Basic Tips on How to Stay Afloat During COVID-19
While grocery stores, pharmacies, and businesses that sell “essential items” have undergone a surge in demand since the coronavirus crisis began in March, most small businesses are suffering revenue decreases, and many companies have shuttered as shoppers have limited their spending.
Twenty-two million Americans have filed for unemployment since mid-March in the span of just four weeks, practically wiping out the job gains seen since the 2008 financial crisis.
According to the New York Times, “This is the sharpest decline in consumer spending that we have ever seen,” said Luke Tilley, chief economist at Wilmington Trust.
Most small businesses have less than two months of cash on hand to deal with financial and unexpected challenges. The average company with monthly expenses over $10,000 generally doesn’t even have enough money to cover two weeks of their spending. If there aren’t enough funds, without a credit lifeline or cash infusion, businesses will have to either cut their spending drastically or close.
With consumers in an indefinite holding pattern, how are small businesses to survive? The following steps can help:
Communicate with your vendors. Enlist your vendors and suppliers for help. Reach out to see if you can get better pricing or payment terms. Some small businesses have negotiated a “payment holiday” for 30-60-90 days. Rather than asking for a price reduction, ask for an increase in the services the vendor provides you for a while at no additional cost. It can’t hurt to ask.
Generate goodwill. These are challenging times and recognizing another industry’s hard work can buy years of goodwill. A good example is Lakefront Brewery.
The Brewery gave away free 6-packs of beer to health care workers in the wake of the crisis. On the day of the giveaway, they also appeared on Facebook Live for a virtual toast, sending a message of gratitude to health care workers.
Community outreach. Like giveaways, never underestimate the power of community outreach. As a transit provider, Bublr Bikes is Greater Milwaukee’s non-profit bikeshare system. They’ve had to pivot with COVID-19, finding an additional purpose. With the “Safer at Home” order, they aren’t promoting their riding services. Instead, they are reaching out to another sector—essential workers.
As a transit provider, Bublr is an Essential Service. The pandemic’s financial impact on the essential sector does not go unnoticed by the staff. Bublr Sponsorship Lead Kristi Secord said, “We recognize that biking may be a safer mode of transit for many essential workers, so we’re here to support them and recently announced a $5 monthly pass for all Essential Workers during this time.”
Secord continues, “We are here to support Essential Workers and those who rely on Bublr to get to work and the grocery store. This is a financially difficult time for many people, and so we are offering discounts.”
In addition to offering a $5 30-day pass for Essential Workers, Bublr is offering a $15 30-day pass to the general public, a 50% savings considering the 30-Day pass normally goes for $30.
Think proactively. It’s reasonable to focus on what is happening today, especially since the situation is fluid and changing daily. However, it is critical to spend time thinking about how to rebuild once this situation is all over. What are the upcoming opportunities?
Reconnect with any small business network you’re a part of or look for local organizations to join now so that you can share resources and advice. Interacting with other business owners online through social media can also be helpful.
Don’t rush your decisions. People are dying from a novel disease, unemployment is sky high, and the stock market is on the world’s longest roller coaster ride. In this uncharted territory, it can be tempting to run out and make big decisions—for the sake of doing something. Business owners are entrepreneurs, and like any businessperson, they want to act. Acting prematurely might not be the best strategy when the COVID-19 crisis is ever evolving. People make better decisions with more information.
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