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.