The novel Coronavirus or COVID-19 presents a great threat not only to human health but also businesses, large or small.
Small businesses, however, will be the hardest hit from the ongoing COVID-19 pandemic. In many countries, businesses have been closed for over a month.
Small business owners must understand that health authorities will eventually ask people to stay indoors to contain the spread of COVID-19 if they haven’t already.
During an outbreak or even when a federal, state, or local government begins taking precautionary measures to fight COVID-19, people will consume less; their purchasing power too would be affected. Therefore, while the COVID-19 crisis lasts, it is important for small business owners to ponder upon ways on how to survive or battle the challenges that face them.
Here in this post, we will shed light on 13 COVID-19 crisis management tips for small businesses.
- Update Your Financial Statements
- List Possible Impacts of COVID-19 Outbreak on Your Small Business
- Rework Your Budget
- Manage Your Stock
- Get Ready to Have Your Staff Tested for COVID-19
- Supply Continuity: Reach Out to Your Vendors
- Reach Out to Your Service Providers
- Reach Out to Your Lenders
- Be Empathetic When You Decide to Reduce Employee Hours
- Help Your Employees through the COVID-19 Pandemic
- Adapt to Current Market Trends
- Remain Calm
- Spread Optimism
1) Update Your Financial Statements
In order to make informed decisions during a crisis, you need to have the most up-to-date information on the financial condition of your small business on your desk. So, make sure to keep personal & business finances separate and update your financial statements on a regular basis to know –
- If you are likely to face a cash-crunch in a few weeks from now.
- If you need to reach out to your lenders.
- If you need to defer some pending payments.
- If you need to reduce employee hours.
- If you should take certain steps to reduce operating expenses.
- If a certain product or service is more in demand at the moment.
- If you should cut spending you believe is unnecessary in a crisis (e.g. advertising).
- If you should reduce drawings from the business.
- If you need to reduce staff costs, possibly by reviewing staffing arrangements.
COVID-19 crisis management for a small business can be only as good as the information you base your decisions upon.
2) List Possible Impacts of COVID-19 Outbreak on Your Small Business
Talk to your employees, suppliers, and some customers to gauge the likely impact of COVID-19 outbreak on your business.
You need to understand how sales, staff availability, cash flow, and supply chain could possibly be affected.
If your small business operates in an area already hit by COVID-19, you can make such a list from personal experience.
You can start developing a mitigation strategy only after you have quantified the impact that a COVID-19 outbreak will have on your business.
3) Rework Your Budget
Budgetary projections for a year are made on the basis of various assumptions. Since we are staring at the COVID-19 pandemic wrecking havoc all over, those assumptions are no longer valid.
Your budgetary estimates most likely did not factor in a 50-80% decline in sales in just three months, non-availability of staff, shortage of key supplies, and other such scenarios.
Who could have thought a contagious disease will affect every person on the planet in 2020?
In light of the new scenarios, you need to re-do your budget with your accountant.
4) Manage Your Stock
If you have items in stock that may not last 3-6 months, you need to take steps to sell them off as quickly as possible. You can even offer discounts on such items to increase sales. Use the same approach to sell off excess or obsolete stock.
At the same time, you need to reduce stock orders for items that you believe will be in low demand over the next six months. Increase purchases of stock that are likely to be in high demand in your locality in the near future.
5) Get Ready to Have Your Staff Tested for COVID-19
If there hasn’t been a COVID outbreak in your town or city already, you may consider procuring rapid COVID-19 detection kits early on. If one of your employees has recently traveled to a city or country affected by COVID-19, a test can help ascertain if he should be asked to self-isolate himself at his own or continue working. You can also contact local health authorities to find out if there are any designated COVID-19 testing facilities in your area.
6) Supply Continuity: Reach Out to Your Vendors
Reach out to your vendors in order to confirm supply continuity. Call them up or schedule a video call.
Find out if they are facing any hurdles currently or see any supply chain disruptions in the foreseeable future. Global supply chains are hit by COVID-19 outbreaks in various countries already and if there is an outbreak in areas where your vendors operate, local supply lines can get broken too.
Therefore, it is a good idea to stock on essential supplies that you need for business continuity early on. Find out if your vendors can help you with that.
Some of your vendors can also offer you deferred payment terms if your small business is experiencing cash-flow problems or you need a financial cushion to wade through the crisis. Do consider doing the same for your customers if you operate in a B2B market.
Your vendors, too, could be small businesses; they could be having a hard time dealing with various challenges as well. So, you need to be considerate of their situation too.
7) Reach Out to Your Service Providers
Small businesses often rely upon third-party service providers for various business functions. These may include companies that provide IT support, business telephone solutions, website hosting, bookkeeping services, accounting software, social media management services, etc.
Regardless of whether these companies are located in your city or elsewhere in the world, be sure to know if they’d be able to ensure service continuity. Assess any potential concerns pertaining to the non-availability of these services.
It is possible that employees at these companies have been deployed to work from home. You need to find out who you can contact (and how), should you urgently require any assistance.
8) Reach Out to Your Lenders
Talk to your lenders and see if they can agree to deferred payments or extend your credit lines.
Given the crisis, most organizations these days are willing to make some out of the ordinary adjustments for debtors. Several federal and state agencies have also announced various relief measures for small businesses. Stay abreast of the latest announcements but do not wait for someone else to come looking to for you. You need to be proactive in reaching out to your lenders.
9) Be Empathetic When You Decide to Reduce Employee Hours
If your small business is up and running, consider yourself lucky! Millions of small businesses around the world are closed for over a month and at risk of closing.
One way or the other, your small business will get to a point where reducing some of your workers’ hours will become necessary.
Talk to your workers about their financial situations. You will be amazed at the solidarity people exhibit during crises. Your workers may voluntarily ask you to reduce their pay or self elect to reduced work hours.
10) Help Your Employees through the COVID-19 Pandemic
If schools and daycare centers are closed in your area, it’s likely that your workers need more time to support children at home. They may also be caregivers for a sick family member. In such situations, you can offer them more flexible work hours.
11) Adapt to Current Market Trends
Understanding the current market trends are difficult. But if you can make sense of what is happening in the market and predict future trends, you may be able to turn the situation to your advantage.
What if your small business can provide products and services more remotely than you previously thought was possible?
What if you need to alter your brand positioning to get more business or you stand to gain loyal customers during this crisis by walking the extra mile?
How can you make up for the losses when quarantine lifts or the lockdown is over? Can you generate a new revenue stream? Is there a way to take your business online if you haven’t done that already?
Ponder over the current landscape of your market and try to come up with ways to adapt your business’s positioning.
12) Remain Calm
In many countries around the world, federal, provincial, or local governments have imposed lockdowns to stop the spread of COVID-19.
If something like this happens in your city in the near future or is happening already, try to remain calm and objectively assess the situation.
Educate yourself on how COVID-19 can spread in the workplace and steps that you can take to protect your employees from exposure to the virus.
If you have spare time at hand, use it to gain new skills. There’s no dearth of
13) Spread Optimism
The COVID-19 pandemic is affecting everyone. We don’t know how long it will take for us humans to contain the pandemic but the fact is that we WILL get there. In the midst of all this, we all need hope. As a small business, you can use your online and social media presence to spread optimism. Avoid sharing content that can cause panic.
Lastly, take all precautions necessary to protect yourself, your workers, your customers, and your business.