Small business owners know the key to survival in any economy is flexibility and adaptability. To handle difficult situations, such as the restrictions imposed during the current coronavirus pandemic, entrepreneurs must be creative and think outside the box to come up with solutions for business survival.
Here are three ways small businesses can successfully navigate to a positive outcome.
1. Scale to Meet Unusual Demand
In order to scale your company during the pandemic, your type of business would likely have to be deemed essential and be in high demand to provide services or products at an increased pace. If this describes your company, you need to follow three carefully planned steps.
- Talk to your team. It is important to get everyone on board and realistically take a hard look at your business to see what resources you have to make scaling possible. Ask for feedback about what your staff is hearing from customers—what products/services are in most demand and what are expectations about the delivery time? How quickly can you ramp up?
- Check your numbers. Before putting any new processes in motion, you need to make sure you have the funds to reallocate to your most in-demand services and products. And that you won’t hurt the other parts of your business that are still operational, albeit at a slower pace. Go over the numbers with your accountant and determine if outsourcing some tasks will enable you to scale faster or more efficiently.
- Get the word out. Take your message to social media, your website, and email. Call your most valuable customers to let them know you’re ramping up your business and ask if they need anything.
The same steps apply in case your business needs to temporarily slow down due to fewer customers or required shutdown. Talk to your team about how to make the rollback the least detrimental for the business, investigate options for continuing to pay your staff, and let customers know the rollback is a temporary situation.
2. Reduce Costs to Get Through
There are several ways you can cut costs in your business and save precious capital.
- Defer business expenses. Banks, credit cards, mortgage companies, and even auto leasing companies are offering consumers and businesses bill deferment for anywhere from two-six months. Usually, interest will still accrue, but small expenses add up quickly and deferment can help you get over the hump.
- Postpone plans. Any plans for business expansion, remodeling, equipment upgrades should be postponed until the market picks up and business gets back to near normal.
- Negotiate with Suppliers. “We’re all in this together” extends to your suppliers, too. Talk to manufacturers, wholesalers, and distributors for better terms or payment deferral. Many suppliers are extending allowances to help customers stay in business.
- Go virtual. Even if your business is deemed essential and you’re able to keep your doors open, consider sending some or all of your team home to work remotely. You can save money on utility costs by having workers do their jobs from home.
- Cut hours. Businesses around the world are cutting employees’ hours and although it might not be an ideal solution, it is better than draining crucial funds keeping the business alive.
3. Innovate and Pivot
Successful entrepreneurs are addicted to innovation and innovation in a time of crisis is when creative minds are often at their best. According to Larry Clark at HarvardBusiness.org, what these innovations have in common is “they will solve problems, which is always at the heart of innovation.” The innovations are “driven by the intensely human desire to help, to connect with other people, and be part of the solution when things get hard.”
Now is the time for great leadership, for digging in and reconnecting with the innovation and motivation you used to build your business before the pandemic slowed you down. Here’s a quick reminder of the ingredients for innovation and leadership.
- Listen. Surrounding yourself with people who always agree with you stalls the development of new ideas. Encourage debate and listen to all opinions.
- Delegate. While you’re figuring out how to navigate your business during the crisis, give your staff more responsibility and decision-making authority. You may be surprised how many new ideas surface when you aren’t micromanaging.
- Be engaged. As a leader, you need to be there for your employees, suppliers, and customers. How you act during this coronavirus crisis will be remembered after it’s over. Be there to offer solutions and be supportive. The more engaged you are, the better the environment where innovation and inspiration can thrive.
There are several ways to apply for various government programs or alternative funding opportunities. We outlined many of these in the following articles:
We understand how stressful and challenging it is for so many small business owners today. We are here to help so you don’t get overwhelmed. Call our business consultants at 888.449.2638 for help with starting a business, obtaining business licenses, or staying in compliance.