As the pandemic hit and, in the months after, certain terms have popped up in the news with growing frequency — Supply Chain Disruption, Worker Shortage, Inflation, Social Distancing, Remote Work, and Cybersecurity, to name a few. As a business owner, you’re always trying to predict trends in order to prepare for or get ahead of the market. Understanding these six trends will help you stay ahead of the curve!
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Crises have a knack for exposing existing problems in businesses. Before the work can begin on fixing those problems, you first need to evaluate where your business currently falls and what you can do to progress through the stages. The ultimate goal for business owners is to obtain more customers, drive more revenue, and have more freedom.
The current reality for your business may fall into one of three categories:
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The spread of the novel coronavirus has disrupted the lives of billions and had an enormous impact on small businesses nationwide. Businesses have been forced to close their doors, lay off staff, transition to remote work, switch to online sales, and so much more.
In the last six months of the new normal of COVID-19, business owners have showcased agility, developing strategies to help their businesses survive in the new landscape. We discussed survival strategies with SBTDC clients in a recent meeting.
Below is a summary some of the strategies that have worked for them during the pandemic:
Business owners will need to come up with creative solutions to help their business survive the next phase of the pandemic. It may seem like a daunting task, but you are not alone. The SBTDC has a talented team of counselors, market researchers, and specialists that can help you come up with strategies to help your business adapt to the changing landscape.
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Things small business owners should consider and do right now so you’ll be better prepared to survive through the COVID-19 pandemic. These, incidentally, are smart preparations to undertake at any time, so you’re not wasting the effort.
1. Look at your financials and cash flow. How long can you “make it through” in case of a quarantine, lost wages, employee absenteeism (when you are paying for sick leave AND not bringing in revenue). What do you need to bridge the gap? Plan on a 6-8 month drop in revenues. Map out cash flow now. Get a credit line approved now. You don’t have to use it. But you’ll have it when you need it. Aggressively pursue accounts receivables.
2. Slash your overhead. If you’re worried about losing customers or employees due to sickness, school closures or possible quarantines, cut the things you don’t HAVE to spend your money on.
3. Communicate, Communicate, Communicate and Get Online! Keep staff and customers informed and up-to-date on your operations. It’s important for businesses to keep in touch with customers to help maintain them through this incident. Let them know what steps you are taking to ensure a safe and clean establishment; what your open hours are and how to communicate with you; use email auto-reply with answers to frequently asked questions to help your customers get information quickly; offer alternative methods of good deliveries (curbside service, at home delivery, drive thru, etc.). Use online platforms, like Facebook and your website, to inform customers of your operating status and how to purchase your products or services. Communicate this information through direct email to customers and through social media such as Twitter. Make sure you have a Business Profile on Google. Postal mail might be a way for your message to get customers’ attention who are being bombarded with emails.
4. Understand your insurance policy. What does your insurance cover? What doesn’t it cover? Business interruption insurance is insurance coverage that replaces business income lost in a disaster. Business interruption insurance is not sold as a separate policy but is either added to a property/casualty policy or included in a comprehensive package policy as an add-on or rider. If you don’t have business 1 interruption insurance, it may be too late to help you in this emergency, but you should know what it is, how it works, and how much it costs. A government mandated closure (hospitality businesses, for example) most likely will enable business interruption insurance to kick in.
5. Look at your supply chain. Are they diversified or are you relying on one source for your products? Supply chain management is essential in any global pandemic. Travel, workforce absenteeism, and financials will impact supply chains across the world. It’s important you have multiple providers of a resource that is the core of your business. Consider partnering with other businesses to share a vendor contract. That will make your order larger and a higher priority to the provider and may help to reduce the costs of goods.
6. Develop an incident response plan. What do you have in place in case of a quarantine? Can your employees work from home? Can you sell online or deliver instead of staffing brick and mortar? What kind of technology can be implemented to reach your customers? What communication is in place to your customers and employees? Identify essential functions and cross-train employees now so several can perform those tasks. Consider what programs or services could temporarily be shut down. Think about potential disruptions in supplies, services and transportation in the likelihood those organizations experience employee absenteeism. Identify alternative vendors / suppliers / etc. and how to reach them. Store information on your employees, vendors, and clients in an online account so it’s accessible from any device.
7. Prepare for a disaster loan. Complete and assemble 2019 and prior year financial statements. Start documenting and forecasting the impacts of the situation. In the past, SBA disaster loans have required many forms, can be confusing, and could take 3-6 weeks before receiving the money. Additional details on SBA Economic Injury Disaster Loans.
8. Practice Social Distancing! Social distancing is a term applied certain action to stop or slow down the spread of a highly contagious disease. Here’s some action items you can implement quickly in your business:
Many business owners are wondering what they can do (outside of taking on additional debt) to help meet the challenges of COVID-19. The Guide to Conquering a Business Crisis provides suggestions for cash management, pricing and cost containment, supply chain management, and marketing.
We are constantly receiving information on how to manage staying at home, exercise, family time, keep a schedule, and practice social distancing. But how do you “quarantine” your business? This publication provides information on evaluating what you can’t and can control, questions to help you analyze your business and move forward, and how to get help.
The importance of financial management cannot be over emphasized, especially when business conditions become difficult. The Checklist for Managing in Times of Financial Difficulty provides ideas for improving the cash position of your business, controlling costs, managing inventory, and increasing sales.