Taking Coronavirus Uncertainty Head-On: A Small-Business Owner's Guide
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The spread of COVID-19 has not only raised serious health concerns, but also created economic uncertainty worldwide. There’s potential for employees to take an increased number of sick days and customers to spend far less time in stores, while ecommerce businesses are already facing increased supply chain and shipping challenges — all of which could take a serious toll on businesses worldwide.
At BlueVine, we are already seeing some early impacts of the outbreak on our customers. For example, a Northern California-based art dealer informed us that business is drying up because the majority of their revenue is generated from Italy. Business at a ramen restaurant located in a predominantly Chinese neighborhood in Southern California has also significantly slowed.Related: This Air Mask Company Struggled to Take Off. Then Came Coronavirus.
The current market environment amid the outbreak has the power to be most painful for small businesses, with some already expressing concerns of long-term loss and potential shut-downs. While much of the impact in the United States remains to be seen, it is vital for small business owners to remember that the best defense in times of uncertainty is a strong offense, which requires preparation and clear thinking.
Having worked with thousands of U.S. small businesses to weather a variety of business cycles — from providing capital and funding growth strategies to helping companies address unexpected cash-flow shortages in emergency situations and investing in inventory or payroll needs — the BlueVine team has developed a list of crucial considerations and actions small business owners can prioritize now to take these uncertain times head-on and minimize potential business impact.
Well-being is priority number one
The health and safety of you and your employees must be the number-one concern. In an evolving situation, look to experts who can provide the best advice on what is happening in your community. In the case of COVID-19, the Centers for Disease Control and Prevention provide helpful general updates on the state of the virus, as well as guidelines for specific industry sectors. You should also pay close attention to updates from your regional department of health, including business guidance, and heed their advice accordingly.
In times of uncertainty, cash is king
Monitoring cash flow comes next. Consider reducing your non-essential expenses, from hiring to halting large commitments and investments where possible. Access to capital is also critical and could mean the difference between staying in business and shutting down. Business owners should think about a revolving line of credit, which equips them with emergency cash when they need it that they pay for only when used. With that said, it’s important that business owners maintain a positive payment history and demonstrate responsible credit use. Lenders and credit companies will be monitoring business-credit habits closely.
Adapt and diversify
While it’s irrefutable that these are trying times, small businesses should challenge themselves to think creatively about how they can make adjustments to their business to adapt to the current climate. For example, a restaurant owner can consider delivery if they don't already offer it or think of ways to make their delivery option more enticing, such as a discount, fee-less ordering or coupons for future use. Service providers may consider remote tools like teleconferencing to interact with customers rather than in-person meetings. Manufacturers should seek out local suppliers. Costs may rise, but it's better than the alternative of inventory drying up altogether.Related: Coronavirus Spikes Demand for Cannabis Delivery
And finally, small business owners should find some comfort in knowing that in being small, they have the advantage of being more nimble and agile, which allows them to adapt more quickly than larger companies. By prioritizing health, cash flow and thinking quickly and creatively about business model adjustments, small businesses can better position themselves to weather any uncertain time. And the time to start is now. After all, the secret to getting ahead is getting started.