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How to Survive a Business Crisis
The coronavirus pandemic is nothing the living population has experienced before. Never has the economy come to such a dramatic standstill, with everything from ski resorts to clinics to even the NBA shutting down.
It’s novel, that’s for sure—but businesses have always faced crises (in one way or another) and found a way to persevere. The COVID-19 pandemic is no exception.
Survival won’t happen by accident. It’ll require planning, patience, and precise execution. Preferably, you’d have already created a business contingency plan, but let’s be honest — few (if any) businesses created a strategy for the whole world economy closing for three months.
Still, it’s better late than never. If your business is feeling the impacts of COVID-19, it’s time to take action. Below we’ll cover how to protect your business and survive this crisis (or any crisis for that matter).
Create a Business Plan
You won’t get by just throwing darts and seeing what sticks. You need a plan, and that plan needs to be supported by data, strategy, and goals.
1. Describe Your Business’s Situation
What’s going well? What’s not? What needs fixing? Revisit your SWOT analysis: strengths, weaknesses, opportunities, threats to better understand where your business stands.
2. Review Your Finances
Review your finances, and adjust your budget accordingly. How much cash do you have on hand? How much additional cash will you need to survive the crisis? Are there any fixed or unnecessary expenses you can reduce or cut? Do you need financial assistance? How will you get these funds? Perform cash flow projections, and think through the best-case and worst-case scenarios, so you’re ready for any situation.
3. Define Your Goals
It is important to think about both short-term and long-term goals. How quickly do you plan to recover? What do you want the business to look like in 12 months, three years, or five years? Remember your BHAG (big hairy audacious goal) — this probably won’t change, crisis or no crisis.
4. Examine the State of Your Industry and Customers
How has the pandemic affected your industry, competitors, and customers? Can your business fill any immediate needs? What’s the best way to communicate with your customers? Do you need to give your customers some space, or is now the time to provide them with urgent attention? Revisit (or create) your customer persona so you can understand what your clients are likely going through right now and how you can help.
5. Investigate Your Indirect and Direct Competitors
How are your competitors handling the crisis? Are they finding ways to keep their doors open, or have they shut down shop completely? Keep in mind that healthy competition is good for business. You may want to think of ways you can team up or work together to keep your industry alive and support each other.
6. Plan How to Make Your Goals a Reality
Make plans for how you’ll make your business aspirations come to life. If you want to rehire all your employees, how do you plan on making it happen? If you’re going to expand your digital presence to compete online, what will you invest in first? And where will you find the money to make it all happen? We’ll get into more of this below in the section Reevaluate the Way You Do Business.
7. Transform Your Knowledge into the Business Plan
Collect all of your answers, strategies, and information into a formal plan: an executive summary, financial strategy, and all. Maintaining one source of truth will help you seamlessly keep your entire team on the same page and focused on the same outcomes.
Stay Up-to-Date With Relevant News
Don’t just read any ol’ news article — there’s enough of those to keep you wide-eyed and paranoid all night long. Instead, follow announcements from your local officials, the federal government, and industry-specific publications.
It’s important to know what’s going on with local policies and the industry in general to inform critical business decisions. For example, stay-at-home executive orders or mandatory closures of non-essential businesses are going to impact the way you do business dramatically. You need to know about these changes as soon as they happen, in order to respond in a timely and effective manner.
When these developments occur, whip out your business plan and see how it may be affected. You may find that the change doesn’t really impact your goals and operations, and thus you don’t need to pay it too much attention. On the other hand, you may find that the policy flips everything upside down, and you do need to shift your strategy immediately.
Reevaluate the Way You Do Business
To survive, you’re going to need to think outside the box and alter the way you operate your business. And who knows — you may stumble upon new products and services that’ll benefit your business both now and in the long run.
Depending on your location, your options will vary. If you operate in an area that’s closed all non-essential businesses, you’ll need to find a way to compete in the digital world. And if you’re still open but seeing little-to-no foot traffic, you’re going to have to find ways to go to your customers, rather than wait for them to come to you.
