Has your business fallen on hard times? Many small business owners are faced with a double whammy from the current economic situation. We need to focus on our business survival at the same time as we are worrying about the health and safety of our family and employees.
Some businesses, of course, are benefiting from the pandemic because they sell services or manufacture products that are in high demand. But many small businesses are struggling to survive or are facing serious, ongoing declines in sales and orders that could lead to business failure. This is true for small manufacturers, traditional retailers, and service providers. It’s true whether you own a gym, a restaurant, a car dealership, or a bagel store. And it’s no different whether you operate out of an office building, are an online e-commerce company, or even an online publisher like Business Know-How. (When businesses can’t sell, advertisers don’t advertise.)
The most important advice right now is don’t panic. Yes, that’s easier said than done. But you need to stay calm and logically consider all your options.
Pay attention to the news. You need to know and abide by regulations regarding if or when you can stay open, the percentage of employees you can have working at one time and other regulations put in place by government agencies. Be sure you are reading, watching, or listening to reports from trustworthy, established news or government organizations. The things that Cousin Joey posts on social media may not be accurate.
What can you do when your small business falls on hard times? How can you boost sales and profits? The answer is to be proactive. Here are 28 strategies to consider:
“Take stock. Determine what really needs to be done now,” advises Ann Garbarino, New York State Certified Senior Business Advisor at the Stony Brook Small Business Development Center, located at Stony Brook University, Long Island, NY. “Sit down and give yourself the time to make a plan for what is happening, “ she adds. “Get creative. This is not the time to just throw your hands up. DEAL.”
Reach out to local resources such as Small Business Development Centers, Minority Development Agencies, and SCORE chapters in your area. These organizations provide free assistance for businesses. Their advisors are experienced helping small businesses solve problems and they will be staying on top of resources and developments that will help their communities. “Many things are still unfolding and as we get updates, we will update our clients,” notes Garbarino.
“Talk with your employees and customers and let them know what’s going on,” she urges. Let customers know if you are staying open and if your hours of operation will be changing. Let them know what procedures you have put in place to ensure their safety, or if they might experience delays in getting help; or receiving their orders.
Let employees know if you will need to change their schedules or the nature of the work you’ll need them to do. Let them know if you will be forced to lay off workers or if you will be able to let them (or require that they) work from home. If so, what procedures will they need to follow? Are there any resources you are making available to them such as online collaboration tools, or a secure way to log into their office computer?
Take a cue from car manufacturers and other large companies that are switching over their operations to produce face masks, disinfectants, and other needed supplies. You don’t have to be a big corporation to make changes. In fact, the smaller and leaner your business already is, the faster you can shift gears and zoom back into action.
If you have a catering facility, for instance, consider selling and delivering family meals to consumers. If your hot dishes could be frozen and reheated, or frozen uncooked and then cooked by the customer, offer customers the option to buy several days’ meals that they can store at home and cook as needed.
Consider what your customers need and would buy from you and pivot your operations. If you are a retailer who is able to stay open or sell online, but can’t get inventory or supplies from your regular vendors, ”look for local merchants who might be able to help you meet your needs,” advises Bob Negen, co-founder of WhizBang! Retail Training. “Be a merchandise scavenger. Call your vendors and ask what they do have available. Expand your mix. If you can’t get what you normally sell, what else could you bring in that your customers would buy,” he adds.
Besides looking at the immediate product demands, look at past sales. Were they increasing, staying the same, or declining? If sales were stagnant or declining, use your downtime to consider what changes you’ll need to make when the economy picks up.
Are you selling your products and services online? If not, why not? It's time to get your head out of the sand. Even when people buy in-person or on the basis of personal relationships, they are likely to research the products, company or consultant online before making a decision on what to buy and from whom to buy it. If you have a business, you need a website. The type of website, and what should be on it depends on what you sell.
“If you are not already selling on Facebook, Instagram, or other social media platforms, find out how to and get started now,” urges Garbarino. “Many stores are running out of things and if you have food products or other products and people on social media know you are local, they may buy from you.” If you don’t know how to use social media to sell, look for free classes online and instructions on YouTube, she suggests.
“Throw a social media party just to have fun and get away from the stress/boredom, suggests Negen. “Or try out a conferencing app like Zoom or Google Hangouts where everyone can log in and talk and see each other.” Do demos and point people to your website or, if the audience is local, tell them to call to place an order.
If you have a PayPal business account, send out emails with Buy Now buttons included. Add PayPal Buy Now buttons on your website. For a more robust online sales platform consider using WooCommerce with your WordPress site or setting up an online store on through an e-commerce provider such as Shopify or BigCommerce.
An ever-growing percentage of business people and consumers are reachable electronically via computer, smartphone or tablet for a majority of the day. These people include everyone from teenagers to retirees. The Internet - thus their ability to search for vendors, products, and prices and be notified of deals (as well find the nearest restaurant or gas station) - is no longer limited to their desktop computer. It's on their tablets and smartphones. You need to be accessible by the devices and methods the customers you want to reach prefer.
