Many of my friends and most of our customers run small businesses.
The world is told to stay indoors away from people. But businesses somehow need to survive to fight another day, right?
How do you pay your rent, your employees, and sustain through this challenging time?
Short answer… I’m not sure.
But I’m in the same predicament, so working through these questions has helped us come up with a game plan we can share with other friends/customers.
On a positive note, we have all been through challenging times before. Both in business and personally… and even if this seems like the end of the world… I promise, it will all be ok. We have our friends, relationships, family… so we need to find a way to thread the need of vigilance to deal in reality and mind-bending insanity.
I gave this to a few friends at a restaurant, and retailer, but the ideas can work for any business. Here are a few ideas. And by the way… as you are reading, Remember, this list isn’t meant to be a checklist to survival. Rather a brainstorming list to get you started, and to help spark new innovative ways to survive and ultimately prosper. Use this list as a spark, not a fire. Cool?
- Email your landlord asking for rent concessions until things are stabilized
- Budget a 40% revenue reduction and the costs necessary to be able to stay profitable or breakeven
- Take salary cuts across the board
- Layoff non-essential Employees and help them to set up unemployment until you can hire them back.
- Reduce any software providers to one-time payments or yearly at a discount.
- Transition your email provider to one-time payment or yearly at a discount.
- Pull up your credit card and bank statements and look for expenses that you can cut or reduce. Go line by line and spend time making sure you aren’t leaking funds on unnecessary expenses. Look at your accounts and see if you can downgrade to more basic plans. Pause or suspend accounts for the interim until you need them again.
- Reduce any advertising that’s not 30 days ROI. If you can’t get money back quickly from ads, don’t invest.
- Lastly, look at your budget… if it costs you too much to stay open, it may be better to just close the doors until this time passes. More on this below…
- Pre-sell gift cards to existing customers. You can do this as a “Keep our doors open” gesture, or just as a new product. Your customers want to support you, so give them a way to!
- Deliver products to your customers instead of them coming to you. Take out is good, but delivery may be better.
- Create a quick Shopify store and start selling your food/products online
- Allow your customers to virtual shop over facetime, or Zoom and use a software like Bookafy to schedule these appointments
- If you are in food industry, start making other food or drinks you can deliver to your customers
- Create activities to sell that people can do at home
- Create software that people can use to stay connected while they are quarantined
- Provide free resources of DIY / make yourself products (with ads) so people can protect themselves.
- Transition or provide cars so all current employees can be drivers for Amazon Prime Now, Instacart, DoorDash, GrubHub, etc
- Look for things to buy or sell on eBay, Craigslist, Amazon or Facebook marketplace based on your existing inventory
- For restaurants, create a very small menu that one person can bang out. Maybe to go breakfast sandwiches, or burgers/chicken burgers for lunch/dinner. No one is ordering a steak for takeout, so maybe just create a small list of items you can make that are highly profitable. Pizza, Eggs, Pasta, Wine. 🙂
- Provide coffee, food or gifts to the hospitals. Some industries are WAAAAAY overworked. Maybe you can become a vendor?
- Reach out to the fire department for where they need help
- Encourage your patrons to stay at home, and buy from you online!
- Reach out to coffee farmers and other partners to see where you can help
- Provide whatever stipends you can to your employees
- Create a spreadsheet and figure out who needs what and start helping organize it
These aren’t “the answers” to solve everything… but I hope they spark some ideas that will help you weather the storm!
Closing Down, does this make sense?
First, remember even the big stores that have billions in revenue are closing down. Apple, closed worldwide. It may not only be a necessity, it might also be a good idea. here are some ideas to think through.
- Small business – If you have very low overhead, and you can operate the store/business on your own… then any revenue is better than no revenue. Real life example… my sister has a retail store, she has already invested in the inventory. So her ongoing expenses are rent, lights, internet, software. Once she has tried to reduce these costs with tips above, her fixed costs are what they are. If she closes, she will save her time but not save money so long as she is the only person working. For her, staying open is better than not… because even if her sales are down 90%, its better than 100% and she can use this time to work on other aspects of her business. Growing Instagram, taxes, marketing emails, improving her website, etc. She can still get a lot done “ON” the business while customers aren’t pouring in.
- Larger Business – Rent is 10K, employees are 30K, Utilities are 5K, Sales are normally 60K (15K profit), sales are currently 5K. To stay open you will be burning through an additional 25K per month. You will be burning 10K no matter what… but your options are 10K with lights off, or 40K negative with employees + rent + utilities. No Bueno. And man businesses can withstand a 10K loss for a month for rent, but how long can a business survive a 40K loss? That is the question. Do you have enough cash to support the business for months with negative cash flow? Apple, one of the biggest retailers in the world says “No”. No shame in their game right?
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