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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
COVID-19: Is Your Small Business Prepared for a Second Shutdown?
In an effort to regenerate the economy, many state officials have taken measures to reopen after shutting down in the wake of the COVID-19 pandemic. While keeping public health and safety in mind, officials have implemented regulations that have allowed small businesses to reopen and residents to safely travel outside of their homes. This, of course, is good news for small business owners who have been struggling to get by, but what happens if a second wave forces the country to shut down again?
If you barely made it through the first wave, how will you get through another one that could potentially be worse? Thinking about this isn’t something you want to do, but is necessary if your small business is going to make it. Continue reading to assess whether or not your small business is prepared.
Are You Currently Managing?
How is your business doing presently? Are you able to pay all of your bills? Have you been able to rehire employees and reopen safely for your customers? Are you seeing an increase in sales? If the answer to these questions is no, then your small business isn’t prepared for another shutdown.
It is advised that you begin evaluating your finances and making necessary changes that enable you to handle operational costs. If your small business was hit especially hard as a result of the pandemic, there is small business assistance California and other states across the country. Start the application process now to get the funds you need to recuperate from the financial damage the pandemic has caused.
Do You Have Financial Backup?
The next thing you need to consider is your financial backup. Do you presently have enough money in your savings to cover the cost of operating your small business? If so, how many months can you survive before you run out of money (assuming sales don’t improve or decline)? If you don’t have enough money saved for a rainy day, it’s time to get serious about creating a cushion.
Creating a nest egg or financial backup for your small business will require you to reduce spending wherever you can. Review your budget and begin cutting costs where you can. Any additional funds will need to be put into an account. You also want to limit spending as much as possible. Keep in mind, that you may need to make some really hard decisions in order to save. For example, you may need to let go of non-essential employees or look for a commercial property with a lower lease amount.
Can You Transition to eCommerce?
Should the country decide that a second shutdown is necessary, non-essential businesses will have to close up shop again. Brick and mortar businesses will also see a decline in sales as consumers will likely be asked to remain home. Going months with a rapid decline in sales (or no sales at all) is a surefire way to lose your business. Therefore, it is ideal to have a plan.
During the pandemic, online shopping increased exponentially as consumers sheltered in place. For small businesses that want to survive, developing an eCommerce strategy is highly recommended. This creates a platform for your customers to receive your products and services despite the ongoing pandemic. If you haven’t done so already, you need to create a website, develop a marketing strategy, and devise a plan to get your products to the customer (production/shipping). Small business owners are also encouraged to create a plan to transition employees to remote work. Ensure that you have the necessary software and equipment the team needs to work from home.
After all that’s transpired over the past few months in response to the coronavirus pandemic it would be nice to know that the worst is behind us. In reality, however, the number of new cases and deaths are a telltale sign that shutting down may be unavoidable. To prevent further damage to your small business, it is imperative to ask yourself questions like those above to determine whether or not you’re ready and/or to devise a plan to get prepared.
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