By BFC Funding
Accounting for upwards of 90% of the US economy, it is no stretch to say that the health of small businesses is vitally important to how well we recover as a nation from the financial crisis caused by the COVID-19 pandemic. Seems each day we increase in our understanding of what options are available to help businesses find relief, and at some point small (and large) businesses need to lock in and make the switch from survival to recovery mode.
We pulled together some tips to help small businesses overcome today’s pandemic-related challenges and make that switch from not only survival to recovery mode, but also help speed up the process along the way.
Tip 1: Count Your Losses
Be honest about how the current economic crisis has affected your business and determine just how different your future will be from your past. It’s possible that some of the cost-cutting measures you’ve taken will be permanent, which for better or for worse, will affect your future profit margins.
Tip 2: Reassess Your Business Structure
Once you’ve determined what areas of your business were the most affected, it’s likely time you need to make adjustments to how your business is run. Case in point, having some, many or even all your employees working from home (if possible). If you reduce your on-site workforce team, you may not need such a large office. Conversely, you may have to invest in better teleconferencing tools to be better prepared for a new era in how businesses operate.
Tip 3: Explore Your Funding Options
Not all businesses have large amounts of cash on hand to weather a crisis that lasts several weeks or months. During the pandemic however, there have been several options for small businesses to consider, with the Small Business Administration (SBA) offering programs such as the Paycheck Protection Program and Economic Injury Disaster Loans. However, funding for both are limited. For this reason, small business owners ought to consider:
- SBA 504 loans (call us to learn more!)
- Traditional SBA 7(a) loans and microloans
- Small business term loans from banks, credit unions and online lenders
- Business lines of credit
- Business credit cards
- Vendor tradelines
- Accounts receivable financing
- Merchant cash advances
- Inventory financing
- Purchase order financing
- Equipment financing
Tip 4: Re-Invest In Your Business
We get the contradiction, here. But if you are able to procure funding to operate your business, you may need to rehire employees, buy or sell real estate/machinery and so on. Carefully consider what parts of your business will need investments and don’t be hesitant to re-invest, re-build and re-emerge stronger and more efficient than before.
Tip 5: Look Ahead & Prepare
We all hope that the COVID-19 crisis remains a once-in-a-lifetime event, but that doesn’t mean you shouldn’t prepare and build contingencies should an event like this happen again. Using what you’ve learned so far, you can better prepare for the next crisis.