4 Things Entrepreneurs Should Do Right Now to Save Their Small Business, According to a CEO
On March 13, 2020, NFIB’s Research Center shared new data about the impact of the coronavirus outbreak on small businesses. The survey revealed that the vast majority of small businesses (74%) were not currently impacted by COVID-19. However, 23% of small business owners reported being negatively impacted. 43% of the business owners that were not currently impacted anticipated their business to be impacted if COVID-19 spreads to their immediate area over the next three months. And, if the outbreak continues to escalate, small business owners expressed their concern about future disruptions to their business.
In response to a crisis, I believe that great opportunities come from difficult times. When a challenge or major change happens, entrepreneurs are ripe to seize the moment to improve and grow. This too shall pass and entrepreneurs will be able to rise from the pandemic stronger than before.
Until the new normal happens, however, here’s what entrepreneurs can take of now to protect their small businesses.
1. Apply for funding relief.
Small businesses in need of financial aid may begin applying for business relief and assistance programs. Several programs are offered through the U.S. Small Business Administration (SBA). These include, but not limited to, the following SBA loans:
- Paycheck Protection Program (PPP) — This program helps millions of Americans employed by small businesses to retain their jobs. Eligible recipients may qualify for a loan up to $10 million, based on eight weeks of prior average payroll. The PPP loan has a six-month deferment period for payments. Businesses able to maintain their workforce will have a portion of loan proceeds used to cover the first eight weeks of payroll forgiven by the SBA.
- Economic Injury Disaster Loan (EIDL) — This working capital loan provides eligible small businesses with up to $2 million to overcome a temporary loss of revenue. Additionally, EIDLs provide a loan advance of $10,000. These funds are made available within three days of a successful application and do not need to be repaid.
- SBA Disaster Assistance Loans — Small businesses and nonprofits severely impacted by COVID-19 may apply for a disaster assistance loan through the SBA. Eligible small business owners may use these low-interest loans to pay fixed debts, payroll, accounts payable and other small business bills.
How soon should you apply? Once you have determined your eligibility, begin applying for loan relief as soon as possible. As stated in The New York Times, these SBA programs have limited funding and assist on a first come, first served basis. You may also look into private sector grants as well, including relief funds from corporations like GoFundMe and Amazon.
2. Utilize coronavirus resource hubs.
As small businesses struggle to transition from an open storefront to a remote workplace, it’s difficult to find a reliable playbook that explains what to do next. The U.S. Chamber of Commerce has created a coronavirus survival guide for small businesses. Scroll through their tool kit and you’ll be able to navigate to a wide range of content for small businesses.
3. Be transparent and communicate with customers, creditors and team members.
Now is the time for small businesses to have the necessary conversations. If you know you’re unable to pay this month’s lease or struggling to make a loan payment, contact your landlord or lender to explain your circumstance. See if an arrangement can be made to defer or reduce the payment due to hardship. If a client owes you a certain amount of money, look into the possibility of accelerating the payment.
Leaders and business owners must also elevate their leadership style in a manner that supports their team. It is better to over-communicate with your team rather than not communicate at all or sporadically pop in and out with emails and Zoom calls. Share with your team what your expectations are, communicate actionable strategies, and encourage feedback and engagement from everyone. Above all, remain positive, practical and focused on opportunities.
4. Pivot and adapt where possible.
Major fashion houses like Burberry and Giorgio Armani have set aside haute couture to sew masks. The LVMH factory in France has stopped making Dior perfumes and switched to hand sanitizer. On a smaller scale, businesses across the United States are also working to pivot their business models. Restaurants are providing pickup and delivery services and costumers in the entertainment industry are sewing hospital gowns. Even tampon startup Aunt Flow in Columbus, Ohio has switched to sewing face masks for hospital workers.
In times of crisis, it’s true that we do look for the helpers. However, many of these companies are doing more than helping to provide aid. They are pivoting their business models entirely, a move that does more than keep their companies from shuttering. It allows the business to seize the opportunity to help and make change — and ultimately grow, as I mentioned at the beginning of this article.
When the new normal happens, some aspects of life will go back to being the same. In the case of small business owners and entrepreneurs, however, things will be quite different. Entrepreneurs that were able to succeed and remain nimble will emerge more aware. They will be ready to hit the ground running and have pent up innovative and strategic ideas to improve all areas of business and life.
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