are working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a result of the disaster. These fixed interest rate loans, with terms up to a maximum of 30 years, are intended to assist through the disaster recovery period. Applicants can apply online, receive additional disaster assistance information and download applications by clicking here. Here is a one-page fact sheet on these loans to help you better understand how they work and whether they're right for your business.
There are 2 loans, expanded by the Cares Act available NOW. We received this info from Christina Lael, JD, CPA of Lael Tax, LLC.
1. Paycheck Protection Program. Loans can be up to 2.5x the borrower's average monthly payroll costs of the previous year, not to exceed $10 million. The loan amount will be forgiven if used within 8 weeks for the following costs: payroll (including health care and money paid to independent contractors), mortgage or rent and utility payments. If done correctly, your entire loan amount can be transferred into a grant.
For more info about eligibility and loan details, CLICK HERE.
BOOKKEEPING TIP: Create new accounts in your General Ledger such as "PPP payroll," "PPP mortgage" and "PPP utilities" so that you can easily prove that these payments can be applied to the forgiveness amount. Be sure to use these accounts when you pay for the applicable expenses.
How do I apply? The Payroll Protection loans, which are backed by the SBA, are available from private lenders such as your local bank. Check with your local bank to determine when these funds will be available.
2. Economic Injury Disaster Loans (EIDLs): Receive $10K in 3 days!
EIDLs smaller than $200,000 can be approved without a personal guarantee. The expanded EIDL loan program also offers up to a $10,000 emergency cash advance that may not need to be paid back and which you can receive within 3 days of applying.
EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and principal and interest deferment for up to 4 years.
The $10K EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL.
This grant may be used to provide paid sick leave to employees, maintain payroll, or pay debts, rent and mortgage payments.
***Eligible grant recipients must have been in operation on January 31, 2020. The grant is available to small businesses, sole proprietors and independent contractors. I encourage everyone who is eligible and needs this grant to apply!
How do I apply? These loans are applied directly through the SBA. To use their expedited, incredibly easy and fast application process CLICK HERE.
A business that receives an EIDL between January 31, 2020, and June 30, 2020, is eligible to apply for a PPP loan, or the business may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the payroll protection plan.
Also, reach out to your landlord if you lease your business space. Don’t be afraid to ask about rent deferment or forgiveness. That just might be enough financial assistance to get you through this economic downturn.
We Are Here For You
We realize that times are tough already for most business owners and for most Americans, as we brace for and ride out this pandemic storm. We sincerely wish all of the business owners the very best and hope that we see you on the other side. As always, if there is anything we can do to help, please reach out to us. We are still here, working remotely, and we are happy to help in any way we can.