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How to reopen your business at reduced capacity and make sure you don’t lose money

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How to reopen your business at reduced capacity and make sure you don’t lose money

The COVID-19 pandemic has caused a severe impact in various areas such as economy, politics, ecology, culture, education, and entertainment.

Students have shifted to distance learning. Offices have adopted remote work strategies. Purchases have been primarily made online. At-home food consumption has dramatically increased. Governments have been operating and navigating through uncertainty. Travel bans have been imposed. Social issues in local economies, as well as inequalities, have begun to surface. The public is encouraged to wear masks and practice proper hygiene, and when outside, they are expected to stand about two arms’ length from one another.

Small businesses are no exception to the effects of the global pandemic. In a study conducted by the National Bureau of Economic Research, approximately over 100,000 small businesses have permanently shut down because of lockdowns prompted by the coronavirus outbreak.

A massive dislocation is exhibited among these small scale enterprises, and although relief funds have been provided by the US Congress to alleviate the situation, the initiative is not sufficient to assist very small businesses with huge overhead costs.

However, at some point, these enforced shutdowns and quarantine restrictions will begin to ease. In some countries, they already have, and new workplace policies and standards have been implemented in a post-coronavirus society through small business reopening guidelines provided by local authorities.

If your venture is one of the many small enterprises waiting for the green light to start operating again, then this is the perfect opportunity to prepare and find out how to strategically tackle small business reopening challenges and jump back into the game with creative methods that boost efficiency and reduce costs.

1.   Be informed and up-to-date

Whether you’re working in retail, serving meals to hungry diners, or doing hair and make-up, the Centers for Disease Control and Prevention (CDC) have small business reopening guidelines for enterprises to ensure that you’re reopening safely.

The CDC’s decision tools can be harnessed by any organization when thinking about reopening small businesses after COVID 19. Local and state law must give a go signal to resume business operations. The enterprise must also be able to safeguard staff that belongs to a category that places them at an elevated risk for severe illness.

If either requirement is not met, your organization must remain closed; however, if both items are ticked, the CDC requires you to evaluate and implement health and safety measures in your enterprise. These cover frequent hand washing, mandatory mask-wearing, promoting social distancing through remote work, and training staff on these health and safety protocols.

Finally, if you can rise to these demands, the CDC requires constant monitoring, since dealing with COVID-19 is very fickle. The organization asks small businesses that are considering reopening to have enough health and hygiene signages, flexible medical schemes for staff, and capabilities to consistently observe their employees’ health.

You can find more decision tools and detailed small business reopening guidelines on CDC’s website.

2.   Cut costs — but do it wisely

Reopening small business after COVID 19 is not a walk in the park. Those who are preparing to do so are launched into “survival mode” if they want to keep their enterprise afloat in the harsh new pandemic-induced landscape.

Prompted by this mentality and being submerged in a cash crunch, most organizations think to make cuts to trim down expenses effectively. While it might seem most logical, doing so can be detrimental for your organization in the long run, especially if you don’t align your cuts with your financial projections.

Reopening establishments should be wise enough to remember that each cut they make also reduces their capacity to produce profit and keep their business running. Reducing costs should not be the only thing in mind for small businesses looking to get back on their feet post-pandemic. Overcoming small business reopening challenges and growing their way out of them should be their top priority.

3.   Consider financial support

COVID-19 support is available to small businesses that are planning to reopen. You can choose to avail loans, tax reliefs, and cash grants and even look after your workforce. These financial supports can help you generate extra cash as you go through a cash crunch.

The US Small Business Administration’s (SBA) offers assistance to SMBs facing reopening challenges amidst the global pandemic.

They have the Paycheck Protection Program (PPP), a loan that supplies a direct incentive for small enterprises to ensure that their staff remains on payroll during the crisis. Loans will be forgiven if the money is primarily used for payroll expenses. Companies can also use it for mortgage interests, rent, and utilities.

Another option would be to consider a support grant application to SBA’s disaster assistance loans.

