Financial expert Lysa Davis teaches small business owners what they can do to sustain until the economy starts to rev back up.
COVID-19 halted America’s economy in a way that has never happened. Not since the Great Depression have we seen unemployment reach record highs, consumer confidence at all-time lows and millions of small businesses forced to close, with many more facing restructuring, dissolution and bankruptcy.
Complaints were unbridled as Black business owners were denied assistance from the Paycheck Protection Program, a loan program established by the CARES Act intended to provide small businesses with cash flow through 100% federally guaranteed loans. Black businesses were denied for varied reasons from not having supporting documentation, to not understanding the application process, to not having employees – or simply for not knowing where to go to apply.
Owners spend the majority of their time building their businesses, generating revenue and investing it back into their companies. Being a small business owner is a roller coaster ride of ups and downs, and hard work. They borrow money from friends and family when sales are slow. If they need to hire help, they opt for independent contractors versus full- or part-time employees to save money.
A closure of any length of time can jeopardize everything they have worked for, so what can Detroit-area small businesses do to sustain until the economy is reopened?
Use this time to plan.
Schedule meetings with your team. All small business owners should have a banker, accountant, bookkeeper, business consultant, insurance agent, and a social media and brand development expert. Update your website, social media pages and important paperwork. Get professional advice on the next steps you should take to sustain your business now and in the future. If you do not have a professional team, start building those relationships today.
Get creative. How can you deliver your product or services in a unique way? Create kits for clients to grab and go. Plan virtual events to share tips or offer a Q&A session. Create a YouTube channel teaching DIY techniques. Be open to change. Business models from the past may not work in the future. Incorporate “serving” into your “selling” model. Current and future customers want to know that you care, they can trust you and that you are deeply concerned with meeting their needs.
Reach out to organizations like Detroit SCORE, Detroit Economic Growth Corporation or the Detroit Regional Chamber to get up-to-date information on grants, loans, mentorship, and other free resources and special programs for small businesses. And connect with your peers virtually. Schedule Zoom meetings to share stories and learn what they’re doing to maintain through the pandemic. Offer support, or if you need support, ask.
Take the time to build out a financial model to analyze where your finances are currently and where you need them to be in the future. Evaluate what products and services you can offer at a discounted rate to move inventory and generate revenue. If your sales have slowed significantly, your balance sheet will tell you where your assets and liabilities are so that you can make budgetary changes.
Develop your reopening strategy.
Start creating a strategic, authentic and transparent plan for reopening your business. Email your clients weekly to:
- Share the steps you are taking to ensure their safety.
- Create a short survey asking your clients what they want and need from you.
- Update your clients about any policy changes due to COVID-19.
- Announce reopening specials, discounts, open houses or anything else upcoming.
Lysa Davis is a former banker with 20 years’ experience and the author of the financial blog The Trusted Banker.