What your business can do about the Coronavirus?
If you watch the news, you can be forgiven for feeling like the coronavirus pandemic is more or less a zombie apocalypse event -- or about hoarding toilet paper.
As the numbers of coronavirus cases continue to climb — partly due to its rapid spread, and partly due to more extensive testing — people in charge of various institutions are facing a severe problem: To close, or not to close?
In short, we face a variant of the old medical adage that in the early stage, diseases are easy to treat but hard to diagnose, while in the later stages they are easy to diagnose but hard to handle. Right now, things aren't bad enough to make closing the apparent action. The trouble is, by the time things get that bad, it'll be too late for closing to do as much good.
Still, some people are already closing.
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Stanford University has closed its in-class meetings; so has the University of Washington and a few other colleges and universities. A trickle of public K-12 schools has shut to reduce the spread of the disease. Some companies, like Apple, Microsoft and Amazon, are encouraging their employees to work from home wherever possible — the effect in Seattle has been so profound that traffic has disappeared — but most companies are still doing business as usual, perhaps with some limits on international or maybe even domestic travel.
Managers don't want to move too fast, because closing things down or shifting operations online or making other changes costs money. And they're afraid of looking "panicky."
Well, I can't tell people what to do, but let me make one suggestion: If you think you're going to have to shut down sooner or later, you should probably just go ahead and do it faster. With a disease spreading more-or-less exponentially, and with a lengthy contagious period in which there are no symptoms, by the time it's obviously spreading among your students or employees, you'll be past the point where interrupting transmission will really make a difference.
It looks as if we're already past the point of trying to isolate individual cases and trace their contacts back — the "containment" phase — and into the stage of trying to slow down the spread — the "mitigation" phase. Reducing the number of people that each individual contacts each day, especially in settings that facilitate contagions such as crowded offices and schools, will slow the spread significantly. That's important, because the faster the range, the more patients will probably hit hospitals at once, overloading their ability to treat the seriously ill coronavirus victims, and, for that matter, their ability to treat practically everyone else.
As local and state governments issue shelter-in-place orders, asking residents to remain home for all but essential errands, businesses — especially small local businesses — across the U.S. are facing difficult decisions. These institutions are crucial to our nation's economy, employing 58.9 million people in the United States, or about 47.5% of the total private-sector workforce. Their GDP contribution measured $5.9 trillion in 2014, the most recent year for which small business GDP data is available.
My company, FASTSIGNS International, is included in these measures. We are a franchise brand with individual units owned and operated by local entrepreneurs. Businesses like ours support other companies and organizations by providing signage and visual graphics for conferences, trade shows, events, point of purchase displays, and promotional advertisements. Suddenly — but understandably — demand for these services has dropped. Our business isn't alone. I am also the chair of the International Franchise Association. In the past weeks, I've watched the small companies that make up the franchise industry struggle with dwindling sales due to this unforeseen economic crisis.
Small businesses across America must weather the pandemic. They — we— are vital to the nation's economy. But in such an incredible crisis, how? Here are three ways entrepreneurs can protect themselves.
People aren't going to work, stores, restaurants, happy hour, or their nail appointments. You might catch a New Yorker or two popping into their neighbourhood bodega to re-up on the essentials, but that seems to be it. As COVID-19 spreads across the globe, every corner of daily life is being hit. Not least of all, as exemplified by the decimated stock market, businesses are now feeling the pain.
The COVID-19 pandemic is spreading rapidly, with new updates flying in every minute. As the situation evolves, many small business owners are unsure of what steps to take to mitigate risk, protect employees and support customers. The U.S. Chamber of Commerce offers a coronavirus toolkit with a compilation of the CDC's recommendations for businesses and workers across the country. Here are the key points and immediate steps the CDC recommends.
Protecting Your Business During A Pandemic
Protecting your business during this pandemic means much more than giving your business a good scrubbing. It also means preparing your business for the worst and keeping your staff well-informed.