Even if you’re not in the restaurant business, consider offering pickup or delivery services. Customers might be willing to pick up items if you could provide a way for them to place an order in advance and then deliver their orders to them in their cars. Or, consider doing deliveries. “If customers won’t come and get your merchandise, take it to them! This is a simple strategy that nearly any retailer can add with relatively little difficulty,” advises Negen. “Ask your insurance agent what you need to do if your employees are driving their own cars and delivering for your company.”
Hopefully, you already have a customer mailing list. If you don’t, start building an email list immediately! Use your list to communicate with your customers. Tell them what’s happening with your business. Give them tips on how to use what you sell. Tell them what products you have available. Include coupons, links to buy, and your phone number. If you run a gym, or a physical therapy facility, or other facility consumers can’t visit during the pandemic, give them tips for staying healthy and active until you reopen – and include a coupon for future use.
“Think outside the box,” says Garbarino. “Maybe you and another business can go in together and figure solutions to some problems. Two heads are better than one. Maybe your chamber of commerce or networking group can help.”
Business survival, now, more than ever, depends on knowing your numbers. If sales are falling, you can’t determine how to proceed unless you know what your fixed expenses will be in the coming months, what your discretionary spending is, what your normal sales are for this time period and a realistic guesstimate of how badly sales might fall. Go over your books or sit down with your bookkeeper or accountant and get all the numbers down on paper. If you think you will be applying for any type of loan or funding, gather the bank statements and financial statement the lender will require. Submitting a loan application without them will delay a decision.
The Small Business Administration will be offering low-interest loans through the Economic Injury Disaster Loan Program. Other government and private assistance programs are also being developed. Check out our list of known financial resources to help small businesses. Remember, though, that getting government assistance loans will take some time.
The Internal Revenue Service is also offering some help by allowing individuals, sole proprietors and some businesses to postpone paying income tax they owe for three months this year (2020) without penalty. The deadline for filing the tax return has also been extended for individual tax payers. Details are in this press release from the US Treasury Department: https://home.treasury.gov/news/press-releases/treasury-and-irs-delay-federal-tax-day-from-april-15-to-july-15-due-to-covid-19-outbreak.
If you won’t be able to pay your taxes in full by then, see about working out a payment plan with the IRS. Or, if you won’t be able to pay taxes at all, see this page: https://www.irs.gov/businesses/small-businesses-self-employed/temporarily-delay-the-collection-process.
Get out your business owner insurance policy and see if it includes business interruption insurance. Read the policy closely. If it includes clauses that sound like they won’t pay you for virus-related claims, watch to see if any federal or state legislation gets passed that will require them to pay for losses from due to the current conditions.
Garbarino reminds businesses to “Make sure to keep written records and receipts in case you need validation for a recovery loan.” If your business insurance will provide any relief, you’ll need detailed records to prove your claims, too.
If you’re going to apply for an SBA or any other kind of loan, you’re going to need to produce current and past bank statements and other financial information. Find out what documentation is required before you apply so you can submit it with your loan application. Missing documentation will delay loan decisions.
Some banks, credit card companies, and other lenders are starting to offer payment relief during the crisis. Check with your bank and other creditors to see if they will let you postpone payments without penalty or are offering other relief for small businesses. If you have a mortgage on your home, check to see if the government or your mortgage company will let you put off payments for a few months. In addition to these lenders, check to see if your utility company has any program in place to keep from shutting off the electric and gas for your business or home during the crisis.
If you’re leasing business space, contact your landlord and ask if they will give you a temporary reduction in rent or allow you to defer payments. If you are worried about having to close your business for good, look at the lease agreement you signed to see if there is an “out” clause in it. Such clauses, when they exist, let you get out of the lease without penalty before the term is up if you notify the landlord in advance. The advance notice time is often three months.
If you are canceling business travel, check airlines and hotels for cancellation policies. Some are waiving change fees or giving credits during the crisis even for nonrefundable purchases. Also, if you had purchased nonrefundable airfare, look to see if the airline has rescheduled any of your flights. If so, you might be entitled to a refund or credit you might not otherwise have gotten. (I recently got a full refund on a no-refund fare because the airline had rescheduled the flight.)
“Stay lean and mean,” advises Garbarino. “Being lean may be an asset in recovering more quickly.”
In addition to trying to reduce or postpone rent and loan payments, think about other costs you could reduce or eliminate to avoid business failure. Consider big expenses as well as little ones. Look at your credit card statements for recurring charges you’ve forgotten about such as online subscriptions that you may not be using.
In times like this, you have to be prepared to take cost-cutting actions you’d rather not take. One of them, unfortunately, may be laying off or firing employees or drastically reducing their hours. Your small business employees may seem like “family” (or may actually be family), and if you’re like many small business owners, you know a lot about their daily lives. But if there are few or no customers or sales, unless you have managed to build up a huge emergency fund, as much as it pains you, you’re going to have to make some unpleasant decisions.
