Running a small business is challenging. But now, these challenges have multiplied thanks to the Coronavirus pandemic. So, how can you keep your business afloat over the next few months until this is behind us? Here are eight crisis management strategies you can use to keep your business strong.
What is Crisis Management?
Crisis management is the way by which businesses and other organizations deal with highly disruptive events or disasters—essentially what they do to navigate and minimize the effects of the crisis.
The most effective way to do this is by creating a formal crisis management plan or risk management plan that addresses the key risks a business will face in the event of a crisis. This response plan basically lays out all of the risks and the steps they will take to minimize each of those risks.
Such plans needs to look at a crisis from all angles, including how it could affect your customer base, employees and suppliers, as well as your general ability to continue your operations and generate revenue. As we’ve learned during this crisis, it’s important to consider what your crisis management process would be if your business is forced to shut down temporarily or operate remotely during a crisis situation.
How Small Businesses Survive Recessions
No small business is completely recession proof, of course. But those that have created a crisis management plan (often part of a general business continuity plan) are much less exposed during a recession because they have a roadmap they can pull out when a recession strikes—or even better, when it appears likely to strike in the near future. They don’t have to scramble to figure out what to do or how to react because their crisis management strategies are planned out and ready to be enacted.
During the Great Recession of 2008 to 2009, small business owners who had a business continuity plan were able to navigate the economic crisis much more successfully because they had already thought through the key challenges a crisis situation such as a recession would bring, such as fewer customers willing or able to spend money and a lack of business financing available. Because they had created those plans in advance, they didn’t find themselves caught off guard and were able to quickly make the changes they needed to survive.
Thinking through all of the ways a crisis could affect your business is imperative. The following eight tips provide a starting point for small business owners to build their own crisis management strategies and make a plan—not only for this crisis, but the crises that will inevitably happen down the road.
8 Things to Have in Your Crisis Management Plan
Get an SBA loan.
The Small Business Administration is now offering very low interest loans to small businesses in need through its Disaster Assistance program. Because these loans are issued directly by the SBA, approval times are significantly less and the red tape is significantly lower.
Get money from your state.
Many states have setup funds, grants and loan programs for small businesses in need of assistance during this pandemic. Every state in the country is providing information, advice and counseling. Go to your state’s website to see what’s available for you.
Get money from your city.
Many cities and regions have setup funds and loan programs for their local small businesses as part of their crisis management plan and you might be in a region where you can benefit. We’ve put together a comprehensive small business assistance guide on how to receive aid and keep your business open in each state.
Talk with your accountant.
Tax return filing deadlines have been extended through July 15. The same goes for payment deadlines for your final amounts due from 2019. Talk to your accountant about this. Adjust your estimated taxes for this year. Consider filing your taxes early if you’re looking at a refund. Also, if you’re offering paid time off to your employees under the new federal legislation, get familiar with the tax credits you can get back.
Push your banker.
Reach out to your banker. Confirm your available lines of credit. Ask if your bank is offering any special loans or financings for small businesses related to this pandemic. Many larger banks are already doing this, and it’s likely that your bank will work out new payback programs to defer cash outlays for the short term.
Push your big vendors.
Your smaller suppliers are likely suffering through these times, but your bigger vendors have more resources to weather this storm and many of them are open to helping. Don’t be shy. You should be calling your largest vendors and suppliers and discussing extended payment terms to help alleviate your cash flow challenges during this small business financial crisis. You will be surprised at how open they are to doing this.
Educate your team members.
Communicating during a crisis is essential. Communicate frequently with your staff, even if they’ve been furloughed, like so many restaurants and merchants have been forced to do. Why? Because they need to hear what’s going on and you need to keep them close for when you’re back in business and needing staff. Keep them posted on company developments, but more importantly educate them on all the benefits that you and the government have made available for them to get through these times.
Finally, use the downtime.
Hopefully you can steer the ship enough so that things are fairly settled for the next month or so. If that’s the case, then use the downtime wisely. Check out our small business resource center and our list of small business survival resources. Plan for the future. Get some employee evaluations done. Clean up your data. Do some online training. Rest.
I believe the Coronavirus pandemic is a short-term event. I also believe that when it’s behind us, the economic snap-back will be significant. Those are my beliefs and I’m running my business with this in mind. I’ve taken all the steps mentioned above, as part of my crisis management plan, to keep me going until then and I hope you’ll do the same.
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