Check Out This Post About Keeping Employees Productive During The Coronavirus Outbreak
Create A Plan
As coronavirus spreads, more businesses are putting safeguards in place to protect their companies and employees. An essential precaution many business owners are taking includes creating or revamping an emergency preparedness plan. If you haven't created a project yet, it's time to giddy up, employers!
An emergency plan not only outlines what steps your company plans on taking if an outbreak impacts your business. It also lays out what measures you're seeking to protect your employees and business before disaster strikes.
One of the critical challenges for small businesses is access to cash. Running any business is a risky endeavour; however, small businesses are particularly vulnerable. According to the federal government's Small Business Administration, only about half of small businesses last longer than five years. Overhead costs like rent, payroll, and utilities, leave very little liquid cash to owners, especially in the early years. Add to that the lack of revenue from slowing services and newly required benefits stemming from the pandemic, and our entrepreneurs will be devastated.
To combat this short-term challenge, small business owners should advocate for efforts to provide immediate liquidity and keep businesses solvent. Under one proposal, the "Small Business Workforce Stabilization Fund," the Treasury would forgive financial assistance provided to those small businesses which were solvent before the crisis, so long as the same number of employees are rehired within 12 months after the disaster. This program would provide immediate cash flow to the most vulnerable businesses, keep employees on the payroll, and allow companies to grow once customers return. The legislation would also increase the loan limit for SBA Express from $350,000 to $1 million. I believe proposals like this are critical tools to stabilize the market and provide relief for owners, workers, and their families.
Establish A Work From Home Policy, If Possible
If you don't have a work from home policy or plan, now is the best time to add one, my friends. With coronavirus in every state, businesses are finding alternative work arrangements to keep employees from coming into the office and avoiding contact.
Maybe you've tested the waters before and let employees work from home. Or, perhaps it's a whole new ballgame for your business. Depending on your industry and business, you may not be able to give employees the luxury of working from home. Maybe you don't have or can't afford additional equipment. Or, maybe employees need to interact with customers face-to-face as part of their positions (e.g., nursing).
If at all possible, consider establishing a work from home policy. Include things like employee eligibility, remote procedures, and guidelines. Also include rules for temporary remote work in your system.
With plenty of people already working remotely, there are a lot of free tools business owners can utilize so that teams can stay in touch and keep working even if they aren't in the same place.
Implement a remote work policy that covers when you expect your team to be online or available, how to communicate (via email, Slack, or video call, for instance), and what deliverables each team member is responsible for completing.
Keep Your Employees Posted
No one likes being left out of the loop, especially when something like the coronavirus strikes. When it comes to protecting your business, you must, must, must communicate with your managers and keep them up-to-date.
To keep your business safe during the virus's outbreak, you have to do your research. Check the CDC's website every day for more information about the outbreak. And, don't forget to check your state and local news for details about the spread and regulations about coronavirus (e.g., bans on mass gatherings).
After you do your homework, relay that information to managers and supervisors as soon as possible. That way, they are up to speed about the situation and where your business stands.
Just like managers and supervisors, you need to keep your employees posted, too. To communicate coronavirus-related news to your employees, you can send out memos or emails or have a mandatory company meeting (via video chat, of course).
At my accounting and payroll software company, Patriot Software, we are taking the coronavirus spread very seriously and keeping our employees up-to-date as much as we possibly can. Currently, we try to send out an email update or message to our team at least once per day to communicate coronavirus to employees and what precautions we're taking to keep them safe.
Filling in your staff not only allows you to keep them posted about your policies, but it also helps reduce workplace panic. The more your employees know, the better.
Everyone is facing this crisis together, so be transparent about what your business is going through. Customers can empathize with brands facing an emergency, as long as you communicate with them properly.
As Harvard Business Review reports, "When customers are separated from the work that's being done behind the scenes to serve them, they appreciate the service less, and then they value the service less." Describe the steps you're taking to mitigate risk and give them insight into the steps you're seeking to help the community.
Reduce meetings and travel
Try to keep opportunities for exposure to the virus to a minimum. Postpone any team meetings or hold them virtually. Skip any conferences or other planned business travel. If your workers get sick because of travel or meetings, you could have a liability issue on your hands, or you will have to manage low morale and ill leave requests.
