The coronavirus, more specifically COVID-19, presents challenges on many fronts—the most critical of which entails ensuring public health while at the same time putting measures in place that prevent the economy from completely tanking. It’s an unprecedented challenge that’s affecting industries and sectors around the globe, but it’s taking a particularly heavy toll on small businesses, which account for roughly 50% of the U.S. workforce.
So, how can these 30 million-some-odd small businesses—including specialty flooring retail—put themselves in the best position to not only survive but thrive when we finally turn the page on this pandemic? Mark Kohler, author, attorney and CPA, offered these critical 10 “business survival steps” in a special feature published in Entrepreneur magazine:
- Immediate financial triage
Here are some important steps to take on the financial front as soon as possible:
Create a cash-flow budget listing with fixed versus variable costs. Fixed costs will generally keep the doors open and must be paid. Create a list of priorities and try to set money aside based on the timing of when they are due.
Analyze cuts to unnecessary costs that aren’t producing revenue or securing key business functions.
Move carefully. With respect to layoffs, terminations or furloughs of employees—remember, your employees can be one of your greatest assets. If you cut too deep, you might not get them back.
2. Tax payments
Taxpayers have an unprecedented tax payment extension from the Fed for 90 days, until July 15. This is to individuals and small business owners of up to $1 million in taxes owed and up to $10 million for C-corporations.
However, taxpayers still need to file their taxes or apply for extensions by April 15. There are penalties if you don’t file, but again, no penalties or interest if you don’t pay (for up to 90 days).
Taxpayers might also be able to find some extra money by filing their taxes, because there’s a good chance they could have a refund. Note: In 2015, it was reported that over $1.4 billion in tax refunds went unclaimed and were kept by the treasury department.
Important note: Don’t fall victim to thinking you can wait to pay payroll taxes. If you are an employer, those payroll taxes are considered sacred funds by the government. Payment of these taxes is not extended, and penalties and interest are significant for not paying payroll taxes.
3. SBA Disaster Assistance Loan
The Federal government through the Small Business Administration has authorized loans to small business owners of up to $2 million. These are meant to be used for business debt, covering payroll, costs to operate the business, etc. The terms can be up to 30 years to repay and a low 3.75% rate.
On the face of it, this may seem like a safe or logical choice. However, remember this is still a loan that has to be paid back. If your business is already barely getting by, it may not be the time to go into more debt.
For more information on SBA loans, click here.
4. Establish COVID-19 policies within your organization
Be clear with your employees regarding your specific policies within the business and safety protocol regarding the virus. It’s probably wise to follow as closely as possible the CDC guidelines, social distancing, clean work areas, environments and good hygiene. Cancel large events and use conference calls and webcams to communicate when possible. Be flexible on sick leave that employees want to take.
5. Be honest with your employees
It’s not all about cutting costs with payroll. It’s also important for business owners to show leadership. Set the tone and be the calm in the storm.
Don’t plan too far out; things are changing often. Make a plan for the next few weeks, then the next month, etc. These plans will change, but here are a few specific ideas or steps to consider with your team:
If you have employees, make sure they are assured about being protected. You want to retain the key people who drive your business. In the end, it’s people who make every business successful so focus on your key people.
Don’t get stuck in decisions you made last week. Be willing to adapt and have new plans. You are going to have to live with these changes once the crisis is over.
6. Maintain sales/marketing efforts
Make sure to communicate clearly and consistently with your customers. If you are open for business, make sure they know that and how to interact with your organization. Make it easy for them to purchase your product and services. *Be creative and find new opportunities to market and sell. Given the current conditions, what resonates with customers right now that you can provide? Offer discounts if necessary and think outside the box*
Use your social media presence to keep your customers up to date. If you typically don’t use social media, it may now be the time to start.
Implement a newsletter or series of emails to your customers if you aren’t already doing so. Use it to communicate your ability to help customers and any changes to how you regularly provide them.
7. Revisit unfinished projects
If things are slow, this is an ideal time to tackle those projects you have been putting off. Invest in this time—don’t waste it on Netflix or getting sucked into the never-ending news coverage. Instead, consider this time for you or your team to be invested in improving products, services and finding efficiencies. We know we all have them in our business, and we’ve been too busy to get to them. Come out of the storm stronger and have a better product or service.
Conduct training in your company or get training yourself as a leader in areas you know will improve your company. If you know you are weak on social media marketing or accounting and budgeting, IT or a niche thing in your business category that could drive your business, invest your time into this. Get your team doing the same.
8. Facilitate work-from-home systems
Many small businesses are having employees work remotely for the first time. Make sure you set the expectations for those working remotely. Implement a work-from-home agreement in writing with your employees and have them sign it. Set-forth expectations and implement a procedure for a weekly productivity report.
Increase your level of technology, if necessary, as quickly and as affordably as possible. If you are on a server, you will need to set up VPN accesses for employees to access their work computers from their home computers. If you are on the cloud, this is much easier (Gmail/Google, Outlook 365, Salesforce, most modern CRMS, etc.).
Assess what functions can be done remotely and what must be completed in the office. A small team may need to be on-location for certain functions (mail, packages, shipping, etc.). Try to have a measured approach and get as many people as possible to work remotely.
For more on a successful work-from-home strategy, click here.
9. Access strategic 2020 plan
If you didn’t make a strategic plan for this year, it’s certainly time to make one now. This is also a great time to make modifications. Start on projects that have been on your wish list and revaluate your objectives for the year. Adjust the plan and outlook for 2020 as you know more about your business.
10. Learn from your mistakes
We are all learning a lot about how we could have better prepared for this disaster. Use this time as a wake-up call and learn from this experience. Start taking notes and don’t return to the status quo when this is all over. That includes:
- Having a financial reserve or savings account for your business that could help in times of need or disaster.
- Having a personal financial reserve of a few months of living costs.
- Building a small food storage at the least. Maybe a few months’ worth of household goods, such as toilet paper, soap, feminine products, laundry soap, etc. Do your best with the resources and space you may have.
- Considering new revenue sources and small diversifying your business.
Finally, try to serve and help those in your community. The more you help others worse off than you, the better you’ll feel. We should do all we can to help one another through it while we all learn and grow from this trial.