My Advice to Small Businesses For Dealing With The Covid-19 Coronavirus -

The medical experts have stated that the Covid-19 Coronavirus is a virus like none faced by US small business owners in the last hundred years, and it’s clear that we will be dealing with this crisis for the foreseeable future. As someone who has devoted his career to advising small businesses, here are my thoughts for surviving the Covid-19 Coronavirus.

First, take a deep breath and assess your situation. Small business owners and their managers are looked to as leaders by their employees, customers, vendors and others, so business owners and their managers need to educate themselves about what’s going on and communicate their plan regularly with the business’ stakeholders. These stakeholders are looking for honest information and your vision for dealing with the crisis. You can be honest if you don’t know an answer and express your feelings and concerns, but always have some kind of response about what you are trying to do to mitigate risk for the person (or people) to whom you are speaking. So, the first step is to acknowledge your leadership role.

Second, make your personal health and well-being a priority. This should really be number one, because you are no good to others if you don’t take care of yourself. Get plenty of rest, exercise regularly, drink plenty of water, communicate periodically with family members and friends, invest time in learning, and read inspirational quotations you can share with others.

Third, implement your plan for getting through this crisis. In September of last year, I dedicated a broadcast on Bloomberg Talk Radio to disaster planning after the wave of continued natural disasters in the US, and I wrote an article that is on my blog sites that outlines how to create a disaster plan in the event of a crisis. The five-(5) steps of disaster planning we discussed during the broadcast include: (i) prevention, (ii) protection, (iii) mitigation, (iv) response and (v) recovery. 

If you have a written disaster plan and strategic goals & objectives for 2020, it’s time to pull them out and take a pencil to them. If you don’t have a written plan, you should begin creating weekly action plans for each function of your business through the remainder of this crisis, and then monthly along with some longer-term goals & objectives as we emerge from the crisis.

I have broken my advice on planning into four- (4) parts: communications, financial planning, redeploying your employees, and learning from this crisis:

A.  Communications –

-       Your communications to employees, customers, suppliers and other stakeholders should be flexible, follow federal, state & local instructions, be focused on the here & now, and reassure employees without being misleading or dishonest;

-       Promote the Center for Disease Control (CDC) guidelines with respect to social distancing, a clean work environment, and good hygiene;

-       Meet daily with your management team. My preference would be to meet on a visual platform like Zoom, Facebook Live, or Goggle Hangout, as opposed to doing conference calls;

-       Last, your Covid-19 Coronavirus communications plan should include the general information you should be posting for stakeholders about what the company is doing in light of the crisis as well as creative sales, marketing and customer service strategies;

B.  Your Financial Plan –

-       Take stock of your financial situation, resources, access to capital and short- to intermediate-term financial needs;

-       Create a cashflow forecast and track your actual cash inflows and outflows until you have safely emerged from this crisis;

-       Cut back on any unnecessary spending and, if necessary, renegotiate burdensome loans and contracts.

Each of these steps, will help ensure you are in a better position to make good financial decisions.

C.  Redeploy Your Employees -

-       Assign a skeleton crew to work from the office to deal with day-to-day issues, like the mail, shipping, and deposits;

-       Consider having employees work from home, furloughs, and possible layoffs and terminations. Unfortunately, many small business owners are going to be faced with some difficult choices this year;

-       Focus your “idle” employees on special projects, training, and process improvement work, after creating “work from home procedures” that these employees must sign, so they understand your expectations while working from home; 

-       Establish VPN access for these employees along with strong password requirements to avoid a possible cyberattack, and, again, have your employees sign off on this procedure. Because of the potential cost of a cyberattack, there should be significant consequences for not strictly adhering to this policy.

D.  Last, make sure you learn from this experience. 

-       Talk with your employees about what you have learned from this experience, so you are better prepared when faced with the next crisis.

For more planning information, I would recommend downloading the US Chamber of Commerce’s “Coronavirus Toolbox.”

Fourth, if you can, do something that will have a positive impact on small businesses and/or the local community. My grandfather was a small business owner and he believed strongly in this. For example, you can donate perishable inventories, PPE, or pay your bills early. Whether you want to promote these altruistic activities or not is up to you.

Last, take advantage of available federal, state and private resources you need to make it through the crisis. Numerous employer tax credits, disaster loans and income tax deferments in addition to a plethora of private resources are now available to assist small business owners through this crisis.

