While emergency relief funding is on the way for many local companies, local business owners must focus on keeping their companies afloat in a new business environment. They can start planning for the sporadic opening by asking such questions as: how to reach across to vendors, customers and employees as they begin to function again. Here are five suggestions to incorporate into plans for how to resume operations:
1. Cut costs wisely. While businesses in a cash crunch often start making cuts to reduce costs, doing so can be detrimental in the long term. Before you make cuts, run that through your financial projections, because businesses ultimately need to think about growing their way out of this crisis. Every cut made is going to cut the business’ ability to generate revenue or keep the business going, which is not something you want to be doing right now.
2. Bring employees back. Recently laid-off employees are now collecting unemployment benefits, and some are receiving an additional $600 per week through July as a part of the federal government’s recent stimulus package. Convincing some employees to return to work could be a tough sell, either because of health concerns or other reasons. If your business offers health insurance, it could be the answer as you can say, “If you don’t come back to work, we’re going to have to let you go, and you may lose your health insurance.”
Keep in mind that some employees could come back to work and immediately take advantage of the Families First Coronavirus Response Act, which requires some employers to provide paid sick leave or expanded family and medical leave for reasons related to COVID-19. By the way, if your business doesn’t currently offer an employee health insurance program, consider looking into the Mountain Top Healthcare program offered through the Leadville Lake County Economic Development Corporation (LLCEDC). It is a low cost way to offer that employee health benefits.
3. Revisit the business model. Switching up the business model may be the last thing you want to do when you reopen, but it could be what keeps you in business. As you revisit the business model, ask yourself the following questions: What should my business model be when I come out of this? Is my current business model viable? If so, how can I hang on until it’s viable again? Are there ways I can pivot all of my expertise into a better revenue stream? Diversifying revenue comes down to changing one or more of the three following aspects of your business model: what you sell, whom you sell it to, how you deliver it.
4. Consider new vendors. Even if your business reopens, the vendors in your supply chain may not. That could require finding new vendors, and those vendors might require cash-on-delivery. That’s a whole new cash need. Another issue is having to ship your products to customers who may not be able to come to you. You may have to incur costs for shipping or warehouse fulfillment if you want to continue to keep those customers. Keep in touch with your vendors; communication will keep your relationships strong.
5. Tap into local programs. While many local business owners have been focused on the federal government’s Paycheck Protection Program and Economic Injury Disaster Loan program, additional resources are available at the state and local levels, such as the new LLCEDC Relief Grant or the Leadville City Relief Grant.
I have talked to several local landlords and suggested they try to provide some flexibility for their tenants because the landlords should want those buildings occupied again when this is all over. Both the Central Mountain Small Business Development Center and SCORE currently offer free business counseling in Leadville. The LLCEDC, in keeping with its vision to be the leading catalyst for local business success, opened applications for a new LLCEDC Relief Grant Program last week. For more information on the program, and other grants and resources available to local businesses, check out the LLCEDC’s website at www.lakecountyedc.com.
Let’s get through this together!