A survival plan for small businesses during Covid-19 pandemic
By SUMAC Media Team
There’s no doubt that small businesses will be the hardest hit from the current COVID-19 pandemic. The bigger businesses have a better chance of surviving; however, small businesses tend to live only with a few months of cash flow (at most), so when something as significant as this hits, it can be devastating not only for the small business owner, but also for the employees they support.
So, how can small businesses survive the turbulent times coming ahead in 2020? There’s no easy answer; however, here are a few points to start implementing and planning at least for the next three months, according to Sumac CEO John Njihia.
Don’t panic, take care of yourself, and keep calm
This can be difficult especially when cash is running out, but remember to take care of yourself in a way that works for you. For instance, eat well, and try to get some exercise in. Taking care of yourself will help you to keep calm, which in turn will also mean keeping your staff calm, and ultimately, a healthier mindset for everyone to come up with innovative ideas to move forward.
If faced with some difficult decisions, take time to balance yourself and your mind before taking any drastic decisions. In what is a very dynamic and rapidly changing situation, sometimes taking a step back to reassess, asking for trusted opinions, and also keeping perspective will help. Things will get better, and you aren’t in this alone. Ask for emotional support where you can, and when you need it.
Make a three-month financial plan
Every small business usually has the same key expenses, which include employee salaries, office rent, and utility bills. Further expenses range from industry to industry.
Speak to who you need to pay in the next three months (landlord and suppliers), and find out what options you have to spread out the costs. Chances are they may already have options in place, or will be understanding, as it’s in their interest to keep your business. Always be careful when you come up with payment plans with other small businesses, as they also need to keep afloat too, so this should be fair for both of you.
Look at your personal finances, and speak to people you may support to have a realistic discussion on how to control your personal spending for the next three months. What costs are necessary, what can be put on hold? If you have a partner supporting you as you grow your business as the breadwinner, have an open and honest discussion with them about your immediate and long-term plans for the business.
Also, look at ways you can cut costs. But use this as a last measure after we have seen at least two months of damage from the COVID-19 pandemic. Your biggest costs would usually be your staff and your office rent. You could also consider downsizing your office, and using a co-working space to have more affordable and flexible payment terms.
In the meantime, let us continue adhering to the Government’s directives of social distancing, staying at home, sanitizing our hands always, frequently washing hands with running water and soap for at least 20 seconds, wearing masks in all public places etc.