OK, this is the strangest, most shocking, mind-blowing experience in recent history. The last person who could remember a plague like the Coronavirus was my grandmother and she’s been deceased for 50 years.
File this under “Desperate Times Call for Desperate Measures.” That phrase, probably originating in Latin as “extremis malis extrema remedia,” appeared in print as early as 1596. This isn’t humanity’s first rodeo.
You Need a Strategy
Look at it this way. This pandemic is like a forest fire. Lots of weak competitors have been siphoning off small or even large numbers of your customers in the marketplace. This is going to be a test of your ability to hunker down and survive until it blows over when you can pop back up and thrive. The ONLY thing that counts is survival.
You may want to take care of your employees. You probably have debts you would like to pay. You had plans to grow. A brand you’ve laboriously built over time needs protection. Sales were in the pipeline. You were proud of your great credit score. Now, all that has come to a screeching halt. Like Rod Serling used to say, you’re entering the Twilight Zone, or for our purposes the Unknown Zone. (Cue creepy music)
All the above needs to be temporarily stopped until we can figure out where this is going. If you want to survive, which should be your only priority, you probably will need to compromise some of your values. Owning a business means making hard decisions. A strategic retreat means you live to fight another day. Perhaps this business planning software will help.
CASH IS KING
Admittedly I’m writing this from the small, micro-entrepreneurial perspective. Most of these enterprises don’t have much in the way of reserves. Call it selfish. Call it immoral. Call it self-interested. I don’t care what you call it. The driving principle is that if you go under, no matter your well-meaning impulses, nobody will benefit. So…
- Conserve Your Cash
Spend money only on what is absolutely critical to surviving. Make a list of your priorities. This could last a lot longer than you expect and you need to be a pinchpenny. You can always rebuild your credit later, catch up on payments to vendors and rehire employees.
- Get Really Clear on Need vs Want
Yes, you like that magazine, but do you need it right now? When was the last time you used your newspaper subscription? Think back to when you started your business and had to determine what was critical as opposed to what you could do without. Bring back that thinking.
- Kill the Ants That are Nibbling You to Death
Go through your P&L and dig down in your expenses. You’re not going to discover any one big thing you can stop spending precious cash on. You’re more likely to discover 10 little things you can kill off. We all pick up little (frequently monthly) expenditures that sneak through unnoticed, but they add up. A short call to GoDaddy.com showed me how my spending with them had gotten out of control. It all sounded critical at the time I took it on, but now some difficult decisions to jettison certain services, domains, and emails had to be made. I can always pick them back up later when things are better.
COMMUNICATE, COMMUNICATE, COMMUNICATE
Things are happening so quickly that it is difficult to say exactly what will be happening by the time you read this. The important thing is to keep in communication with customers, creditors, and employees you had to let go.
Be sure to let customers know you will be back or you’re there to help them FOR FREE if they need you. This is a prime opportunity to build customer loyalty. Send out a press release on how you’re helping…the media is hungry for that kind of info.
What You Can Do Right Now
- Call Your Mortgage Lender and Ask for a Suspension
Fortune says “Mortgage giants Fannie Mae and Freddie Mac both have ordered lenders to be more flexible with borrowers, reducing or suspending payments for up to 12 months. A better bet is to request a mortgage modification. This enables you to skip payments for a set period, then pay them back in a variety of different ways. Foreclosure sales and evictions have been halted and delinquent payments will not be reported to the credit bureau.” If you rent space, call your landlord and negotiate with her/him. Be nice. This person may also be cash strapped.
- Get in Touch with Your Tax Advisor
See if you qualify for Earned Income Tax Credit (EITC) The Earned Income Tax Credit, EITC or EIC, is a benefit for working people, including small business owners, with low to moderate income. Go to the IRS website for a surprisingly easy to understand explanation at https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit
- Get on The Phone and Call Your Creditors
Many of them understand the circumstances and have emergency policies available. Can you get a forbearance on that loan? Negotiate a lower interest rate? Would you rather feed the kids or pay your credit cards? My bet is that dings to your credit score will be forgivable once the storm passes.
- Go After Any Receivables
We all hate doing this, but some small businesses have thousands of dollars outstanding because they have avoided this task. Offer any customer, client, or patient who pays up NOW a sweet deal. And, I mean an offer they can’t refuse. Something they would be stupid to turn down. If they don’t pay now, you will be back and go after the full amount.
- Look for Random, Popup “Private” Responses to Help Small Businesses
Facebook is offering $100M cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries. They are meant to
1. Keep Your Workforce Going
2. Help with Rent
3. Connect with Customers
4. Cover Operational Costs
Eligibility is currently undetermined but you should go to https://www.facebook.com/business/boost/grants and sign up for updates.
- Get Creative
This might be the time to move to more online sales or communication tools. You could offer workshops on Zoom.com, open an Etsy store, or write informative booklets on https://simplebooklet.com/. (I love Simplebooklet, and you can look at one of mine called Selling for People Who Don’t Like Selling at https://simplebooklet.com/sellingforpeoplewhodontlikeselling
- Look for an Appropriate Loan
I really don’t like this idea because it means taking on a debt load that may cripple you once you get back on your feet. Explore Fintech disruptive business models that include peer to peer lending and small ticket loans. Fintech is the term used to refer to innovations in the financial and technology crossover space, and typically refers to services that use technology to provide financial services to businesses. Go here for more info- https://www.boardofinnovation.com/blog/10-innovative-fintech-business-models/
- Take a Temporary Job
A zillion places are hiring. Amazon, Walmart, all the grocery and drug stores are looking for people. Nothing to be ashamed of. You can do both…be an entrepreneur and employee at the same time.
There are many websites cranking up right now to give you direction, suggestions, and support. Everyone is thinking up ways to help. Hang on and never give up.
Vicki Garcia is the Co-Founder of Operation Vetrepreneur & President of Marketing Impressions, a 30+ -year- old marketing consulting firm.
Apply to join Operation Vetrepreneur’s FREE Think Tank Groups or one-on-one mentoring at www.veteransinbiz.com.