updated - October 26, 2020 Monday EDT
Just a few short weeks ago, your business might have been in a very different place than what it is now. Unemployment was low, the economy was doing well, and small businesses were focused on innovation, product development and providing the best service.
Now, with the Covid-19 outbreak hitting the U.S. fairly hard, businesses aren't thinking about things like developing new products but are instead focused, temporarily, on just being able to keep their doors open and make it through this crisis.
The following are some things that all small businesses should know right now, and ways they can apply these lessons to potential future crisis situations as well.
A lot of what you can do right now is focused on your perspective and your attitude.
Start looking at new opportunities that can come from the Covid-19 crisis for your business, and also see how this might have exposed the weaknesses that you can address.
As part of identifying new opportunities, you don't just have to think long-term but perhaps think about what you can do right now as we're still very much in the thick of the situation. Don't let yourself get paralyzed with anxiety at a time when you could be identifying these opportunities.
Additionally, if there is anything you can do online, try it.
One of many examples is what fitness and yoga studios are doing-they're moving their classes online and then having customers pay for them to help support the business and their staff during this hard time.
You will typically have the same set expenses if you're a small business, and you can figure out what those are, and then which ones you can eliminate or delay over the next three months.
You should also think about talking to landlords and suppliers because they are more likely to be flexible with you and in some cases, they may be legally required to be flexible.
Anything that can be cut during this time go ahead and do it.
For example, maybe if you were thinking about hiring new employees, you hold off on doing so and instead work with freelancers.
You can also take this time to train and develop your existing employees. They may not be busy like they were prior to this crisis, but you can work on helping them learn new skills that will hopefully put your business in a better position when you are able to resume normal operations.
You can encourage your staff, for example, to take online courses right now, and you can do cross-training, so your employees are ready to take on what will hopefully be a big boost in the economy after the Covid-19 threat passes.
The biggest risk facing most businesses right now is a lack of cash flow. Only around half of small businesses last more than five years, even outside of the unprecedented situation we're facing right now.
The biggest thing most small businesses can do to help improve the likelihood they recover from this situation is secure liquidity, and there are different ways to go about doing so.
There are financial assistance programs that the Treasury is overseeing, as long as you make certain agreements as far as retaining your current employees.
Some of the specific programs available to small businesses right now include:
The Paycheck Protection Program is available for eligible nonprofits and small businesses and it's also available to people who are independent contractors and who are self-employed if they meet certain size standards from the program. You could be able to qualify for a loan of up to $10 million and loan payments are deferred for six months. If you maintain your workforce, SBA will forgive a portion of the loan proceeds used to cover the initial eight weeks of payroll and some other expenses that come with loan origination.
There is something called an Economic Injury Disaster Loan advance of up to $10,000 available, which offers working capital loans for up to $2 million so small businesses can combat their current loss of revenue.
SBA Debt Relief means the SBA will pay the principal and interest of new 7(a) loans issued before September 27, 2020, and it will pay the principal and interest of current 7(a) loans for six months.
There are also SBA Express Bridge Loans for small businesses who have a current business relationship with an SBA Express Lender.
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