How are small businesses going to survive the Coronavirus crisis?

[needvaca]

I helped some small and medium businesses through the last recession and my advice is don’t delay in making hard cost cutting decisions.

On an individual level, most of us are old enough to have been adults through the last 2-3 recessions. We should have learned from them. Cut spending, limit debt, beef up your emergency savings, don’t be overweighted in the stock market(but also don’t panic sell). Recessions come for different reasons, but it all comes down to a contracting economy, and this is the beginning of one. We’ve had a great 10+ year run

 

[goaliedave]

Lots of excellent thoughts and advice here. I'm a (sort of retired) CPA who provides accounting, tax, insurance, investments, etc. Quickbooks Online ProAdvisor both sides of the border. If free accounting will help with cash flow lmk I'm happy to do it free and provide sw at my cost, half price.

Sent from my SM-A505G using Tapatalk

 

[Brett]

I only have a few months of cash flow. I would not take out a loan to stay afloat as that would be worse for me in the long run. If I run out of cash, I need to lay everyone off. I also need to save some of my cash to pay a year’s rent as well as all the business expenses I would still have even though no revenue is coming in. This is catastrophic for my small business and my employees. The employees are not used to me having any financial problems since I have managed the business very well for the past 10 years. They are going to be in for a shock when they find out.

I think you'll need more than two months cash flow or some source of funding
Most economists now believe the economy will "contract" for several quarters which implies a coming recession
https://www.nytimes.com/2020/03/15/...tion=click&module=Top Stories&pgtype=Homepage

 

[Timeshare Von]

I am deeply concerned for our bowling center members (mostly small family businesses). Our national trade association (Bowling Proprietors' Association of America) has done a great job in preparing guidance, messaging and training for our members as they all face COVID-19.

Locally, one of our members got some nice airplay on their local news yesterday, with this short story played at 6p & 10p.

So I encourage everyone to save a business . . . and GO BOWLING!

 

[presley]

We own a small business, too. We only have 3 employees, one who has only worked about 8 weeks, needed to take 6 weeks off for a medical thing so she is safely at home. Another was just hired a couple days ago. I am not concerned at all about having to lay them off. It's just bad timing. I feel differently about the one who has been with us longer.

Things are going to change drastically for us, no doubt. I am not worried at all, though. It will just be a new chapter and we will creatively come up with something to survive. We always do.

 

[JeffC]

I'd echo the comments that others have made to begin to cut costs NOW. I'm not sure what your exact business is but it sounds like labor and rents are your main costs. To begin with level with your employees ASAP about the situation. I'm assuming that they can see the cliff that your revenue just went over. Laying them off will make them all eligible for unemployment benefits, if things pickup you can then hire them back as needed. Look into finding less expensive space before your lease runs out. Even if you don't move you can use it as leverage when negotiating a new lease. Keep in mind that the end of the health crisis doesn't guarantee the end of the economic crisis. While the severity of the virus will dictate the economic damage the recovery may take longer. Once an economy goes into a recession you may have to wait months or years for the recovery. The advantage that small businesses have is the ability to act quickly in these types of situations. You can cut down to a one person operation and weather the storm. It may sound cold but at the end of the day your main responsibility is to yourself. I ran my own business for 34 years, just sold it last week. We survived the early nineties recession; which was more like a depression locally and the Great Recession of 2008. No telling how bad this one will be. Best of luck to you.

 

[klpca]

Another idea that could possibly help small business owners with cash flow would be to promote gift certificates that could be redeemed after this is all over. I realize that this will only work with certain types of businesses, but there are people out there who will absolutely support a local business this way. I am specifically thinking of local retailers and restaurants.

 

[Passepartout]

The sad truth is that many local small businesses won't survive. Some can convert to home delivery outlets, cut employee hours, retrain, offer future services to loyal customers, switch to online. But some simply can't and will close. Our son in Seattle-land near the epicenter of where several deaths have occurred, has said that dozens of restaurants there are posting and publishing in the newspaper, 'Thanks for XX years, but we're closing for good.' I'm sorry. This pandemic will make 9/11 and no planes flying for a few weeks, seem like child's play. The world economy is at deep risk until a vaccine and effective treatment are discovered, tested and widely distributed. For now, circle the wagons, stay in, be defensive, avoid groups, wash your hands. conserve resources, listen to health professionals, not politicians.

Jim

 

[dsmrp]

I heard recently about NYC closing all restaurants and another about no gatherings over 50. The WA state governor just announced similar measures for entire state and limiting gatherings to 50.. No dining in, but take-out allowed.

 

[Passepartout]

CDC is urging no gatherings for 8 WEEKS! So much for 14 day's self-quarantine! Hope my neighborhood brew-pub has home delivery!

 

[VacationForever]

So many people will be hurting for money. Tulsi Gabbard is now calling to give $1K a month to every adult to tie people through the coronavirus crisis so that people who are hurting for money can have something.

 

[TravelTime]

I did not think it could get worse but it is.

 

[klpca]

The sad truth is that many local small businesses won't survive. Some can convert to home delivery outlets, cut employee hours, retrain, offer future services to loyal customers, switch to online. But some simply can't and will close. Our son in Seattle-land near the epicenter of where several deaths have occurred, has said that dozens of restaurants there are posting and publishing in the newspaper, 'Thanks for XX years, but we're closing for good.' I'm sorry. This pandemic will make 9/11 and no planes flying for a few weeks, seem like child's play. The world economy is at deep risk until a vaccine and effective treatment are discovered, tested and widely distributed. For now, circle the wagons, stay in, be defensive, avoid groups, wash your hands. conserve resources, listen to health professionals, not politicians.

