According to the U.S. Small Business Administration, there were over 30 million small businesses which employed over 58 million people in 2018. The reality is that COVID-19 will devastating for many of those businesses, especially minority owned small businesses in our country.
The greatest business losses and job losses in our nation will come from small businesses in communities across the country. The impact to minority-owned businesses will likely be much greater.
Small business owners are resilient by nature and are accustomed to facing tough challenges daily. The long-term impact of COVID-19 on the business community will be different.
Faced with today’s COVID-19 challenges, some small business owners will find ways to survive through creativity, ingenuity, determination and innovation. I have spoken with many businessowners who started their businesses when they had no other viable work options – my situation when I started my company in 2007. I’ve also been encouraged by small business owners who found a way to survive the tough economic downturn our country faced between 2008 – 2010. I remember those challenges well.
Over the past 13 years, I have not only focused on growing my business, I also focused on learning the business of small business. As a recent graduate of the Goldman Sachs 10,000 Small Businesses program (10KSB) at Babson College in Boston, I appreciate the business resources provided via 10KSB.
A recent Goldman Sachs Small Business Survey indicated that half of those small businesses surveyed didn’t believe they would be in business beyond the next three months.
According to the U.S. Small Business Administration, there were over 30 million small businesses which employed over 58 million people in 2018. The reality is that COVID-19 will devastating for many of those businesses, especially minority-owned small businesses in our country.
What to do now
Here are five important things small business owners must do right now to help mitigate the negative impact of COVID-19:
Take care of yourself and your people. I know that sounds easy, but is it? Navigating through tough times requires clear thinking and a healthy perspective. That perspective is best gained by ensuring that you are eating healthy foods, getting some type of exercise, establishing a daily routine, and keeping yourself informed.
Facebook is not your friend right now and should not be your primary source of information. It’s important that you read and follow established safety guidelines published from credible sources, such as the Centers for Disease Control, The Small Business Administration, or your local health department websites. I only use and pass on information from credible sources.
Understand current government programs. This is a tall order. There is so much information on the internet regarding these programs, but it’s important to use information from credible sources. The CARES Act – Coronavirus Aid, Relief, and Economic Security Act was passed by Congress and signed by the president with provisions designed to keep small businesses in business and lessen the number of small business closures in our country.
I participate in several CEO groups and much of the discussion lately focuses on ensuring that we are in the best position to maximize government assistance with our businesses. Understanding these laws can be difficult if you are trying to do this alone. Seek advice from reliable professionals. The SBA does not charge for information and local Small Business Development Centers in local communities offer free assistance to small businesses.
Manage your money. Maybe I should rephrase that and say, micromanage your money. Cut all unnecessary expenses. Engage your banker immediately and discuss your situation with them. Speak with your accountant now and often. Don’t wait.
Should you establish or increase your line of credit? If you own your building, consider whether you should request a temporary suspension of principal and or interest payments. Ask your creditors in writing for 90 days of suspended payments. Focus on your receivables and ensure those that owe you are remaining solvent and can pay you. Budget for 90 to 120 days of busi-Think creatively. Does a temporary or permanent pivot make sense for your business? Can you expand or enhance a line of services? Can you partner with another business to collectively provide a unique and needed service offering? Creative thinking flourishes when you are free of self-imposed rules and constraints – focus on possibilities and solutions to problems without restricting your ideas.
I received a call from a small business owner who recently registered to do business with the federal government. This business owner offers a much-needed product that is in demand now. With just a few calls, we were able to connect that business owner with potentially life-changing opportunities. It all started with the business owner thinking creatively and making phone calls to friends and business acquaintances. Now is not the time to become paralyzed in thought or actions.
Don’t take business advice from “barracks lawyers.” During my 22 years serving the nation as an Army officer, I routinely encountered situations where young troops would get legal advice from their peers, so-called barracks lawyers. Barracks lawyers often think they know how to help, but much of their advice and counsel tends to be grounded in what they learned on TV or from a friend and is seldom accurate.
Seek advice from experts and ensure you get your information from credible sources. I only take advice and counsel from sites such as the Small Business Administration, the Center for Disease Control, chambers of commerce websites, and other reliable sources.
Ask yourself and your trusted advisors, what kind of business pivot makes the most economical sense for your situation. We have all heard of the beer distributors that are now making hand sanitizers.
Brian Butler is president and CEO of Vistra Communications, an integrated marketing, communications and consulting agency. For more COVID-19 business resources, visit consultvistra.com.