The coronavirus outbreak has quickly become the primary concern among consumers and business owners alike. While it’s important not to panic, it’s also essential to now begin making reasonable changes at your small business. Doing so will help mitigate the negative effects of Covid-19 and safeguard the financial security of your small business. If you make the right decisions, you can get through the coronavirus pandemic with your small business intact.
Expected Impact of Coronavirus on Small Businesses
Before the coronavirus epidemic eases (and yes, it eventually will), it’s going to change many parts of the economy. It will alter the way people shop, the way inventory makes its way through supply channels, and how small businesses interact with their employees.
The quicker and more effective small businesses are at adapting to changes in the environment, the more likely they are to survive whatever challenges they’re faced with.
Here are some areas in particular where small businesses can expect to see disruptions because of the coronavirus outbreak:
Less foot traffic at brick & mortar stores
First and foremost, this may be the biggest change you see immediately in consumer behavior. Given the nature of coronavirus, consumers are going to be more hesitant to venture out into public places.
If your small business is a restaurant, you could be especially hard hit. If you run a small business in the leisure and hospitality industry, you can expect to see an immediate impact on revenue. These are the very activities that people are going to start avoiding because of coronavirus.
Despite this inevitable change, there are steps your small business can take now to survive the impact. For example, if you operate a restaurant, you can offer carry-out and delivery services. People still have to eat. Let your current customers know about your delivery and carry-out specials. And be sure to advertise these.
If you operate a hotel, casino, or similar facility, be prepared for a short-term drop in the number of customers coming through the door. Customers who do show up will know about the risk from coronavirus. They will expect your business to be taking reasonable steps to combat the spread of Covid-19.
Doctors and scientists have said that coronavirus spreads more easily in large groups. So try to create space between people in your facilities. Don’t let people bunch up into large crowds.
Growth in online and mobile channels
Closely associated with the above issue is the projected increase in e-commerce. Instead of visiting physical locations, people will use the Internet to do their shopping, attend classes, and more.
You should prepare for this change in buying behavior now by developing a website and mobile app (if you don’t already have them) and advertising them. Make sure customers are able to make purchases on these digital platforms.
Prepare now for the expected change in buying habits. Develop a website and a mobile app for your business as soon as possible.
Lack of inventory because of supply chain disruption
Create safety stocks and communicate with suppliers to prevent stoppages. Although using multiple suppliers may create more red tape, working with more than one vendor may be necessary during the coronavirus epidemic.
Drop in consumer confidence
A decrease in buying activity will lower consumer confidence and may push the U.S. economy into a recession. The same may happen in other economies throughout the world, leading to more economic strain. To survive this storm, you may need to cut costs or take out a small business loan.
More small businesses will fail
During the financial crisis of 2008-2009, roughly 10% of small businesses went under. During the coronavirus crisis, the number could be even higher.
Consumer behavior will shift to more online shopping
One of the lessons of the coronavirus outbreak will be the role of public spaces in the spreading of disease. For the first time in history, the Internet provides a second method to shop. Although this transition has already begun, it will increase because of Covid-19.
These changes are inevitable. That’s why you must remember that times of great change are also great opportunities for entrepreneurs.
Take Alibaba as an example. At the height of the SARS epidemic (a type of coronavirus), Jack Ma launched Taobao.com, which would become the largest e-commerce platform in the world.
As the circumstances around your small business change, look for new openings that may generate a profit.
Be optimistic. Observe each change and challenge as an OPPORTUNITY for your small business.
Measures You Can Take to Minimize the Impact of the Coronavirus Crisis on Your Small Business
Making the right adjustments to your small business is key to surviving the coronavirus outbreak. Here are five tips you can begin taking right now:
Managing Your People
You’re going to need to implement safety and health measures at your places of work. Don’t just establish these ordinances and walk away. Be sure to reinforce them. And find creative and fun ways to ensure everyone is on board and following them.
You’re likely to be short-staffed at some point during the Covid-19 epidemic. If the outbreak hits your area hard, it’s inevitable.
Consider offering paid sick days to your staff. If infected employees are afraid to lose income, they may come to work when they should be at home.
Another option is to let your employees work from home during these times if your type of work permits it. Just as more of your customers will be using the Internet, so can your employees.
Establish ways to connect with your staff. WhatsApp and Slack are two mobile apps that teams can use to communicate. This can be the perfect moment to get a virtual phone system for your company as an alternative to a cell phone plan.
Throughout these difficult times, always be transparent with your staff on the changes taking place. They’ll understand and rally behind you.
Managing your Cash
Short-term cash flow could get tight in your business. You may need a small business loan to get through lean times and avoid the impact of cash shortage in your daily operations. That’s a very reasonable measure: don’t be afraid to reach out for external financing when your business is not generating enough cash due to adverse circumstances.
Also, consider renegotiating contracts, including your lease, if you need to. Limit your spending to those projects that are absolutely essential to making money or keeping the lights on.
Make sure you have enough cash in the bank to support at least 6 months of operations with minimal revenue. Consider taking out a bridge loan if you need it.
#What is a Bridge Loan?
It is a business loan that gives you quick access to capital at a critical moment so that you can meet the financial obligations of your business without suffering cash shortage. In other words, it’s a financial “bridge” that allows you to cover your cash flow needs while you wait for long-term funds.
Traditional banks may not be the best choice to obtain financing during times of crisis. Instead, consider a small business loan from Camino Financial as a way to capitalize your business. We offer fast funding, extended terms, and fewer requirements than a traditional bank.
“Hope for the best but plan for the worst.” This piece of advice may come in handy when working with your supply chain. Plan ahead and keep a close eye on your inventory. Try to find local suppliers you can use in a pinch.
Sales & Marketing
Your advertising may need to adapt to a new situation. Review your sales and marketing strategies to address concerns your customers may have. Listen closely to your clientele and try to adapt to their needs.
If You’re Prepared, You’ll Survive the Impact of Coronavirus
Covid-19 isn’t the first virus in the world, and it won’t be the last. As a small business owner, your task is to be prepared for whatever disasters show up in the world. The path you choose to take shouldn’t be one of panic and irrational decision-making. Instead, keep calm and make sound decisions that will help your business weather this storm and even strengthen once the situation normalizes.
At Camino Financial, we remain loyal to our motto: No Business Left Behind. If you need help capitalizing your business during the coronavirus epidemic, we are on your side. Request a quote for a small business loan. You could receive the funds your business needs in just 2 days to start taking the proper measures and adjustments we have covered here. There’s no reason to let Covid-19 take control of your business!