Jim

My daughter runs a summer camp and her boyfriend works at a local outdoor retailer. They are both sweating bullets. Our other daughter works in luxury jewelry. No one feels good about anything at this point. Of course, my husband is an engineer whose company *refuses* to let employees work from home despite the fact that it could be easily done. My job is also quite insulated from this issue - we work in a two person office that works with clients who are not much affected financially. It's a tale of two worlds in our house.

 

[b2bailey]

My daughter runs a summer camp and her boyfriend works at a local outdoor retailer. They are both sweating bullets. Our other daughter works in luxury jewelry. No one feels good about anything at this point. Of course, my husband is an engineer whose company *refuses* to let employees work from home despite the fact that it could be easily done. My job is also quite insulated from this issue - we work in a two person office that works with high net worth individuals. I am certain that they are good to go for the rest of their lives. It's a tale of two worlds in our house.

I'm the bright side, I'm hoping the worst is over by June. Parents will be tired of having their kids at home, so will send them off to camp ASAP.

 

[CO skier]

Yes, I agree completely. Economic hardship is also bad for one’s mental and physical health so it might be as bad as getting sick from the virus. Most people who get the virus will be asymptomatic or have mild symptoms. But I think many more will be devastated financially. The burden of the financial downturn will be borne by those least able to handle it. I am not sure that the government’s plan that they unveiled this weekend is the right solution. For example, I think that the government should directly fund paid sick leave rather than offer through tax credit. What good is paid sick leave or a tax credit if small businesses do not have cash flow. In my business, I could lay everyone off to survive this crisis but that is hurting 9 employees’ livelihoods. I have 8 revenue generating employees and one administrative assistant who probably could not find another job quickly if this crisis gets worse.

Sadly, this is the other side of the epidemiological analysis that no one on the media is talking about -- the devastating effects of one-sided (epidemic) government policy with no regard to the much higher economic impacts.

 

[Brett]

I did not think it could get worse but it is.

unfortunately yes, - hope it won't be worse than 2008

from today's WSJ

 

[pedro47]

To the OP......The average small business needs a steady cash flow to survive IMO. I wish you hope and pray over the next seven (7) weeks.

 

[pedro47]

Maybe start calling for leads. In the last crash I started calling every one we had worked for asking specifically for their business or a lead. Once the leads started rolling so did the jobs. The man who started me in business told me people want to be asked for their business. I'm sure you will figure it out. Good Luck

Bill

I agree with this comment 110% “ people want to be asked for their business.”
I would call everyone that you have every done business with from day one and just say . I was thanking about you and go on from their.

 

[geekette]

As I understand it, Congress is not done with relief bills, the one to be voted on today is the second one. It's not clear that either gig workers or small businesses are addressed in this one, and we know big companies weren't.

The best I can offer right now, is to be sure to contact your federal house rep, that's where the bills originate and by their response you might find out that small business/sole proprietor/self employed relief is coming. I know that I always get a response back when I send email. Not fast, but it happens.

Do same with your state reps. It's hard to know what different states are doing to support their businesses, but you might see legislation happening. My state posts proposed bills. There could be a public input session that you could be a part of.

 

[caribbeanqueen]

I am deeply concerned for our bowling center members (mostly small family businesses). Our national trade association (Bowling Proprietors' Association of America) has done a great job in preparing guidance, messaging and training for our members as they all face COVID-19.

Locally, one of our members got some nice airplay on their local news yesterday, with this short story played at 6p & 10p.

So I encourage everyone to save a business . . . and GO BOWLING!

@Timeshare Von My husband owns two bowling centers! We have been on vacation/taking care of my parents and are flying home tonight. Things are very bad back home. The town is trying to shut down businesses and telling everyone to stay home. Luckily some people are still bowling...for now. We keep them as far apart as possible. I feel for each and every business owner here who is facing this very scary crisis. None of us knows what the future holds for us. We do not have enough money to pay our employees (over 70 in one center-we also have a coffee shop and lounge that serve dinners) when we end up shutting down and fear for them as well. We never imagined such a scenario. We have a large overhead (just 8k in electric per month) so have very little in reserves. I think, eventually the states will all follow suit with no businesses open except grocery, pharmacy and gas stations. My husband gets upset at people's reaction to wanting all businesses closed in our town but I understand this. People do not understand though the frightening reality for business owners, they just do not get it. Thinking of all of you and praying this too shall pass.

 

[caribbeanqueen]

Update: Governor telling restaurants no inside dining and no more than 25 people in a building. All restaurants will be closing except maybe places like McDonalds. We are closing both places after tonight for who knows how long? Things are changing hourly. My dentist cancelled my appointment to get my broken tooth fixed. I am scheduled for shoulder surgery at a surgi center the 25th. I called them Friday and they said my surgery was still on. That could change tomorrow. I notice Florida is not as crazy yet as back home but that can change so fast. We fly home tonight. Glad we went to Disney when we did.

 

[clifffaith]

Cliff’s dentist confirmed his appt to get a permanent crown installed tomorrow, but I saw a doctor on CNN reccomnding dental hygienists not be working.

 

[TravelTime]

SF Bay Area is under a Shelter in Place restriction for the next 3 weeks. I am in the process of shutting down my office and seeing how many clients will move to video meetings.

 

[geist1223]

The Governor of Oregon has ordered all restaurants closed except for take out and delivery. Actually many restaurant owners were asking the Governor for this Order. Their Insurance did not kick in unless they Government Ordered the Restaurants to close.

 

[TravelTime]

I just read that in addition to 2 weeks of sick pay, small businesses are also liable for 3 months of family/sick leave. I will need to apply for the exemption as soon as possible because I think all my employees will be eligible for this. If I don't get the exemption, then I will need to lay everyone off to survive. This bill is devastating to small businesses.

https://www.washingtonpost.com/business/2020/03/16/paid-sick-leave-coronavirus-house-bill/