Question: With no clear idea when the current pandemic will end, what must a small business do to survive?
Answer: As the saying goes “this too shall pass.” But for many, it can’t come too soon. There are always winners and losers in any situation and for some this pandemic has been a godsend. Online sellers, delivery and cleaning services, grocery stores and virtual conferencing are all experiencing increased demand.
However, many in the travel and entertainment industry, restaurants, and brick & mortar retail stores are in danger of going out of business unless they find ways to reinvent their business models.
To begin, you must assess where you are at present financially. How much working capital do you have on hand and what are your known expenses for the next six to nine months? If there will be a shortfall, consider your options.
Take a hard look at all expense items. Determine those than can be eliminated entirely and try to negotiate better terms on the others. The single biggest expense item is usually payroll. If you do not want to let your people go, consider reducing their hours until business picks up again. Hopefully, you have a bank line of credit in place.
There is only so much you can do on the expense side, so now is the time to revisit your business and marketing plan. The one expense you should not cut back on is marketing. Your competitors are having to deal with the same problems, so check out their websites to determine their plan of attack.
Assess your strengths and weaknesses. Get in touch with your valued customers to determine their critical needs. If you offer multiple products and services, determine which are in demand, generate the most profit, and focus your energies on increasing your market share.
As you take these steps to recovery be sure to track their progress. If you have borrowed money to whether this pandemic, you surely do not want to waste time on anything that is not producing a profit.
View Covid-19 as a learning experience. As an example, if your employees have been working from home, it just may be something you want to consider going forward. The more creative thinking you can do to prepare for the next unexpected setback, the better.
Gray Poehler is a volunteer with SCORE Naples. Business counseling on this and other business matters is available, without charge, from the Naples Chapter of SCORE. Call (239) 430-0081 or visit https://naples.score.org/mentors .The SCORE business office is located at 900 Goodlette Road North, in the Fifth Third branch bank building. Office hours are 9 a.m. to noon, Monday through Friday.