If you can keep any employees working, keep those who are most productive and most necessary to your operation. Lay off the less essential workers, and fire those who are unproductive and who, perhaps, you’ve been unhappy with. If you have to layoff employees who you would like to rehire if business picks up, be sure you have current phone numbers and non-work email addresses so you can contact them when you are ready to rehire.
Important: Change passwords and block access to any financial accounts, storefronts, customer data, or other sensitive information before you terminate anyone who has access to such things. It doesn’t matter how nice you think they are; they might use their access to harm you and your business. Even in good times, small businesses are often victims of fraud perpetrated by trusted employees.
Related: Are Employees Stealing from You?
If letting employees work from home works well, and your lease has an out clause or is up for renewal soon, consider whether it’s feasible to cut costs long-term by renting a smaller office or eliminating rented space completely.
If you are a regular customer, talk to vendors about what they can do to help. Will they give you a break on prices? Can they provide anything you’re not ordering now that your customers are asking for? Will they let you delay payments? If you are a good customer (and pay them on time), they may be willing to work with you. If they’re not, start evaluating other vendors. If you can get lower pricing, get product samples or start with small orders to ascertain the quality, delivery and customer service of the new vendor.
If you have a reasonably high volume of credit card sales and you haven’t recently evaluated credit card processing fees, now may be the time to do so. Get quotes from other merchant account providers, and if they are lower, ask your present credit card processing service if they will lower fees to match. If they won’t consider switching. The savings could be significant.
Depending on your situation, you may need to either reduce your advertising and marketing spend, increase it or change where you’re advertising.
If regulations are restricting your sales, you can’t meet demand due to inventory shortages or reduced staffing, or your customers’ aren’t buying because they are staying away from malls and shopping areas, see if you can temporarily reduce or halt advertising. Save your ad dollars for when the economy is poised to recover.
On the other hand, if you are open for business and customers don’t know it, if you’ve had to close your store to walk-in customers but are do have take out or delivery service, or you’ve started selling online, you may need to ramp up your marketing to let your customers know. Be sure to watch your costs and choose the right media to target your customers without wasting money.
If you’re paying for SEO or search marketing help, take a close look at the results you’re getting now and what you were getting before the virus started to wreak havoc on the economy. If you weren’t happy with the results you were getting before the pandemic, this might be a good time to end the relationship. If you had been getting good results, evaluate your current ROI and decide if you should temporarily stop or reduce your spending.
Warning: Don’t let a service provider hold your site hostage! Before you make any changes to service providers, make sure you can log onto your site as the administrator and owner and make changes to who has access to the site. Then, before you tell the service provider their services are no longer needed, delete them as a user or change their password so they can’t delete or damage your site in revenge.
There are dozens of ways you can promote your business without spending a fortune and still reach a very targeted audience. Review strategies that work for other businesses and put them to work for your company. Pay attention to email marketing. It is one of the most cost-effective strategies for getting prospects and customers to remember and buy from you.
Don't assume that a former customer who stopped buying from you in the past will never buy from you again. Customers' needs and circumstances change, just as yours do. The megacorporation that didn't renew your contract a couple of years ago because of changing business priorities may have changed their direction once again and be a good prospect now or when the economy starts to recover. The customer who went with a lower-priced competitor may be dissatisfied with the quality or service and be receptive to a call from you today. Or, the manager who had given the work to his best friend may no longer be with the company when that business reopens their doors.
If a company needs what you sell, there's a good chance their competitors do, too. Industry groups you belong to, trade shows, seminars, and friends in the industry can all help you identify likely prospects. If the people you meet don't need your services, ask if they may in the future or can put you in touch with someone at their company who would be the right contact.
The bigger a business, the slower they are to move. The project that was put on indefinite hold last summer may be urgent this spring. Or, some other project the company is working on may be right up your alley. Or they may need subcontractors to fill in because of new demand or employee illness. The more recently you've contacted a prospect, the more likely they'll be to remember your name - and your phone number - when they are ready to buy.
That's corporate-speak for a concept that's as old as the hills: find more ways to make money. When business and the economy recover (and they will), look for ways to diversify and expand your income sources. For instance, could you add landscaping services or sprinkler installation and repair services to your lawn care business? What about coffee rolls and muffins as choices at your bagel shop? If you started delivery services when people weren’t shopping, would it pay to continue them? If you are a writer whose market is dried up, hone your skills to write content for online courses, video presentations, blog posts, and social media content for businesses. Or, learn to do social media marketing for businesses, and add that service to the writing services you offer.
As you review your business, you may see many areas that require change. The key to making change happen - and rebuilding your profits - is to list what needs to be done and estimate what effect each change will have on cash flow, sales and profits. Then prioritize the list. What are the easiest ways to increase profits the most quickly? What should you be doing on a longer-term basis to ensure your business continues to grow and prosper? Revise your business plan based on your answers, then start to work your plan.