Chicago Business Attorney Blog
The Key to Surviving as a Small Business
How can your business – and you – survive the COVID-19 pandemic?
It’s a tall order. But small business owners have means of surviving. The corollary shutdowns have impacted 20% of small businesses, according to the U.S. Chamber of Commerce, and restrictions have affected a far greater number. A study by the University of Illinois, University of Chicago and Harvard University and its business school estimates more than 100,000 small businesses are permanently shuttered. Not a surprise since many small firms don’t generally have more than a few months’ cash reserve.
Striking the right balance involves a complicated dance of using tech to work remotely as much as possible, employing safe practices in the workplace to protect your employees and customers when they are on site, looking for new ways to generate business while sticking to your principles, and looking for loans or grants where available.
And above all – DON’T PANIC! Adversity often provides opportunities, some of them even better than the ones you have availed yourself of in the past.
Safety First
Working remotely has been the norm for some companies even prior to the pandemic, which is making for an easier transition. Companies that haven’t need to consider which employees can reasonably be expected to complete their tasks from home—and then empower them to do so, based on the notion that you can trust them but also verify, since business outcomes are the bottom line.
The technology required to do this already existed, of course, although companies may need to beef up their cybersecurity to handle the surge in user endpoints if employees are using their own devices. It will also help to provide training to employees who need the knowledge base, as well as reassurance on how to get past hurdles they may face. Companies also will want to consider face-to-face video connections to help people stay in touch, while being accepting of background household disruptions.
When customers and employees are on site, although it can be costly, don’t skimp on safety measures such as having masks available, doing temperature checks, providing hand sanitizer, installing Plexiglas partitions in areas where people might be facing one another regularly, and adding directional signage to keep the walking traffic flow going one way as much as possible.
Innovate to Generate
Technology can help certain types of businesses not only keep their employees safe but generate new business. Although e-commerce has grown rapidly in recent years, nearly 90% of U.S. sales still take place physically.
An independent bookstore, for example, might need to bolster its e-commerce presence while hosting virtual events such as talks with authors. Restaurants have gotten by thanks to pickup and delivery. Clothing stores have gone curbside.
It helps if businesses of all kinds think about the changes due to the pandemic, how customers might change their behavior going forward, what will matter most of them, and how you can better reach them, whether via technology or otherwise.
Stay Calm and Have a Plan
Since online sales could never make up the difference in volume—and typically aren’t as profitable—small businesses also should seek loans, donations and other public support. This can range from the federal Paycheck Protection Program, if there’s ever a second round of it, to getting up a GoFundMe page to keep employees afloat.
Put together a mid-range financial plan—say three months out—that lays out your expenses and ways you could cut costs. One limitation of the PPP is that it does not cover other fixed operating costs, which a Rand survey of 21 small business owners found is their most common concern—how to cover rent and mortgage payments, and even utility and insurance costs.
Not panicking is more likely if you take care of yourself—eat right, exercise, consult with trusted sources and balance your mind before making major decisions.
The pandemic will eventually end, and the resulting recession will ease. If you keep your wits about you and think strategically, there’s a better chance your business will make it – and hopefully even come out the other end stronger than before. Having a strong relationship with experienced business lawyers who serve as trusted advisers to your business is always a proven means of finding support when you need it most.