There’s no one-size-fits-all answer to how you should operate under these unique circumstances. To help get your creative juices flowing, take a look at how other businesses in varying industries are getting clever to stay open:
- Companies around the world have embraced remote work
Remote work isn’t a new concept, but most businesses haven’t experimented with it at scale (or at all). Businesses are finding that they’re able to operate and get work done without gathering in an office. When conditions relax, they may find they can eliminate some expensive real estate altogether to save money.
- Businesses are taking their products and services online
Gyms are offering online fitness classes. Hairstylists are selling DIY coloring kits and taking virtual appointments to coach customers through the process. Even ergonomic coaches are going digital to continue helping clients. A barber may have never considered taking virtual appointments and guiding customers through a haircut, so it’s important to get creative in your online offerings.
- Some companies are relying on gift cards
Instead of finding creative ways to sell their services, some businesses are making gift cards their money-maker. Gift cards are just money now in exchange for service later—which is exactly what you need in a crisis. It also helps ensure you have a flow of customers when your doors finally reopen.
Simultaneously, make sure you review your online marketing efforts. Create a social media presence if you haven’t already done so. Launch a website or optimize your existing one. Put your local business on the map with SEO. Figure out which initiative is a top effort and start there.
Tap into Available Financial Assistance
Federal, state, and local governments worldwide are responding to COVID-19 with a number of measures to ease the financial burden on distressed small businesses, including:
- Low-interest (or zero-interest) loans
- One-off cash grants
- Fast-tracked payment of outstanding supplier invoices
- Tax deferrals
- Fee waivers
- Rent relief
- Utility assistance
And (much) more.
Check out your respective government’s website for up-to-date information on what’s available to you:
- United States: https://www.usa.gov/
- Canada: https://www.canada.ca/en.html
- United Kingdom: https://www.gov.uk/
- Australia: https://www.australia.gov.au/
- Netherlands: https://www.government.nl/
- Spain: https://www.lamoncloa.gob.es/Paginas/index.aspx
- Germany: https://www.bundesregierung.de/breg-de
- Italy: http://www.governo.it/
- France: https://www.gouvernement.fr/
- Switzerland: https://www.admin.ch/gov/de/start.html
- Brazil: https://www.gov.br/pt-br
- Mexico: https://www.gob.mx/
ProTip: Visit OECD and enter “Government of [YOUR COUNTRY]: Useful links” for a list of your country’s government sites.
In times of crisis, many nonprofits and the private sector often step up to provide help and support during such trying times. Currently during the COVID-19 pandemic, there are numerous support options:
- Google is giving $340 million in ad credits to SMBs across the world, and Facebook is dishing out $100M in cash grants and ad credits.
- Banks are accommodating customers by waiving and refunding (late, ATM, transfer, deposit, overdraft, penalty, maintenance, service) fees, reducing rates, deferring payments, and providing loan payment assistance.
- Companies and nonprofits are offering discounted SaaS tools, complimentary access to paid services, and free trials.
- Nonprofits (and for-profits alike) are establishing funds to disperse grants.]
It is worth looking out for these in any crisis situation, as they can provide the support you need to help keep your business afloat. There are currently numerous pandemic-independent funding options worth exploring:
- Business credit cards
- Business lines of credit
- Equipment financing
- Installment loans (AKA term loans)
- Merchant cash advances
- Short-term business loans
- Invoice factoring/financing
- SBA loans (US only)
Survive This Crisis
Getting through the COVID-19 pandemic won’t be easy. It’ll cost you time, money, blood, sweat, and tears, but it’s worth it. This crisis will pass, and the businesses who adapted and persevered will be the ones left standing.
Do your part. Make a plan, reevaluate the way you do business, and stay on your toes for any changes that may occur. Remember, while the coronavirus pandemic is novel, businesses have survived the Great Recession, 9/11, and much more. Your business can survive this crisis, too.
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Samantha Novick is a senior editor at Funding Circle, specializing in small business loans. She has a bachelor’s degree from the Gallatin School of Individualized Study at New York University. Prior to Funding Circle, Samantha was a community manager at Marcus by Goldman Sachs. Her work has been featured in a number of top small business resource sites and publications.
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