How Small Businesses Need to Survive the Coronavirus Crisis

Corona virus continues to spread like wild fire in the whole world. Amid this scary scenario, the worst-scared are the small businesses. They just have one plea to make to their respective governments – save us from closing down.

It’s true. Most small businesses operate literally paycheck to paycheck. They have minimal or no savings at times. Their business thrives only temporarily, sometimes seasonally. They primarily sustain on daily cash inflow which means daily incoming customers. In the current times, the number of customers has dwindled and as more people prefer to stay home, most small businesses have entirely shut down.

This isn’t good news at all because the longer the situation continues, these businesses could literally collapse. In the wake of this looming scare, is there anything to pick them up?

What to Do in Small Business Financial Crisis

We’re well aware of the situation now. Small shops and businesses like bars, restaurants, beauty salons, and the like depend on daily cashflow to meet their expenses. Whatever they make gets expended on paying bills, salaries, inventory, etc. In tough times, they fail to meet up even these expenses too, let alone save or enjoy any profits at all.

To make matters worse is another cruel reality – small businesses face greater credit constraints than large, successful enterprises. With lower loan repayment ability, they even find it difficult to secure loan help from banks/other credit institutions. So the big question: what do they do now. Economic experts suggest the following measures to be taken immediately to prevent upcoming small business financial crisis.

Apply for SBA loans:

Small Business Administration (SBA) loans are meant to aid small businesses in financing their essential business needs. It’s partially guaranteed by the government and therefore frees the credit lender somewhat of the risk involved. Experts say this is the time to apply for these loans in addition to the disaster relief already being provided by state governments.

Be creative in your marketing:

It wouldn’t have mattered so much earlier but your presence online would make a hell of a difference now. If you aren’t already on social media, come today. Interact with your existing permanent customers, assure them of your resumption of services soon. If you can, look for alternative productive ways of resuming service – home delivery, home services, gate pick-ups, etc. Just anything that can help you keep reaching your customers in this difficult time.

Stick together:

If you have employees, make sure you keep them comfortable. Laying them off isn’t the solution, remind them that you’re in it together and this shall pass. Make short-term meaningful decisions, subject to uninformed change. Take one step one day at a time.

Appeal for extensions:

Ask the landlord to extend rent-payment time and likewise, other businesses you interact with for your daily operations. Assure them that when you have access to cash, you’d pay them all.

It’s difficult but not impossible. Right steps at the right time can help you pick yourself up and move on.