Small Business Survival During Emergencies – Build a simple BRIDGE plan to recovery!
The current Covid-19 response and its effects on the economy will no doubt be challenging to everyone. None more than small business and their employees, but we have been here before. Just as we weathered 9/11, hurricanes, economic downturns we can work together to survive this.
The good news is that this will be temporary, although it may be very trying, the economy should rebound rather quickly once activities normalize. Realizing this could be several weeks to several months, the best bet it to implement a strategy right now!
Here is a simple plan to help get to better days. We have decided to call it the BRIDGE plan.
BREAK EVEN ANALYSIS and BURN RATE – Immediately chart out your monthly expenses and come up with a break-even analysis. List all your fixed and variable costs and understand how much revenue you need to break even. If you are not going to break even, then understand your cash position and calculate how long you can survive. The goal here is to get your monthly burn rate down so you can last 6 or more months. Not that I think this will be that long, but the rate of return of normalized business may take a few months beyond the current crisis.
REDUCE EXPENSES – Now is the time to work to lower your variable and even fixed expenses. Look at all non-essential expenses and remove them. Then look at some other items that can handle some reduction. I am not a fan of ending all marketing and advertising activities but pick out the ones that bring the most return and suspend or reduce the others. Work with contracts like your lease, suppliers, and other obligations to get a reduction over the next 90 days. The hardest decision will be employees. Try to work with them. Maybe temporarily furlough, reduce hours or wages before letting them go. Employees, vendors, landlords, and suppliers will be in a tough spot too, but if we all tighten our belts together, we can get through this.
Increase Income and Investigate programs– Look at all of your revenue sources and see if you can focus on what will bring in the most money over the next 90 days. Leverage credit lines if you need to and reasonably expect you will be able to recover past 6 months. If you must close your business and have no chance of any income, you must work very hard on the previous step and halt all possible expenses. Don’t give up and just walk away. There will be programs like SBA disaster loans that will be available to be able to get cash to survive and reopen later. We will be promoting these programs, so follow our announcements on social media. There will be value to your business beyond this period that we can help sell later if you do not want to return.
Develop, Disclose, be Determined. Develop a team approach and remain calm and positive. Communicate often and be honest with your employees, customers, creditors, vendors etc. Do not try to bear the brunt of all this yourself mentally or physically. People are all in the same boat and they fear the unknown. If you show you have a plan and you are confident in your ability to recover, you will find that your partners in business (yes your employees, vendor, suppliers, etc are your partners) will be there for you.
Get to work and be GREAT! Now is the time that makes great business people and overall citizens! Implement your plan immediately and in a positive and constructive manner. Continue to meet with your employees via online tools like Zoom, Google Hangouts, etc Be a leader in your community and help those who are less fortunate. DO NOT PANIC! Be a part of what makes our country great! I often say it’s easy to run a business in good times, I’m proudest of our company when we get through the tough ones.
Entrepreneurs Expect to EXCEL! Just as you implement these first five steps of this BRIDGE plan, the sixth step is to plan on how you are going to excel in the future. No doubt this will soon be the perfect time to buy business equipment, make improvements on facilities, open a new location or buy competitors that could not survive this crisis. How often do we say after a downturn or business interruption that we should have bought or invested in “fill in the blank”?
As a company, Transworld Business Advisors is here to talk to you and help you through this tough period of time. We are huge fans of entrepreneurs and want to see everyone thrive in the future. As our motto “Good Deals For Good People” indicates, we are here for you to make sure we provide “Good Information”.
I couldn’t be prouder of our country, businesses, and its citizens for the steps and sacrifices we have taken to help keep our most vulnerable citizens safe. Stay calm everyone, we can work together and thrive!
If you want to wargame your specific situation out give me a call at 321-287-0349 or email me at mike@tworld.com. I am your Orlando Business Broker.