Small Business Blog – How to Navigate Crisis using Leadership and Durability

The Virus Crisis continues. In March we were told it would be a two-month shutdown. Here we are, two months later and consumers are not consuming. A month ago, they said that 60,000 people in the US would die. More than 108,000 Americans have died. Today there are 20,000 new cases and 1,000 deaths. Whether a city is “Open” or “Closed”, it is clear that people are not flocking to stores or other businesses. If you own a small business like I do, you need to set an expectation. How long does Small Business have to hold out?

The old Normal will never return

If you define normal as the day when parking lots and offices are full, when people are sitting in restaurants, and where face masks are in the past, then we will never get there. The world is changing in permanent ways. In my business, we have dropped our land-line business phones, moved nearly all our mail to online payments, and upgraded our staff home workspaces with business chairs, desks, headsets and related office style equipment. Magnify these changes by thousands of small businesses, and as the crisis moves from months to years, you can see that there is no going back. Now, we must learn to run our businesses for a different sort of “normal”.

This week, protests and social instability got added to the mix. These were always part of the mix, but suddenly they went from background to foreground. Who knew that ensuring the safety of my staff could become a hot political issue with customers? Innocent statements about human relations can have dire business consequences. An entrepreneur must now be a PR manager, a health manager, and a procurer of medical supplies. A simple office purchase of hand sanitizer has become a month-long ordeal.

Leadership

Some people crave leadership roles. However, they may be poor small business owners. The best entrepreneurs are often those with an expertise and a passion in a specific skill set, that they can market to customers. As they become entrepreneurs, they suddenly get a side-line job as leaders. We cannot skip this part of our job. It is neither our passion nor our expertise, but it is an essential part of the package. We must lead our staff and our customers, set expectations, deliver according to those expectations, and take responsibility if expectations are not met. We must carry this in our products, our services and our ethical standards.

Durability

For small business durability comes from frugal spending combined with generous customer skills. Our customers are the sole source of revenue. We can keep that source active by providing effective service and valuable products. When the customer saves money and gains satisfaction, they will happily recommend us. Frugal spending means monitoring all financial transactions to ensure they are the lowest required. Until there is profit, there is no room for luxury or glamor.

Ethics

When you look at the most hated corporations; Facebook, Comcast, Microsoft, and Wells Fargo, it is easy to see what is in common. Each of these companies use their market position to push individuals, without choice, into transactions with poor value. Facebook sells your private info, losing control of it, then taking no responsibility. Comcast raises their rates to provide dwindling content. Microsoft forces risky updates to give you features you do not want.

Free software and services is not the answer. The world is full of unsupported free software that never really works. Free computer service has value only if you do not value your time.

The ethical road is to travel between these two boundaries. Create value relationships with people willing to pay for that value. Make your service and product clear, with a clear price and generous refund and upgrade policy. Then you will be rewarded by loyal customers who will recommend your business.

Summary

My county will move to Phase 1 in a couple weeks and Phase 2 in about a month. But the Covid crisis will be with us through the Summer and beyond. Over time, virus will be less of a factor as social and economic trends grow in the looming election cycle. A new social and economic order will arise over time, and we cannot predict what it will look like.

Small Businesses who tap on Leadership and Durability will manage to retain customers and staff ready to grow into the next economic cycle.

3 New Revenue Sources for Small Business in the CARES Act

We are all hurting now. The normal ebb and flow of business in America has been throttled by stay at home orders. Even if you do not own a restaurant or bar, even if all your workers can work remotely, you are probably highly impacted by frightened customers and small business. This is a huge blow to ego and self esteem.  It becomes hard to concentrate. Everything seems like an emergency.

I have been greatly relieved by the thought that the CARES Act that passed last week will assist us in ways that are worthwhile.  Here are a few things I’ve found that can benefit CompanionLink, our vendors, friends and relatives during this troubled time.

Pandemic Unemployment Insurance

A new category of Unemployment Benefits has been created to help Self-Employed and Gig workers. These new benefits are handled through your state.  If you are Self Employed and have reduced business because of the Stay at Home order, or even if you are too concerned to go to work, you qualify for this benefit.  Apply for Unemployment through the state.  Even if the weekly amount is small, because your income is low, you will be eligible for the $600 additional weekly benefit (roughly $2400 per month) through July 31, 2020.  So for four months, roughly $12,000 will flow to everyone who is unemployed. This benefit is taxable income so be sure to calculate your withholdings. 

I would guess that this benefit will be extended as long as the Lock Downs continue, which may run through the end of the year.

https://www.cnn.com/2020/03/25/politics/senate-stimulus-unemployment-benefits-coronavirus/index.html

Paycheck Protection Program

The Paycheck Protection Program from the US Small Business Administration will guarantee a loan to your business, and after a time, will forgive up to 100% of the loan amount. 

This program is extended to Nonprofit and other types of business that do not normally qualify for SBA loans. You do not need to be turned down for credit to be eligible for the loan. 

The loan amount is 2.5 times your monthly payroll, benefits and rent.  After 60 days, if you spent this money on payroll, benefits and rent, then the amount is forgiven. Here is the best part; the loan forgivance portion is not considered taxable income to your business.  This program is administered by your local bank provided they are an SBA lender.  Call your bank for details.  Note:  The application forms have not been created yet, and full details are not yet available. Your bank will help you through this process.

https://www.sba.gov/funding-programs/loans/paycheck-protection-program

Google and Facebook Advertising Credits

Both Google and Facebook have announced Small Business grants, and/or advertising credit.  For Google, the advertising credit is automatic and will be added to your Google Ads account.  For Facebook you need to apply, and details have not been sent yet.  Keep an eye out for similar credts from Apple, Amazon, and other large vendors.

https://blog.google/inside-google/company-announcements/commitment-support-small-businesses-and-crisis-response-covid-19

https://www.facebook.com/business/boost/grants