photo credit: Rabiah Sutton
The COVID-19 pandemic thundered into our lives very abruptly with no warning, little explanation, and a lot of misinformation. It seems like every hour, we are getting new updates on how this proverbial storm is impacting our homes, work, local communities, and the world at large. We’ve seen government agencies, their support contractors, entire industries, product companies and small businesses of all kinds impacted in various ways. Aside from the obvious health implications of COVID-19, the economic impact is growing daily. Businesses need to not only to think outside the box to survive, they need to implement new strategies to thrive. I’ve laid out 1) the challenges that businesses are encountering and 2) a few strategies they can implement to lessen the impact of the pandemic on their bottom line and perhaps even thrive.
• Access to Capital
Emergencies such as COVID-19 are putting a strain on cash flow for all businesses. Handling access to money for payroll, resources, services, supplies, and inventory is nothing new for most businesses, however this pandemic has thrown a curveball at an already essential component of every business.
Many services businesses and public sector agencies are set up to run a remote workforce, but many are not. Furthermore, businesses that haven’t even considered remote work are having to pivot if they want to stay in business.
• Supply Chain Disruptions
The closing of storefronts, warehouses, cities, states and countries has had a significant impact on supply chains, resulting in inventory delays, shortage in manpower for deliveries, etc.
• Examine and restructure
If your business is one of the many that have been ordered to close, now is the time for you to examine and restructure. You are most likely considering how your business will survive, how you will make payroll and pay your bills. You need to look at how much you have in savings, how much debt you have, what your costs are and where you cut nonessential expenses as well as explore where you are going to find a backup source of funding. You need to examine how you will implement changes to your business model. For example, how can your employees work remotely? How will you respond to supply chain disruptions? You need to explore how you will innovate to bring your business online and use technology to your advantage.
• Government assistance
For small businesses, the Small Business Administration has approved allocating some disaster funds to small businesses. In the case of a physical disaster such as an earthquake, small businesses that suffered damages would be eligible for loans. But now, this disaster is hitting everyone. The SBA is classifying the coronavirus pandemic as a disaster and has made a deal with each state in which governors can apply for disaster assistance for small businesses. Businesses that are incorporated in each approved state can apply for loans up to $2 million dollars at a very low interest rate with terms up to 30 years. Existing disaster loan payments will be automatically deferred to December 31st, 2020.
If your business can’t be operational right now, you need to pivot. It’s time to be creative and think outside the box. What can your business do? You should explore adding another line of business or multiple lines of business that are providing items or services that are needed right now. Think if you have some capacity to make those items or provide those services. Maybe you can coordinate with others to make them. For example, many distilleries have converted to making hand sanitizer, which is urgently needed right now. The fashion designer Christian Siriano has his sewing team making masks for medical personnel. Ask yourself: what else could my business be doing to bring in another stream of revenue that’s either related to what we currently do or offer? Maybe it is something totally different. But you are going to have to diversify because right now, it’s a must. Business owners should have multiple sources of revenue. So, if you didn’t already, now is the time.
Rabiah Sutton is the founder and CEO of FWDthink, an award-winning consulting and advisory services firm that specializes in performance improvement and strategic planning for government contractors. She is an expert business strategist and coach who holds a M.B.A from John Hopkin’s University and a B.A. from American University.
For more information, please visit www.fwdthink.com.