The COVID-19 pandemic and efforts to stem the outbreak knocked the global economy into a recession-like state, sent financial markets into the worst skid in more than a decade and led to millions of Americans losing their jobs.
Small businesses, especially restaurants and brick-and-mortar retailers that traditionally rely on in-person customers, were hit particularly hard as social distancing and shelter-in-place orders in many states forced people to stay home.
Even though the government took major steps to give entrepreneurs a financial lifeline in the form of expanded emergency small business loans, the pandemic's impact on small businesses was major. Some 59% of small businesses said they experienced losses related to the coronavirus crisis, according to a survey by Next Insurance.
As we enter a new normal, there is still a great deal of uncertainty ahead. There is concern about new virus variants, and small businesses must stay prepared for recurring social distancing measures and a smaller workforce. No matter what lies ahead, there are ways that small businesses can navigate their recovery and stay strong in the face of lingering pandemic aftershocks.
1. Keep accurate records.
If your business had employees before the pandemic, you likely already had a system in place to track absences and manage leaves of absence. But COVID-19 had an enormous global impact that generated new laws, and your human resources system must be aware of and in compliance with new legislation that may affect your company.
For instance, your employees may have utilized the Families First Coronavirus Response Act. If so, you may be required to extend paid sick leave and expanded family and medical leave for COVID-related illness. It's your responsibility to create a system to track absence dates, remote work options and payroll adjustments.
Even if your business didn't suffer a significant pandemic-related impact, now is still a great time to consider how your business will track emergency changes in the future. Failure to maintain accurate records can result in major consequences for business owners, including heavy fines and a damaged reputation.
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2. Manage your finances.
As your small business recovers from the worst of the pandemic, it's essential to assess your finances and do whatever you can to preserve cash and maximize your access to credit so that you can rebuild your financial cushion.
- Focus on cash flow management. Do you have a solid grasp of how much money is projected to come in and how much you need to pay out to keep up with your expenses and pay employees? A solid cash flow management plan is even more essential for business owners in industries hit hard by the COVID-19 pandemic, including the restaurant, manufacturing and retail industries.
- Create a financial system. For many businesses, post-pandemic recovery brings significant challenges. As you recover from decreased revenue and face uncertain future cash flow, it's more critical now than ever to create a financial system. Tracking expenses, invoices and inventory will guide your recovery while providing a realistic perspective of where your business currently stands.
- Switch to a central accounting solution. If you've become accustomed to tracking your finances via multiple spreadsheets, now is an excellent time to invest in an automated cash flow management system. The best accounting and invoicing software links all aspects of your finances, including accounts payable and receivable, providing a real-time view of your cash flow.
- Amass a savings cushion. A solid in-house financial system will also make it easier to gain access to capital funding, if needed, and track savings. Focus on growing a savings cushion that could maintain operations for at least one year in case of future emergencies.
- Negotiate lower rent, if possible. Rent is likely the biggest expense many business owners face. If you haven't already, approach your leasing company and see if they will rework your lease terms in light of pandemic losses and future uncertainty.
3. Maximize your online options.
A business's online presence is impervious to pandemics and other emergencies. Here are some ideas for managing your online options and staying relevant to your customers.
- Expand your online presence. If your business already has a robust online sales presence, it's wise to focus on it and expand, if possible. While shopping from home was a pandemic necessity, online shopping is a convenience many consumers appreciate and prefer. E-commerce isn't going away, and online sales will continue to grow even in the post-pandemic era.
- Consider a mobile app. If you own a business without an obvious online angle, such as a bar, dry cleaners, clothing store or restaurant, explore ways to sell your wares online. Mobile apps are handy, capable tools for selling apparel and other goods, for example.
- Consider streaming video as a sales tool. Would your skills or knowledge translate well into short videos or one-on-one video lessons? For example, if you own a restaurant, would your customers pay a small fee if you offered a brief online class on how to make your best menu items? This same principle can work for crafting cocktails, tailor-made fashion advice or personal training, and there is no shortage of apps to handle video streaming and payments.
- Use the internet as a communication platform. Even if you don't think you have a way to sell your skills online, consider reaching out to your customers by writing a blog or being more active than usual on social media platforms.
- Polish your digital assets. This is also a good time to revise and enhance your digital assets, including your business website, social media profiles and online advertisements. Creating a brand voice for your business on social media can help shore up your business during healthy economic times as well as during any future unexpected shutdowns.
4. Keep the team together.
Your workforce is your greatest asset, and as you emerge from the pandemic, it's essential to safeguard your employee relationships and continue to foster teamwork and collaboration.
The pandemic shutdown shifted many workers to remote positions, but as more businesses return to regular operations, some organizations may continue to cater to a remote workforce. If your business will continue to allow full-time or part-time remote work, follow best practices for keeping your remote team engaged and motivated. This includes focusing on employees' well-being, fostering teamwork, and creating a remote work policy that ensures successful collaboration and security.
Tools like Skype and Microsoft Teams can keep employees from feeling isolated. The best video conferencing services make communicating with team members and customers across the world easy while fostering collaboration.
Also, show your employees how much you appreciate them. If they stuck with you during hard times, be sure to thank them personally, and consider rewarding them with flexible schedules and time off. Support your employees' mental health, stay transparent, and communicate with your employees about how the business is doing and what your future plans are.
You can control only what you can control. Crises like the COVID-19 shutdown can create significant disruptions, but whatever your business faces, you can pivot and use the challenge as motivation to explore how you can make your workforce more productive and your business more efficient.
Dachondra Cason contributed to the writing and reporting in this article.