Worldwide Pandemic Leads Businesses to Accept a New Outlook
As restrictions have started to ease and business returns to some semblance of normal, organizations are left picking up the pieces of a disaster that almost none of them planned for. Let’s look at some of the statistics that explain where small businesses are at this time, and some tips on how to get your business back being the productive company you remember.
Effect of COVID-19
To start, let’s look at how COVID-19 affected small businesses. Nearly half (45%) of businesses were temporarily closed due to COVID-19. Those that have reopened have seen a nearly 40 percent decline in employment. Some parts of the country, including New York, California, Washington and some of the mid-Atlantic states have had over 55 percent of small businesses close during the pandemic. Additionally, over 30 million people have applied for state-run unemployment insurance.
Small businesses tend not to have the borrowing power or extra capital to endure situations where incoming revenue is limited or stymied completely. In fact, the average small business had less than two months of available capital to deal with disasters. Some businesses, especially ones with monthly expenses that come in over $10,000, didn’t have weeks of available capital on hand. Without the ability to get an influx of capital, some of these businesses were forced to suspend operations and cling tightly to the notion that they would be able to reopen after this situation had run its course. In fact, the businesses that are most strapped for cash closed their doors; and, with no timeline set for a vaccine, some businesses simply cut their losses and closed.
Lastly, over a third of businesses think that they won’t be able to open their businesses before the middle or end of August. Many businesses have already opened their doors with limitations, and some are already functioning as they typically would be. This suggests that there are no static answers to questions surrounding your business’ ability to do business, making it difficult for decision makers at these organizations to plan.
Tips for SMB Decision Makers
When all facts are considered, this situation is one that is extremely complex and evolves rapidly. Here are a few suggestions on how to approach the near future as a business owner or decision maker at a small business:
- Keep from being impulsive - As with any situation that changes as rapidly as this one has, the tendency is to react to news with impulsive action. It’s hard to deal with all the negativity (people dying, constant ideological arguments, recession looming) when your job requires you to stay positive. Our suggestion is to slow down and make plans without allowing the financial stress of this situation to overwhelm you into making rash decisions. Does your organization have a contingency plan? If not, this is your opportunity to create it. Diving headfirst into operation save-my-business will go a long way toward creating the environment to get your business back in action and on track as soon as it can. Additionally, you may come up with a new idea that you can use to build additional revenue streams in the future.
- Get the resources that are available to your business - This is an unprecedented situation and governments acknowledge that. That’s why literally trillions of dollars have been invested to help bail out businesses large and small in the way of grants and loans. Doing your due diligence about what you are eligible for can’t hurt and you could be surprised at the amount of help you can get without having to pay back huge loans at interest.
- Monitor demand - Business owners aren’t the only people being upended by this situation. Individual demand is sure to shift. Consumers are going to be building new habits and there’s a good chance that your business will be affected by these market shifts. Your business’ long-term health depends on understanding how consumers will react in the coming months. Brainstorm ways to shift your strategies to account for the shift in demand.
- Keep your employees in mind - Your employees are the most important part of your business, and keeping them at the front of your mind can go a long way toward getting back to net-positive as soon as possible. If you’ve had to cut labor costs during the pandemic, realize that it may be best for your workers for the time being. Congress has approved an extra $600 weekly bonus for unemployed workers. That means many of a small business’ staff will be paid better while they are unemployed than they are if they are working. Assess your needs and add workers as needed, but make sure that whatever your decisions are, that your employees are better off coming back to work. Getting your staff back working may just be a problem you didn’t foresee, so come up with a plan to get your best workers back, even if you have to substantially cut your payroll costs.
This situation has given business owners a lot to manage, but at Ferrum Technology Services, we are here to help you get back in action quickly. Call our knowledgeable consultants at 847-697-3282 today to see how we can help you manage this situation proficiently.