Small businesses have endured the wrath of coronavirus more than most other parties. It is possible the majority of small businesses in America will fold during and after the pandemic, giving way to a corporate-dominated economy in which consumers have fewer shopping choices as well as fewer employment opportunities. Indeed, this is a tumultuous time to be a small business owner. However, as detailed below, there is reason for small business owners to have hope.
Do Not Let Your Hard Work Go to Waste
If you are like most small business owners, you have invested years of hard work into building your company. It would be a shame if this hard work were in vain due to a virus emanating from the other side of the world. There is no sense abandoning ship now just because the economy has been temporarily put on pause. It is better to exhaust all possible options in attempt to save your “baby” than give up hope and cede your customer base to greedy corporations with the deep pockets necessary to continue to operate through the pandemic and a possible economic
Apply for the Paycheck Protection Program
According to Scura Law Firm, the Paycheck Protection Program, also known as PPP, is available to small business owners amidst this challenging time. Nearly three-quarters of small business owners have attempted to apply for a piece of the program’s $350 billion. The program provides fully forgivable loans which are better described as grants as the money does not have to be paid back.
Sadly, the National Federation of Independent Business (NFIB) reports merely one-fifth of small business applications for PPP assistance have been approved and fulfilled with the depositing of funds. The majority of those who applied for this federal government pandemic assistance program have been waiting for a response stating the status of their application. However, it is possible the program will be extended and replenished with additional funds as the pandemic continues.
The Economic Injury Disaster Loan Program (EIDL)
Nearly one-half of the country’s small business owners applied for the federal government’s other major loan program dubbed the Economic Injury Disaster Loan or EIDL for short. This program serves up disaster assistance loans for struggling businesses. However, merely 10% of business owners who applied for the EIDL loan actually received the funds in a timely manner from the date of their application. EIDL was funded by the COVID-19 stimulus package passed into law by Congress in the weeks following the outbreak. All in all, the stimulus package contained $2 trillion.
A total of four million companies applied for the nearly $400 billion of EIDL funds available. However, Congress merely dedicated $17 billion for this program. Still, there is reason for hope as Congress and the executive branch are working together to add more funds to the EIDL program, possibly in an ongoing manner until the pandemic ends. The only question is whether small businesses will be able to survive while waiting for these funds. It is possible only the businesses with ample cash reserves will be able to stay the course amidst the pandemic.
Furthermore, businesses with strong online sales have a competitive advantage as they will still be able to sell to customers over the internet throughout the duration of the pandemic that has shuttered traditional brick-and-mortar facilities.
Let’s take a look at what small business owners can do to keep their business alive during the pandemic.
This Is a Time for Creativity
It is often said that necessity is the mother of invention. This means when the times get tough, the most creative people find a way to make money and ultimately survive. Use the pandemic as an opportunity to pivot to online sales or expand your offerings in another manner. Develop a new niche, keep the revenue flowing and your business will survive.
Reduce Your Business Expenses
This is the perfect time to “trim the fat.” Do everything possible to build up your cash reserves. Cut out all those unnecessary expenses ranging from employee retirement contributions to credit cards and other luxuries. Minimize inventory purchases to prevent the continued bleeding of cash and hold on tight.
Shift Your Focus to the Long-Term
Think about how your business will survive or fail across the long haul before making any decisions. Consider how your actions will impact your business’s preparation when the pandemic comes to an end. Remain in communication with staff so they are ready to roll once the economy re-opens.
Bring in as Much Business as Possible
Develop a plan of action and determine how to proceed in the most prudent manner possible. Manage your cash flow, keep the revenue coming in and your company will survive. If necessary, alter your offerings so you have a constant flow of cash that keeps your enterprise afloat until the pandemic ends.
Exhaust all Possible Options Before Making a Decision
This is a time to consider your last resort options. Whether your last resort is tapping into a refinancing of your business, credit cards or a home equity line of credit, it is worth considering in order to build a financial bridge that helps you survive to a happy and financially healthy life after the coronavirus pandemic comes to an end.
It Would Be Wise to Seek Expert Counsel
Countless experts are available to lend a helping hand amidst the coronavirus outbreak. From accountants to business advisers, plenty of professionals are willing to pitch in to keep small businesses operational. Some such professionals even provide web-based assistance to help those with financial challenges avoid bankruptcy.