Several packages have been approved by Congress and recently signed into law by President Trump to help small businesses. The Coronavirus Aid, Relief and Economic Security (“Cares") Act provides significant relief to both individuals and small businesses. For example, the act will be covering small business payrolls and up to 25% of a business’ overhead expenses for a period of eight-(8) weeks. The Cares Act will also be furnishing $1,200 payments as direct deposits to individuals, extending unemployment benefits, waiving early withdrawal fees & raising loan limits on 401Ks, modifying net operating loss rules, increasing interest expense limitations, and providing for free coronavirus testing. Given the scope and breath of the “Cares Act,” business owners might want to google “S.3548 Cares Act” for more details.

“The Families First Coronavirus Response Act” is, furthermore, offsetting mandatory paid sick and paid leave costs for employers with 50 or more employees with an employer tax credit equal to 100% of the benefits paid out. 

The Coronavirus Preparedness and Response Supplemental Appropriations Act is providing $8.3 billion in emergency funding for federal agencies, including $7 billion in disaster assistance loans to assist small businesses impacted by COVID-19 through the Small Business Administration (SBA.) Small business owners should consider these disaster loans as an additional safety net for their company.

The SBA is offering designated US states and territories low-interest federal disaster loans of up to $2 million to help with fixed debts, payroll, accounts payable and additional bills. The interest rate is 3.75% for small businesses (and 2.75% for non-profits.) SBA disaster loan terms will vary but can be as long as 30 years. Businesses with credit available elsewhere will not eligible for these loans.

The SBA is also deferring SBA loans from previous disasters through December 31, 2020; hence, borrowers with past home and business disaster loans do not have to contact the SBA to request deferment.

Taxpayers will, moreover, have an additional 90 days to pay their 2019 taxes. An income tax deferment extends the April 15 deadline for businesses without penalties for 90 days. This gives business owners the chance to use these funds to cover other expenses. 

Tax deferments apply to Federal income tax payments on self-employment income due on April 15, 2020 for the 2019 tax year, and on Federal estimated income tax payments on self-employment income due on April 15, 2020. Keep in mind, however, that you must still file your business income tax returns by April 15.

The Export-Import Bank of the United States (EXIM) has, furthermore, announced relief measures for U.S. exporters and financial institutions that include waivers, deadline extensions, streamlined processing, and flexibility for its customers for an initial period of 30 days (with the possibility of more.)

In addition, some state governments are offering aid packages, especially states with mandatory sick day requirements. Check with your state for more details.

Banks and credit card companies like Wells Fargo, Citi Bank, and Capital One have announced that they will be working with their customers. Citi Bank is also waiving early CD withdrawal penalties. 

In addition to committing to work with customers, JP Morgan Chase and Wells Fargo have also donated millions to help with different public relief efforts.

Facebook said it is offering $100 million in grants to small business and many other businesses -- such as Amazon, Intuit, Yelp, et. al. -- are assisting the small business sector. Government agencies like SBA, SCORE and non-profits, such as the National Federation of Credit Counseling, are offering services to assist small business owners through this crisis. And several high-profile businesspeople like Mark Cuban are also offering relief in the form of business advice.

Last week, the Dallas Morning News published an informal poll of business owners about the impact of the Coronavirus on small businesses. This study revealed that:

-       96% of Small Businesses will be affected by this crisis;

-       75% anticipate lower sales;

-       51% said they can last 0 to 3 months; and 

-       53% of employees can’t telecommute.

Other studies show similar results, and also point to supply chain issues with 33% of business owners. 

The Coronavirus is going to have a significant impact on small business, but governments, publicly-owned and privately-held businesses and others are stepping in and offering several solutions to help small businesses through this crisis. You should stay informed about these opportunities by watching the news, searching the Internet, and talking to your banker, CPA, and other business advisors.

The next few months will be stressful, but those who invest time in planning are going to be in the best position to ride out this crisis. 

About the Author

A nationally recognized small to mid-sized business (SMB) expert, Jim Talerico has consistently ranked among the "top small business consultants followed on Twitter.” With more than thirty - (30) years of diversified business experience, Jim has a solid track record helping thousands of business owners across the US and in Canada tackle tough business problems and improve their organizational performance.

A regular guest on the Price of Business on Bloomberg Talk Radio, Jim’s client success stories have been highlighted in the Wall St Journal, Dallas Business Journal, Chicago Daily Herald, and on MSNBC’s Your Business, and he is regularly quoted in publications like the New York Times, Dallas Morning News, Philadelphia Inquirer, and INC Magazine, in addition to numerous, other industry publications, radio broadcasts, business books, and Internet media.

Jim Talerico is a certified management consultant CMC?, an honor bestowed on only 1% of all consultants worldwide. He is also the founder and CEO of Greater Prairie Business Consulting, Inc. (www.greaterprairiebusinessconsulting.com)

Increase your knowledge of the latest small to mid-sized business (SMB) trends by tuning into Jim’s regular appearances on the Price of Business !

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