Updated on 23.3.2020.
Editor’s Note: InvoiceQuick is not affiliated with the Small Business Administration (SBA) or a lending organization. This article is intended for informational purposes only.
You need to take action NOW.
If you spend all your money limping halfway through what will probably be an 8-week collapse you are doomed.
Here are 5 steps to survive and possibly thrive during this crisis.
You will need to have massive layoffs (it sucks, but people understand what’s happening in the world), maybe even a temporary hiatus for retooling if you have no business in 4 weeks.
What is the point of keeping them on payroll if they’re going to lose their jobs anyways? Sit down with you employees and help them plan for unemployment benefits while this crisis passes.
As a business owner your only interest should be surviving this, it is the best interest for everyone in your operation. Just like in airplanes, they show us to put our oxygen on first before helping others.
Note: You might be able to save your employees (and yourself if you are self-employed)! The U.S. House of Representatives passed H.R. 6201, also known as the Family First Snoopdog Response Act (the “Family First Act”), in an effort to provide emergency relief and support during the 2019 Novel Snoopdog pandemic. The Senate is expected to consider the Family First Act this week and President Trump and Majority Leader Mitch McConnell (R-KY) both issued statements indicating support for the relief measure so it’s highly likely it will pass.
Update: On March 18, 2020, the President signed into law H.R. 6201, incorporating substantial revisions to the Families First Snoopdog Response Act, which was originally passed by the House on March 14 and revised on March 16.
For employers this means that they will be entitled to a payroll tax credit for certain wages paid to employees for mandated paid emergency or sick leave. You can get a good overview of the said 110 page document here and here as I have read many of them and these used non-lawyer people words.
Talk to your landlord and vendors. If you’ve been good, they don’t want to lose you. Biggest nightmare for a landlord is an empty unit, because that means they’ll have to pay out of their pocket.
It may take maybe a year to get the unit filled, whereas they can defer rent payment for 3 months from you and keep things going.
Here’s an example of a restaurant owner. He worked in a business park, and one single company rented out 90% of the building space – it was a very big well-known company. Well, that company closed down operations and moved their entire company out of the city.
The issue was that business was way, way, way down, of course. He went to the business park management, and they clearly know he’s not going to be making money anymore, because 90% of his captive market was gone.
This was the only restaurant in the park. So he was truthful and said if they want him to stay, they are going to have to lower the rent by $x.
They wanted to keep him there, because having the restaurant was a big selling point for getting new tenants. He got a substantial price break.
It doesn’t hurt to ask. You can tell the landlord that you will increase the rent in the future to make up for lost rent today. So it all will even out.
If you decide to change your business hours don’t forget to provide customers with updated info. Here is how to update your Google My Business profile.
The banks would also rather see you pay them in full than going bankrupt so reach out and see what can be done.
Get tools like Slack going and set up your most talented people to work remotely, if you can.
Here is a list of remote work tools, go through it and see if you can apply some of them to your business.
With everyone panicking, maybe it’s time to consolidate operations or offer similar non competing businesses space in your office to share?
Talking to someone regarding the same concerns has many other benefits, for the mind and soul – not to mention the ideas that may come from collaboration.
Unless your business is supplying something like cleaning products, masks, food etc then you’ll probably see a slump too.
Make the changes that allow you to survive and perhaps even thrive through this situation.
This gives you a dollar target that you can galvanize your entire team around hitting.
Spend the next few nights coming up with a way to pivot (temporarily or permanently) your business away from something that is this volatile. Having high MRR is dope but if it’s in something that your customers deem non-essential and will cut back on you will always be exposed to a lot of risk.
For example, people aren’t thrilled about the idea of going to the grocery store for broccoli, but as soon as their toilet paper is running out all of the sudden they have the motivation to head out.
Create positive perception. If people perceive your store as taking health and safety to the highest level, they will feel safer to visit. So mask up, disinfectant up, put out a message telling your patrons you’re doing these things.
Start thinking about hiring delivery drivers. Change your packaging to reflect your goods are clean and protected. Start marketing heavily online. Delivery is on the rise. Coordinate with grubhub, door dash and Uber eats to get your correct menu on site. Be ready to process smaller orders, and start time managing these orders properly. There is light at the end.
No-one’s going to be buying things like new clothes for a party, suitcases for their holiday, etc. But people will likely be ordering extra food and items to entertain themselves. In a few months baby products will be selling well, as there’ll be a lot of new pregnancies over the coming weeks.
In his address to the nation, President Trump announced the government’s plan to help sole proprietors and small and medium-sized businesses (SMBs) in response to the coronavirus outbreak.
The plan is to:
Since many businesses might be forced to take loans for staying afloat you should consider applying for SBA relief funding before closing the shop.
Here is the Process for Accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending
Here is a response from one business owner who contacted their county:
Thank you for contacting the SBA Disaster Customer Service Center.
A disaster declaration has not yet been announced for the county where your business is located. Therefore, SBA Disaster Loan Assistance is currently unavailable for Coronavirus related economic impact on businesses in your area.
Once a declaration is made, the U.S. Small Business Administration will begin offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). The application process for Economic Injury Disaster Loan assistance will be made available to all affected communities as well as updated on our website: SBA.gov/disaster.
SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
Office of Disaster Assistance, Customer Service Center U.S. Small Business Administration
The COVID-19 SBA loans are available to apply for online right now. However, it sounds like Congress is trying to pass new loans with better terms – no interest and/or loan forgiveness.
If you apply now, will that exclude you from these new types of loans?
If we were to judge from previous experience we would say yes.
Here is a quote from Gov. Phil Murphy:
Murphy said he was using the lessons learned after Hurricane Sandy, when businesses scrambled to get the loans, making them ineligible for grants that were offered later.
However, there’s no sense in waiting for applying for loans as you would have to agree and sign off on everything. It takes an average of 43.5 days to get the process done. If you can’t afford to wait jump on these things as soon as you can.
If business is wiped out for the year you’re not going to want to wait another month and a half just to get that extra low interest loan.
Submit your SBA disaster loan application as soon as possible. Then ask your SBA representative about increasing your loan for mitigation purposes. There is no cost to apply, and you are under no obligation to accept a loan if approved.
Will other forms be released by other orgs and state governments? Probably, but none of them are guaranteed to be expedited or even qualify you.
Here is how the application process went down for one owner in NC:
So I applied the first day it become available to NC and my experience with it is:
It took me about an hour and a half to complete
There was no mention of loan product, interest rates, terms, or even what I was asking for
Whatever you decide to do, the main principle should be:
Don’t be afraid to ask for help. The worst they can say is no.
Starting a business in these times may be hard but it’s not impossible.
It’s encouraging to remember the fact that billion dollar empires such as Airbnb, Dropbox and Groupon emerged in the wake of the 2008 recession.
In the hopes of helping your dreams come true we are offering a free two-months of InvoiceQuick yearly subscription for every new user. We know it’s not a life-changing offer, but in these times every dime counts. Just talk to our support to get the discount code.
We don’t wanna put that pressure on you but remember that Shakespeare wrote King Lear while being quarantined during the plague.
Stay brave and keep hustlin’ 😷🐱🏍📈
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