Being sheltered in place doesn’t mean your business has to close completely and stay with you at home. Here are a few tips that can help you weather the outbreak and stay afloat in these unprecedented times.
1. Renegotiate Payment Terms With Vendors
Your sales are likely to slow down or take a hit in this quarantine. This means reviewing your fixed and operational costs, such as third-party suppliers and software providers. Remove anything that is nonessential for now, then request for a later or staggered payment scheme. This will help manage your cash flow so you can save it for a longer period.
2. Take Advantage of Tax Deferrals
The Internal Revenue Service (IRS) has extended the deadline to file and pay federal income taxes to July 15, 2020. You can defer up to $10 million of federal income tax payments. No need to worry about penalties or interest until this date. Take advantage of this extension. Focus instead on filing your tax return by April 15, a deadline that has not changed amid the circumstances. You’ll be able to refund money that can help you stay afloat during this crisis.
Note that tax filing isn’t the only delay you can take advantage of. The San Francisco Office of the Treasurer & Tax Collector is also deferring the due date for license fees “on behalf of the Department of Public Health, Fire Department, Police Department, Entertainment Commission, and the Office of Cannabis.” Check with your local treasury office if there are any other deferrals that will help you stagger your business spending.
3. Remove Nonessential Costs
Because you’ve reviewed all essential costs, you’ll have a list of nonessential costs. These include travel for work, on-site or event brand activation, and other anti-social distancing marketing. Brick-and-mortar shops are likely not to spend on electricity, water, and other utilities while closed. Office expenses for nonessential businesses are also expected to drastically reduce. Use the money you would’ve spent on these costs on employee care, essential service payments, and a contribution to your emergency fund.
4. Increase Your Credit and Add to Your Liquid Reserves
It won’t hurt to ask your credit card company for a credit line increase. While we don’t recommend dipping into it immediately, it’s good to have when necessary. It’s also good to add whatever you’ve saved from nonessential costs to your liquid reserve.
5. Apply for a Small Interest Business Loan
The US Small Business Administration (SBA) is offering loans at low interest rates. The Disaster Loan Assistance is eligible in states such as California, Arizona, Connecticut, Missouri, and Washington. If you currently have a relationship with an SBA Express Lender, the Express Bridge Loan Pilot Program lets you borrow up to $25,000. It can cushion the hit your business takes from a temporary revenue loss. You can access and apply for both programs online.
6. Look into Grants Offered by Foundations and Companies
As a small business or startup, you probably have yet to break even or earn significant profit. But this may not be possible during the outbreak. Instead, you can apply for cash grants from companies like Amazon and Facebook. Amazon’s Neighborhood Small Business Relief Fund offers cash grants to Seattle’s small businesses. There’s also Facebook’s $100 million grant, which was launched in their Business Resource Hub. Restaurants can check out the James Beard Foundation’s Food and Beverage Industry Relief Fund for independent F&B small businesses.
7. Review Your State Government’s Emergency Resources
Forbes lists several cities and states that are offering new policies and laws to help small businesses. The Small Business Service of New York City is offering a zero interest $75,000 loan to alleviate the incoming profit loss. They’re also offering to cover 40% of your company employees’ payroll cost.
8. Sit Down and Plan With Your Employees
With a lot more down time among employees, sit down—or rather, go online and meet—with them to prioritize what projects can be improved in this period. Is there anything you delayed or put in the back log that’s perfect to launch after the lockdown? How can you make the business more relevant to your consumers? What products should be shelved, and which ones are worth promoting? Involve them in your planning as they’re the best asset you have right now.
9. Stay Open for Essential Services
While retail companies are likely to close shop and migrate online, restaurants and other food services will still need to keep their kitchens open for take-out and delivery orders. Since you’ll be operating outside the dine-in setup, do a test run of when orders peak throughout the day. Limit your operation hours to prep time and taking orders. You also want to pace your staff and mange operational costs.
10. Go Digital With Your Promotions
If you haven’t fully embraced digital marketing, now is the time to transition. While sales are expected to slow down, you can still connect with customers via social media and email. In fact, everyone will probably be glued to their screens so this is the time to establish or sustain a relationship with your customers via Instagram Stories or regular posts on Facebook. Email is also a smart and empathetic way to stay in touch with consumers and keep them virtually informed on your business and service updates.