Trying times like the current global health crisis can turn the tables for many people: homes turn into remote offices, fine dining restos deliver food, fitness classes are done on the internet and guitar tutorials are taught virtually. These are scenarios of small businesses, which account for almost half of the world’s workforce, trying to find ways to keep connected with their customers amidst a disruption. But, how long can they survive?
When a crisis impacts the global economy, small businesses are the most hard hit. With less working capital on hand, closing the business for a day could jeopardize the day-to-day operations like salaries, inventory purchases, and equipment needs, and even more difficult to prepare and cope with emergencies.
Financial experts say that the secret to surviving a down economy is cash flow, which means keeping a steady inflow of money and minimizing its outflow. Entrepreneurs must take continuity actions by reshaping their business in a crisis-conscious way, trim expenses, track down unpaid invoices, build relationships with future contacts and improve processes. But, none of these can be executed without having a finance specialist who can provide you the funds and guide you through the process.
Find the Best Funding Option
The SBA (U.S. Small Business Administration) helps small businesses start, grow, expand, or recover. As the nation’s only go-to resource and voice for small businesses, they provide counseling, capital, and contracting expertise to help small entrepreneurs pursue their goals. Their funding programs range from Loans, Investment Capital, Disaster Assistance, Surety Bonds, and Grants.
SBA designed a Loans program called Corona Relief Options to help businesses overcome the challenges created by the health crisis. Among the options is the PPP or Paycheck Protection Program which provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program, and helps businesses keep their employees employed during the Coronavirus (COVID 19) crisis. Others include EIDL Loan Advance, SBA Express Bridge Loans, and SBA Debt Relief.
Trim Down Cash Outflows
Reduce your monthly cash outflows like rent, and take advantage of discounts on utilities. Also, cut wasteful discretionary spending (e.i. subscriptions), and opt to lease or buy cheaper, handed-down equipment rather than buying a new one. Pay bills later or in a staggered scheme.
Speed Up Cash Inflows
Collect receivables at the soonest possible time to ensure you have enough cash to roll over for the next day.
Keep a constant communication with your customers
Let your customers know that you are striving and thriving for them. Reach out to them by sending thoughtful emails, chat with them to say Hi or ask them How they are, or send them SMS, to make them feel valued at this most uncertain time.
Reshape your business for the current crisis
Reduce the amount of inventory you are holding to free up needed cash and add value to your customers’ purchases. This doesn’t mean really to slash your current pricing, but give them a little something more than the usual offers, and make some adjustments in delivering service in ways they are most convenient with.
Focus on productivity
Look deeper into your staffing needs and check on the most essential tasks. Although this may mean sending some on forced leave or worse, laying off a few, make sure that your action will help keep the business in active operation for a longer time with the numbers of staff you have kept. Also, talk to your staff, or conduct refresher training and be visible to them as much as possible to boost their morale and keep them motivated to double up productivity.
Disruptions may come anytime, and they may purge every penny from your pocket and pull your systems down. But, working your way up to cope with the right funding partner to carry out business continuity measures, is a sure win to survive and bounce back stronger and better.