The SBA is currently providing COVID-19 Economic Injury Disaster loans for organizations to reach financial obligations and operating costs that would have been met if there had not been a pandemic. Funds are to be utilized for working capital and normal operating costs, which cover rent, utilities, fixed debt transactions, and continuation of health care benefits.

Outside the SBA, enterprises can look into the Coronavirus Aid, Relief and Economic Security (CARES) Act for Employee Tax Retention Credit, which similarly functions as PPP and also supplies direct incentives for small businesses so they can retain their staff amidst the crisis.

4.   Revisit business model

As we’ve mentioned, COVID-19 has significantly impacted on multiple aspects of life, including shopping. With the abrupt rise of e-commerce, retailers across the globe are requested to adapt to new customer behaviors and reopening challenges.

For instance, in Canada, overall retail sales dropped down 17.9% from February to May 2020, while retail e-commerce sales almost doubled at 99.3%, reaching a record of $3.9 billion in May, according to Statistics Canada.

In the US, an analysis shows that consumers spent $347.26 billion online with American retailers and accounted for 18.6% of overall retail sales for 2020’s first two quarters. The spike in online sales can be largely attributed to buyer habits prompted by the height of the COVID-19 pandemic.

Besides going online, consumer behavior has also adapted to suit the needs of post-pandemic living conditions. Following the crisis, consumers have been found to spend less on non-essential items, and although panic buying has nearly taken a halt, some buyers still continue to stockpile products with disaster preparedness in mind. This has created a high demand for certain necessities such as toilet paper, hand sanitizer, cleaning wipes, and dry food products.

Additionally, consumer confidence is at an all-time low, with data showing a fall in consumer confidence in 41 out of 50 US states.

With these small business reopening challenges in mind, enterprises must look towards reevaluating their business models by incorporating the new shopping habits of post-coronavirus customers.

Consumers will purchase more sustainably and responsibly, and e-commerce will continue to see a surge in various industries. Most importantly, many customers will remember and value merchants and goods that have met their needs and forged an individualized relationship with them during the crisis, thereby significantly affecting long-term brand loyalty.

5.   Define staffing requirements

Part of the small business reopening guidelines organizations must follow covers staffing requirements.

As health and safety measures continue to be put in place during the lockdown, some businesses are only allowed to operate during a certain period. Make sure that you’re adhering to the reopening guidelines when it comes to operating hours, and make sure to continue practicing health and safety measures during your organization’s busy buyer hours.

Besides working hours, companies are also expected to dedicate their operations to higher ethical principles by becoming increasingly responsible for their staff. If you really want to continue being an entrepreneur in this post-COVID 19 era, you must be willing to always look after your staff, especially when it comes to their health and safety.

This means that if it is necessary for employees to show up on-site, enterprises must continue to maintain social distancing within the workplace by only requiring their skeletal workforce to be within the premises or by reducing the number of workers per shift and conducting breaks within shifts for sanitation of work zones.

Collaboration and the adoption of an inclusive workforce have also taken center stage in the wake of the pandemic. Flexible work through work-from-home strategies has been implemented to slow the spread of the virus, but monitoring employee productivity and constant communication with staff remains necessary.

Using a remote work software to stay connected with employees who are working from home can enable you to remain efficient as you bring back your operations.

You must also inform your workforce regarding new work practices and guidelines that you have implemented in your operations to cope with the pandemic. You must effectively communicate change and show sincere support for your employees during these tough times. This especially concerns work health and safety, which should be your top priority when reopening small business after COVID-19.

Getting back on track together

Although the lockdown has caught your business off guard, there are many ways to adapt to the new normal and thrive in it, such as transforming your business model, workflow operations, and seeking help from financial institutions and organizations through small business reopening and support grant application.

To outlast the effects of the coronavirus on the economy, you must develop a responding and pivoting strategy that addresses the demands of your operations, your workforce, and your customers while adhering to the health and safety small business reopening guidelines and to the law implemented by the government to contain the pandemic.

Here at Sage, we aim to inspire you to rise above these small business reopening challenges, and we hope that our comprehensive guide  can help your business swiftly get back on its feet.

 

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