Small businesses have a unique challenge in navigating the Coronavirus pandemic. While the large multi-national, billion-dollar conglomerates often grab the headlines - and bloated bailouts, the truth is small businesses are the backbone of the U.S. economy. There are approximately 30 million small businesses in the U.S., which incredibly, makes up 99.9 % of all businesses, nationwide (SBA, 2019). Small businesses also create 15 million jobs annually and account for 64% of all new jobs created in the U.S.
From these statistics, it’s clear to see what’s at stake for small business owners - both currently, and in the future - with the challenges this pandemic has presented. The economic health of this country literally depends on the financial health of small businesses.
The vast majority of employers have attempted to take advantage of the Paycheck Protection Program rolled out by the federal government. The first round of PPP was quickly depleted, with $349 billion in funds claimed in thirteen days over 1.6 million loans. The $195 billion in funds that have been claimed so far in round two have supplied 2.5 million loans, according to the SBA.
As of May 7, there was still approximately $125 billion of PPP funding still available, according to a spokeswoman for the Small Business Administration.
Look Beyond Your Immediate Organization
So the good news is there is still some short-term financial relief available if you’re an employer and have not been able to benefit from PPP yet. Yet what about the long term? As an employer, you’re taking all the steps to protect your employees, customers, and critical business operations during the COVID-19 pandemic - but what about all the players who play a role in your company’s broader ecosystem? There are some significant repercussions as a result of this pandemic that stretch beyond simply an infusion of cash.
Employers that are beginning to shift their focus from immediate COVID-19 responses to long-term recovery planning, may find that many key contributors to their organization’s success have been irreversibly affected and disappeared or gone out of business. Affiliates, distributors, vendors, suppliers, buyers, agencies, contractors, etc., all of which many small and midsized companies rely on - may not survive the pandemic. Their failure will definitely have an impact on your company, especially if their services were key to your organization’s success. This can present a significant obstacle if your strategy is to try to rebound quickly.
Planning Ahead
To ensure the success of your organization, the next few weeks and months are critical, and smart employers will do their best to support and protect not just their own company and workforce, but their entire community of service providers and stakeholders. Your goal should be to strengthen your relationship with the companies and individuals you count on to support operations, serve customers, and drive revenue.
Three ways employers and small businesses owners can achieve this:
- Reach out often. Create a detailed plan of communication clearly defining who the points of contact within each stakeholder organization are. Be specific about the appropriate function and individuals responsible for making the contact. Remember, there are probably vendors, suppliers, contractors, or agencies that provide support to your organization. Everyone should be clear on the key messaging that should be communicated about your company’s current response to COVID-19, and longer-term strategy. Provide all the information necessary to offer assistance and support.
- Provide training and assistance. Many small companies or contractors who contribute to your organization could potentially benefit from provisions within the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Understand that they may be in ‘survival’ mode, and just trying to figure out how to make it from day to day, so they may need support to understand and apply for the benefits. You could request that your employees that oversee accounting, tax, or legal aspects of your business take some time to devote to answering questions and provide assistance. Long-term, this benefits your organization because you’re helping your key stakeholders and contributors make faster, informed decisions, which can help them navigate their way through this crisis -- and be there to contribute to your company’s success in ramping back up in the months to come.
- Offer direct support. Is your company in a position to help key stakeholders financially? Can you provide loans or grants? Can you change your ordering and/or payment procedures and timelines? Try to think of some other short-term adaptations that can provide much-needed cash infusions or savings to your partners that may be struggling.
Remember, every organization is different in terms of the resources, manpower, and financial assistance it can provide. Try to think outside the box about the kind of levels of support and guidance your company can provide to its stakeholders and contributors. It’s not necessary to provide the same level of assistance to everyone; prioritize according to what impacts your business most.
Taking steps today to protect your key contributors will provide long-term benefits as the economy begins to reopen.
Get Help With Debt Relief During the Coronavirus Pandemic
Dealing with debt at this time can be an immense challenge. Of course, if you find yourself extremely compromised with debt or simply feel overwhelmed and not sure of the best course of action, we can help you. Financial Rescue has helped tens of thousands of people resolve hundreds of millions of dollars in debt over the last eleven years. These are precarious times and it’s natural to feel anxious. Feel free to call us for a complimentary, no-obligation consultation. We are also offering flexible and discounted programs to all Frontliners through the end of June!