Small business is at the heart of our communities, and many of these establishments have been hit hard by the COVID-19 pandemic.
While the end of the pandemic is unknown, the following strategies may help small businesses shore up and improve their financial well-being.
At Cambridge Savings Bank, we meet with our small business customers to discuss where they are now and where they expect to be in the coming months and years.
The conversations informed some of our top tips below, which are followed by specific goals to help you get started and make the most of each suggestion.
Above all, don’t panic!
Focus on taking care of yourself and remaining calm. Commit to taking the time to eat well, exercise whenever possible, and look after your own mental health. A calm demeanor will reassure your staff and model a better mindset that could benefit your entire business.
For Your Business Needs
Maintain a healthy environment.
Nurture forward momentum to drive your business and thrive.
We’re all going through this together, so reach out for emotional support from your business and personal networks, too. Making time to connect during this crisis might strengthen your existing relationships.
Cultivate your relationships.
Collaborate with suppliers and colleagues at other businesses. Focus on partnering with the businesses that you interact with often, such as your suppliers, local delivery services, or companies in the same industry.
Stay involved with your community and leverage non-profit organizations like your local Chamber of Commerce, the Massachusetts LGBTQ Chamber of Commerce, business organizations, and Service Corps of Retired Executives (SCORE).
Establish strong local relationships.
Keep informed of government lending programs, like the Paycheck Protection Program, or grants by asking for advice from your circle.
Do you know who your banker is, and do they know who you are?
A strong relationship with your banker may also help you access capital. These relationships will clarify the documentation required by your financial institution should you pursue short-term working capital. Banks are continually updating and streamlining processes, so a strong relationship with your financial institution will allow you to stay current with any technological advances that may further your business.
Make the connection.
Introduce yourself to your banker and learn something about them. Find out why they love what they do, what their superpower is, and how they prefer to spend their time when they aren’t assisting small businesses improve their financial well-being.
Communicate with consistency, clarity, and, above all, – transparency.
Be transparent with your employees about the challenges you are facing. Consult with them; ask them for ideas to keep them engaged and focused.
Practice the ask-offer approach to communicating.
Ask a question and offer knowledge of your own on another matter in return.
Engage your customers.
Communication with your customers is critical. It is significantly less expensive to nurture an existing customer than obtain a new one!
Engagement requires listening to your customers’ needs to understand what they are looking for from you or your products and services. How will your business meet its needs?
Leverage your website and social media channels to support this communication and keep them informed of any changes in your business operations or new offerings.
Create a social media post that asks a question about what your customers need NOW. Invite answers in the comments and make sure you respond to each one.
Commit to Your Financial Plan.
In these uncertain times, understanding your cash flow for the next month might feel challenging. That’s why we recommend that you take a slightly longer view and start with a three-month projection. Once you’ve got a clearer quarterly vision, you can build from there.
It is critical to have realistic projections of your cash flow needs. Focus on controlling your expenses to improve cash flow.
While it may be tempting to avoid doing so, an open and honest dialog with those you need to pay (landlord, financial institution(s), utilities, and suppliers) may help you find options to potentially defer costs.
Keep in mind that it is in their best interest to help your business stay open and operating.
Look where you’re going!
Create your three-month projection based on recent actuals and use it to update your twelve-month financial plan.
Pay particular attention to payroll.
Payroll is typically one of a small business’ biggest expenses.
While it is noble to maintain your payroll to help your employees, it may be in the best interests of your business to implement a temporary hiring freeze or to lay off any full-time employees while the uncertainty surrounding the pandemic persists.
In the interim, you could have them work as contract employees on an as-needed basis. This would allow you to continue to pay your staff members and service your customers’ needs while helping control short term costs.
Create opportunity from uncertainty.
Check in with your full-time employees and ask for volunteers to switch from full-time employment to contract basis for the foreseeable future. You might be surprised to discover that this offer suddenly better aligns with some members of your team (hint: those individuals are likely juggling working from home with homeschooling).
The chance to continue earning while ensuring all is well on the homefront may be welcome.
Remember, business is personal.
When focusing on your business, don’t forget to review your personal finances, too.
Trim the fat!
Cut out any costs that are not necessary or can be put on hold until revenues increase again.
Ultimately, practical advice is timeless. Some of these tips are probably already familiar to you because we suggest these same strategies even when life and business feel more predictable.
Top Three Takeaways
- Communicate honestly and embrace a realistic, positive outlook with everyone… from your customers, employees, vendors, suppliers, and, especially, your loved ones.
- Focus on short-term steps to improve your positioning, but don’t lose sight of either your professional or personal long-term goals either.
- Face this uncertainty with poise; be calm and confident that you are best prepared to weather the storm.