If you’re a small business owner, the last couple of weeks have been filled with long days, more stress and anxiety, and questions about the future as the country responds to the COVID-19 pandemic.
School closings, mass event cancellations and postponements, and social distancing have challenged small business models across the country, including in Arkansas. How can small businesses respond to obstacles created by COVID-19?
Remain Calm
Jeff Standridge, Ed.D., adjunct instructor of Finance and managing director of the Conductor, said small business clients, customers and employees are looking to the owner for guidance.
“Your attitude and demeanor can make them feel comfortable or worried,” said Standridge. “Your thoughts impact your feelings, your feelings impact your actions, and your actions impact your results.”
Put Yourself in Your Customer’s Shoes: Reach Out!
Business owners should figure out ways to make customers more comfortable in doing business with them in the middle of self-isolation and reduced trips outside the home, said Standridge.
“Before you decide to close for two weeks, look for ways to reduce human contact points within your business,” he said. “If you can serve your customers remotely, you should do it.”
It is important for customers to see care, concern and empathy from businesses, said Standridge.
“It builds trust and loyalty,” he said. “Reduce risks, increase convenience, go above and beyond to meet their physical and emotional needs.”
Reaching out to top customers or clients, asking how they can be helped and informing them of changes your business is making can be helpful.
“Everyone is facing this crisis together, so be transparent about what your business is going through,” said Standridge. “Customers can empathize with brands facing a crisis, as long as you communicate with them properly.”
Doing the Right Thing Now Will Benefit You in the Long Run
The potential for negative press, ill will or loss of business from the general public is possible for the firms and businesses that do nothing or are slow to respond to the crisis, said Parker Woodroof, Ph.D., assistant professor of Marketing.
Whether it is transitioning to online services, reimbursing clients for missed or canceled services or offering gratuities, “being the first small business in the competitive environment gives you a competitive edge and advantage,” said Woodroof.
Go Online
When many stores shuttered in China and workers stayed home in response to COVID-19, Standridge said the savvy business owners shifted their sales strategy to social media, email and phone calls to avoid heavy losses.
“If you’re closing your store, find ways to keep your employees earning a paycheck by reaching out to your clients, selling on social media, putting your email list to good use or using a video tool to reach new leads,” he said.
Keep Your Routine
Things may not seem the same at the moment, but it’s important to keep some semblance of a routine.
Always have coffee with a mentor? Lunch with a fellow small business owner? Keep those appointments, said Vance Lewis, Ph.D., assistant professor of Management, just adapt.
“You can still have those morning coffee chats, greetings, lunches and comradery over the phone or internet just as easily as in-person.”
Plan for Cash Flow Implications & Get Help
Develop and plan for scenarios likely to result in an increase or decrease in demand for your products and services during the outbreak, said Standridge.
“Determine any potential impact on business financials using multiple possible scenarios that affect different product lines or store locations,” he said.
Other strategies that can be implemented include:
- Reduce or eliminate all non-business-critical tasks and expenses.
- Identify essential, revenue-critical employees and make sure they are focused on business-critical tasks.
- If you reduce staffing levels, consider developing rotating work schedules to continue serving clients. Maintain some level of income to as many employees as possible.
- Talk to your bank and suppliers about alternate payment arrangements. Talk to suppliers about extending payables. Talk to your bank about temporary interest-only payment arrangements.
- Eliminate excess inventory to generate cash.
- If the situation calls for it, reach out to your bank about the SBA Economic Injury Disaster Recovery Loan program.
Cynthia Burleson, director of the Center for Insurance & Risk Management, said it could be beneficial for small business owners to consider business income coverage.
“This is nuanced and often misunderstood,” said Burleson. “Owners need to understand their policy to see if they may have the potential for partial help due to loss of income.”
For more information regarding the policy, click here.
Doug Voss, director for the Center for Logistics, Education, Advancement & Research and Scott E. Bennett Arkansas Highway Commission Chair, encouraged small businesses to negotiate payment terms with financial institutions.
“Protect your employees’ health and financial well-being to every extent possible, and avail yourself of state and federal assistance programs,” said Voss.
For more information on programs available to small businesses, click here.
The Conductor provides free, one-on-one virtual consultation for small businesses.
“We work every day to help business owners in Arkansas to get their game plan together if they need guidance or assistance,” said Standridge.
Go to arconductor.org to set up a session.