If your small business falls on hard economic times, you may be faced with sudden and dramatic changes like making cuts to your workforce, considering new markets and business models, or even closing the doors. During disruption, it’s critical for businesses to be agile and adaptive. So instead of calling it quits, try one of these approaches to pivot your business and take advantage of different opportunities to keep your team intact.
Get a PPP Loan
The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll. If you have not received a PPP loan before, First Draw PPP loans may be available to you. These loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. The SBA can forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
The SBA offers free counseling and training events to help you with the Paycheck Protection Program. Learn more here.
*The PPP ends on May 31, 2021.
Temporarily Cut Back on Hours
Another way a small business can save money on business expenses during tough times is by reducing their teams hours. Rather than closing the doors on business or letting talent go, this option is better for small businesses because they can focus on just a few things that are necessary to keep their business going.
In terms of business, you have to also think long term. Once conditions do improve, you have not lost expertise and you will not incur costs to train a new team. We call that a win-win.
Focus on Income Generating Things
With COVID-19 forcing many businesses to modify operations or shut down altogether, leaders and teams have had to get creative with bringing in capital. Finding new and/or honing in on existing revenue streams can be a great way to keep your business afloat in difficult times such as these.
You must ask yourself: Why do you do what you do?
Look at what you do now—your main income producer. How can you do it better and faster and offer a unique solution to the problem presenting itself? Can you decrease price and increase quantity for a short period of time?
Perhaps you tweak the product, target a new audience, use a new marketing channel, develop key partnerships or improve your customer relationships with this main income generator.
During this time, also turn to your team and get their input. They are a great source of knowledge on the day-to-day and behind the scenes, and will more than likely be able to provide you with ideas. Consider turning this into a workplace challenge!
Crisis is the time for businesses to shine. When things are going well in a booming economy, “everyone” seems to be doing well. During an economic downturn is when real leaders stand out.