This week is National Small Business
Week, a celebration that highlights the important role small businesses play
in the American economy. As the economy emerges from the pandemic, this year's
commemoration comes with heightened expectations for business owners who hope
to raise brand awareness, be seen by other entrepreneurs, and promote customer
loyalty.
While some businesses adapted and thrived over the past
year, most faced work stoppages, and sustained enormous losses. Businesses
across the U.S. are slowly reopening as vaccines are distributed and COVID-19
cases begin to decline, but the road ahead could still be bumpy.
If you are a small business owner hoping to pick up where
you left off before the pandemic, what steps can you take toward recovery? We
provide some suggestions below.
The Road to Recovery: Steps for Rebuilding Your Business
While only about two percent of U.S. small businesses were forced
to close amid the pandemic, about 53
percent of small business owners report they do not expect a return to
pre-COVID levels of business for at least the next six months. Given the way
the pandemic has changed business norms and consumer behavior across every
industry, recovery will be a slow process. Businesses are tasked with adapting
to new safety measures as they attempt to mitigate risk for customers and
employees while continuing to manage uncertainty. So, where should business
owners start?
Assess the Damage
As a first step, business owners should consult with a
financial professional and examine past financial statements. Compare profit
and loss statements from at least the past five years along with any financial
damage your business may have incurred because of the pandemic.
Consider Funding for Recovery
Federal Aid programs like the Paycheck
Protection Program (PPP) were a lifeline for many, and aid packages passed
by Congress, such as the CARES
Act, offer additional provisions for small
business owners to help them offset losses. The American
Rescue Plan Act (ARPA) is now providing additional relief by extending and
expanding eligibility for the PPP while also providing economic injury disaster
loan advances to some businesses.
It is worth remembering that much of the aid offered via loans
must be paid back over time, therefore, funding and capital raising options should
be carefully considered. As your business recovers, you will need a clear idea
of your budget including the repayment of any federal loans.
Adapt Your Business Plan
Safety measures have ensured that business will probably
never return to what was once "normal" prior to the pandemic. Consumers are
concerned about their physical safety, which now plays a much larger role in
decision-making than ever before. Businesses like retail stores, restaurants,
and small venues will need to invest in digital technology that supports
contactless buying experiences or face a potential loss of consumers who don't
feel safe enough to patronize them.
Next time you conduct a SWOT (strengths, weaknesses, opportunities,
and threats) analysis of your business, consider what competitors are doing and
investigate how your industry has been affected by, and adapted to, the
pandemic. Determine the trends, see what you can emulate, and incorporate it
into your own business plan.
Create a Timeline and Plan for the Next Crisis
As the economy continues to recover and businesses reopen,
it is likely that you'll aspire to reach certain goals quickly. Success does not
come easily, however, without a realistic timeline that prioritizes critical
lines of business first.
One of the most important components of your recovery plan
and roadmap is a contingency plan for a future business disruption. While a
pandemic is likely a once-in-a-lifetime occurrence, other crises affecting a
business, such as burglaries, fires and natural disasters can occur. Take what
you have learned from the pandemic and consider creating an effective disaster
mitigation procedure to be prepared for the unexpected.
The pandemic has taught us the importance of agility, adaptation,
and vigilance in running a business. The more prepared you are, the higher your
chances of success amid an unstable and ever-changing economy. Turn to B.
Riley Wealth Management for the expertise and dedicated resources to help
businesses and corporate executives address their financial needs.