Even under normal circumstances, small businesses are under immense pressure to produce results, often while working with razor-thin margins. Those margins make it a challenge to maintain positive cash flow, even during the best of times. That's a big reason why, according to a JPMorgan Foundation study, the average small business has cash reserves sufficient to survive for about 27 days with no additional revenue coming in.
Now, as the coronavirus crisis continues to disrupt businesses around the world, it's small businesses that face the sobering realization that their cash reserves won't be anywhere near enough to ensure surviving the pandemic. Some are banking on government relief in the form of low-interest disaster loans, grants, and other direct assistance to see them through. Others are modifying their operations to try to preserve their businesses the old-fashioned way—by adapting to survive.
In truth, it's likely that no small business will survive this crisis without taking an all-of-the-above approach and doing anything it takes to stay afloat. To help affected small businesses do that, here's a guide to the biggest coronavirus-related challenges small businesses are facing and how best to navigate them to emerge from the crisis stronger than ever:
Operating under restrictions
By far, the biggest coronavirus-related challenge that small businesses face right now is having to find ways to keep working, despite whatever restrictions apply in their area of operations. For small businesses with office workers, the go-to solution is to get some telework options up and running. Since small businesses often have few IT resources or rely on outside support firms to manage their technology, that's not always the simplest thing to do. For businesses that involve retail stores, things are even tougher, but not impossible.
Setting up office employees to work from home
To provide employees with the ability to work from home during a coronavirus stay-at-home order, the first step is to poll employees about what types of computers and hardware they have available for use. For any employee who doesn't have access to a relatively modern PC, the simplest solution is to provide them with a low-cost Chromebook. At a minimum, this will allow them to operate any cloud-based software the business requires and will permit the use of remote desktop access software to connect them to their office PC and work-related files.
With employees outfitted with the hardware they'll need at home; the next step is to get them connected to the machines they'd normally use in the office. There are a variety of methods to do this, but the simplest to set up is Chrome Remote Desktop. All that's needed is an installation of the Chrome web browser on the office machines and the home machines of the employees. The setup is painless and will provide an encrypted, direct connection between office PCs and those of homebound workers. For an extra measure of protection and to mitigate the risk that an employee's home network isn't as secure as it should be, a commercial VPN service for the US makes a smart addition to the setup but isn't strictly necessary.
Retooling retail operations
For small businesses that rely on brick-and-mortar retail operations, figuring out a way to continue making sales during a crisis like this isn't an easy task. Depending on the specific restrictions in place in the business's area of operations, switching to limited hours and curbside pickup may be an option, but there's no telling how long such a strategy will hold up as the situation develops. For that reason, small businesses with retail shops should assume they're going to have to do the majority of their business without their location open to customers for the foreseeable future.
The best way to do that is to make a quick pivot to online sales and to set up delivery options to keep products getting to customers. There are a variety of platforms that small businesses can use to get an online store up and running in a hurry, and the right one to use will depend on what products the business is trying to sell. Still, owing to its fast setup time and overall ease of use, Shopify is likely the best option for the vast majority of small businesses in this situation. It offers everything a small business could need to start selling products online right away, including direct shipping and fulfillment options (which are still operating despite the situation) to handle the logistics of getting products where they need to go.
Getting an online storefront running is only the start, though. There's also a need to find ways to repurpose retail employees into useful work to keep them financially secure through the crisis. After all, it does no good to keep selling products if the retail store will have to eventually reopen without any workers to operate it. A smart way to do that is to get set up with a cloud phone service provider so store employees can still handle customer service queries, just as they would in the store. This serves to make sure customers still enjoy the same high level of service they would under normal, less-restricted circumstances.
With so much uncertainty around the world at this time, small businesses need solutions more than ever. Keap is here to help with free daily webinars, a fund to help small businesses, and daily “Office Hours” with experts. https://t.co/3SlZ1M0SQP pic.twitter.com/c18UByTlYG— Keap (@KeapGrowing) April 7, 2020
Securing bridge funding
Even when a small business does everything in its power to keep working to its maximum potential during this crisis, it will likely only slow the depletion of its cash reserves—not stop it. That means there's little option but to seek bridge funding that will keep the business open while it adjusts to the new normal of operating during a pandemic. The only real question is where to find the necessary funding.
On that front, there's quite a bit of help contained in the recently-passed federal stimulus package meant to assure the survival of the nation's small businesses. The increased funding for the SBA's disaster loan program makes it an excellent option for small businesses already facing losses due to the ongoing crisis. Those in a severe cash crunch can even take advantage of the provision for an Emergency Economic Injury Grant, which provides up to $10,000 in funding to qualifying small businesses that will never have to be repaid.
The stimulus package also contains good news for businesses that already have outstanding SBA (non-disaster) loans. It allows the SBA to assume the payment of principal, interest, and fees on those outstanding loans for up to six months. Better still, small businesses can continue to take out non-disaster loans for the next six months and still qualify to have the payments made by the SBA. That means they now have access to up to $5 million in financing and won't owe a dime of repayment for the expected maximum duration of this crisis.
The SBA isn't the only available resource that small businesses can turn to for the funding they need to keep operating. Most states, and even some large corporations, are already operating and expanding grant programs and free service offerings that should provide the average small business with almost anything they could need to ride out the situation, or at least to augment the fruits of their own hard work.
Emerging stronger than ever
Small business owners and operators need to recognize that while the present situation is bad for everyone involved, it doesn't have to spell the end of their entrepreneurial dreams. As the most flexible types of businesses within the economy, small businesses face the steepest uphill climb to survive but also have the greatest ability to make quick, nimble changes to adapt and overcome the challenges they face.
Those that act decisively and take the right steps now should be able to find ways to keep on doing business no matter how the situation develops and should have access to ample financial resources to back up their efforts. In the end, smart and resourceful small business owners stand a decent chance of having their companies emerge from the crisis stronger than they were going into it. That would be a welcome bit of good news for their employees, customers, and themselves. Afterward, everyone will be able to look forward to the day that this all becomes a memory and life can begin to return to some semblance of normalcy.