The past 12 months have not been kind to businesses. That’s especially true of small businesses, many of which have folded.
Being an entrepreneur is challenging enough during normal times. Getting a business off the ground is a huge task under ordinary circumstances. And trying to maintain growth through the years isn’t any easier.
Toss the COVID-19 pandemic into the mix and you have a recipe for disaster. Even early in the crisis the National Federation of Independent Business reported that only 5 percent of small business owners said they had not experienced any ill effects.
Obviously, some small businesses were more impacted by the coronavirus than others. Those which are dependent on a physical presence in a brick and mortar structure were particularly hard hit. Many online businesses and some that conduct outdoor work felt less of a crunch but still took a significant hit.
They say only a small percentage of American companies have actually benefitted financially from the pandemic. If yours was one of them, congratulations. I’m guessing your business probably provides a product or service that people need now more than ever.
But if your business suffered greatly during 2020 and beyond, my heart goes out to you. As a fellow entrepreneur, I understand all too well how difficult it is to roll with the punches, especially during the first few years of launching a business. And particularly when there was no way to anticipate the flurry of punches produced by the pandemic.
For some of you, the big question is, Where do I go from here? Do I cash it in and try again when the virus and its negative effects are in the past? Do I get as lean and mean as possible and try to survive until things improve? Or do I spend whatever is necessary to rebound and hope things turn around in the near future?
Obviously there are no easy answers. And much depends on how badly your business has suffered the last 12 months and what your prospects are for recovery.
But what I’d like to offer today are three steps you might want to consider that could serve to assist in your decision-making process.
First I recommend revisiting your business plan. This can be painful because your original business plan was undoubtedly the result of considerable deep thinking on your part. And it might have been serving you very well prior to the pandemic.
One of the adjustments you may have to make is pivoting to a new normal. Even if the vaccines prove instrumental in halting the virus in its tracks, the business environment is likely to take a while to return to pre-COVID days.
What a revised business plan means for you is dependent on the type of business you are running, how many employees you have, and how dependent you are on foot traffic. As well as how the pandemic has affected the need for your product or service.
You may have to change your business model so you’re able to make a higher percentage of your profits from online sales. And so that at least some employees are able to work remotely.
Is there an area where your competitors are falling short? An area where you can separate yourself from the pack by offering a service or product customers can’t get from your competitors? Or perhaps offering that product or service in a different way or at a better price? That could make a big difference in your recovery.
Second, after revisiting and possibly revising your business plan, I recommend creating a rebuilding timeline.
You may already have a list of things you want to accomplish as part of your recovery process. They could include gaining financing, hiring and/or rehiring employees, and restocking your inventory.
But you may not be in a position to do all these things and others right away. And that might be just as well. Determine a priority order and then focus on one thing at a time. Otherwise the whole process might seem overwhelming.
It’s more important to get each step in the process right than it is to be working on all of them at the same time. If securing financing to jumpstart a re-launch is necessary, it might be your first priority. There are a number of options to consider, and a financial adviser could help you decide what makes the most sense.
The Small Business Administration works with lenders to provide loans to small businesses. Among their programs is the Paycheck Protection Program, which provides loans to help businesses keep their workforce employed during the pandemic. As well as Economic Injury Disaster Loans, which provide relief for businesses experiencing a loss of revenue due to COVID-19.
Third, after revisiting your business plan and creating a rebuilding timeline, I recommend preparing for a new normal, the next crisis and a business boon.
Best-case scenario, the new normal is going to be different from the old normal. Even if vaccinations and safety protocols serve to shut down the spread of the virus quicker than anyone could imagine, many people are still going to be leery about gathering in groups and making in-store visits. How can you adjust your business model to account for that?
There’s no way to predict what the next crisis will look like. It could be another global pandemic or it could be something tied solely to your industry. But I think it’s clear from the coronavirus pandemic that the quicker companies adjust to the challenges presented by a crisis, the better they can handle them.
Perhaps the easiest way to do this is to look back and ask yourself a few questions. Such as, What would I have done differently prior to the pandemic if I had known it was coming?
What systems would I have had ready to put into place immediately if I had known that income was going to dry up? What different products or services would I have tried to offer if I’d known there would be far less demand for my current products or services?
Finally – and in order to end on a positive note – I recommend preparing for a boon to your business. As of early March 2021, the number of new COVID-19 cases, hospitalizations and deaths were going down. In some cases, dramatically.
If the business environment improves in a hurry, will you be ready to take advantage of it? Stay in touch with your customers. Even if they haven’t bought anything from you for a while, stay top of mind with them by consistently providing them with information they can use.
And then when it comes time to reel them in again, they’ll remember that you were there for them even when they weren’t spending money with you.
This thing is going to end. How soon, nobody knows. But when it does, hopefully we’ll be ready with a revised business plan and a rebuilding timeline. And we’ll be prepared to face a new normal, the next crisis and a business boon.
Allen Baler is a leading entrepreneur and Harvard grad. Allen Baler is a Partner in 4Patriots LLC, based in Nashville, TN.
Disclaimer: This blog post is not a substitute for the sound advice of a professional with expertise in the subject matter discussed. Please seek appropriate counsel on what strategies make sense for your personal circumstances and/or your business.