Small business secrets to thriving during a pandemic
The Canadian economy may have declined due to COVID-19, but some companies are staying positive. In fact, 77% of Canadian small business owners are optimistic about the future, according to a recent survey done by Visa Canada.
How can this be? While our daily lives have been transformed by the pandemic, some businesses have learned to adapt and shift their priorities. Here are four ways businesses are aligning to the present, surviving, and in some cases—even thriving:
1. Stay calm and calculated in your decision-making
Fears of running out of funds or another wave of COVID-19 are real, but you need to stay the course. Remember, if your business has survived this long, you’re doing something right. It’s probably not necessary to make serious business choices right away; take the time to think things through and ask for help when you need it.
By not panicking and adjusting to the circumstances as they come, you can make important decisions that will improve the morale for you and your staff. Everyone understands that the dynamics are constantly changing—but clear leadership is critical.
2. Take advantage of financial aid, loans, and deferrals
The Canadian government has introduced a few programs that can provide immediate relief for small business owners, including:
- The Canadian Emergency Business Account (CEBA): CEBA provides businesses with interest-free loans of up to $40,000. There is also an expanded program in the works proposing a new $20,000 loan, 50% of which will be forgivable if it’s repaid by December 31, 2022. See the government website for updates.
- Canada Emergency Rent Subsidy (CERS) With CERS, businesses that qualify would receive direct rent and mortgage help of up to 65% of eligible expenses until December 19, 2020. If your business is locked down by a mandatory health order, you could receive another 25% of support for your rent or mortgage expenses. So, through CERS, businesses that have been hardest hit could get a total rent subsidy of up to 90%. This last measure is pending legislation. Visit the government site for updates and more details.
Additionally, other government programs and some financial institutions are offering deferrals on credit card and mortgage payments. However, that’s only a temporary solution since the debt eventually has to be paid back in full—plus interest. Another strategy may be to take the opportunity to refinance any loans and lower your monthly payments. Reach out to an expert if you’re interested in financing options.
3. Continually adapt your business
COVID-19 has proven that curveballs can come at any time, so you need to always be thinking about what’s next. Businesses that have managed to succeed during the pandemic have likely adapted quickly. If you’re doing OK, now’s not the time to become complacent.
“Many businesses are in a difficult position as a result of COVID-19, but some have seen their profits rise,” says Jason Heath, a Certified Financial Planner at Objective Financial Partners Inc. “The key is planning for different scenarios—good and bad.”
For business owners, that could be something as simple as adding online ordering, delivery, or offering different services that could diversify income streams. It’s also an excellent time to think about marketing strategy. Some businesses have expanded their presence on social media, bringing in customers they otherwise never would have reached.
4. Bolster your financial plan
If you don’t currently have an emergency fund for your business, getting one started is an important step. Generally speaking, you want to have three months’ worth of expenses set aside. You don’t need to replace your full income in this fund; you just need enough money to cover your fixed expenses.
“I always encourage people to hope for the best but plan for the worst, whether they are managing their personal or business finances,” says Heath. “The pandemic is an example of a sudden and prolonged drop in revenue needs to be planned for by business owners.”
If your revenue is doing well, using that money to build up your emergency fund or to pay off any existing debt will have an immediate, positive impact on your business. Remember, quite often the financial health of small business owners is tied directly to their personal finances. So it’s never a bad thing to have too much money in the bank.
Embrace the “new normal”
Regardless of how your business is doing now, you need to plan for what might come next—the marketplace will most likely never be the same as it was. Do your homework. Review consumer spending patterns. See how your business can fit into emerging trends. This may seem at odds with overall business failures—but the pandemic is also in the process of remodelling the economy, creating new and unexpected areas of opportunity. As an entrepreneur, this is probably not a surprise to you. Successful businesses are the ones that can continually adapt to change.