Proposals in Washington calling for billions in aid to small businesses are enormous and may feel out of reach as we work from our towns, miles away from our nation's capital. But our voices are crucial in this moment of crisis, and we cannot leave big business to speak for us when it comes to an emergency stimulus or any economic policy that impacts us.
This can be done individually, and it can be done in partnership with other entrepreneurs; the mediums for engagement are endless. Social media, letters, email, phone calls are all effective ways to engage. The method is less important than the message, and the news is this: small businesses are the lifeblood of our communities and economy; we need relief in the midst of this crisis.
The small businesses within our communities provide jobs and economic growth to local economies. This is where most Americans are feeling the impact of the pandemic — our coffee shops, restaurants, gyms, and pet stores are all closed; our friends and family members are losing jobs.
It's time to take action. As the adage goes, an ounce of prevention is worth a pound of cure. In this pandemic environment, this wisdom is just as much for small business owners as it is for their patrons. Franchising stands to lose 26,500 small businesses due to COVID-19 alone, and the wrong legislation will raise the number of closures to 33,000. For small companies outside of the franchising industry, this number could be even higher. Accessing the capital you need and maximizing liquidity now are the most important things we can do to survive; getting that message to legislators who hold the key to our economic future is how we do it.
Check Out This Post About Recruiting And Hiring During The Coronavirus Outbreak
Schools across the country are closing, as are offices, stores, businesses and commercial centres. With the country slowly moving toward total lockdown, you will need to be flexible with your employees' time. Some team members may have to leave unexpectedly if their child's daycare closes. Others may have students who come home from school for spring break and aren't able to return. Try to be as understanding as possible when something comes up and have a contingency plan in case you suddenly become short-staffed.
One of the areas of the most significant risk to organizational security is business travel and meetings. These usually involve insecure Wi-Fi networks at airports and hotels, and opportunities for hacking, loss and theft.
Take Advantage Of Federal Relief
The coronavirus is making a massive dent in the business world and economy. But, there's no need to panic because small business relief is on the way!
The government is scrambling to pass legislation to help small businesses and individuals negatively impacted by the virus. This includes things like:
- Low-interest federal disaster loans
- An employer tax credit
- Federal income tax deferment
If your business is struggling to gather funds to cover business expenses due to the coronavirus outbreak, you're not out of luck. The government will be providing millions of dollars in funds for low-interest federal disaster loans, backed by the Small Business Administration (SBA).
Businesses can apply for an Economic Injury Disaster Loan to help cover expenses that companies can't afford due to the virus. This includes payroll expenses, accounts payable, and fixed debts.
In addition to low-interest SBA loans, the government is offsetting mandatory paid sick and paid leave costs (signed into law on March 18) for employers with an employer tax credit, equal to 100% of the benefits doled out. An income tax deferment extends the April 15 deadline for businesses negatively impacted by the pandemic, without penalties, for 90 days. This gives business owners the chance to use their income tax liability funds to cover other expenses. Keep in mind that you must currently still file your business income tax return by April 15.
Ensure access to capital
For franchise businesses, liquidity is just part of the equation. The cost of goods sold in the service industry is primarily wages paid to staff. Debt loads from Small Business Association loans are standard for small businesses and can create additional pressure on business owners. With demand down and paid leave provisions now a reality, layoffs are a real concern.
To help small businesses make payroll and cover expenses — including paid sick leave, paid FMLA, and loan repayment — a relief plan tailored to small businesses is in order. And in my view, the proposed $300 billion Restoring Economic Security, Confidence, and User Endurance (RESCUE) Businesses Act of 2020 would do just that. Under this proposal, the SBA would waive all fees for all 7(a) loans for one year for both lenders and borrowers and provide a 90 percent loan guarantee for all mortgages, no matter the size. The legislation would also increase the loan limit for SBA Express from $350,000 to $1 million and give local businesses the breathing room they need to remain in business and thus maintain staff in light of the health crisis.