Restarting Your Small Business

As I write this, businesses across the US have applied for the funding offered through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). They have navigated the loan process, are diligently following up with their lenders, and are attempting to access as much information, funding, and advice as possible to help their businesses stay afloat. It’s a trying time, and Dun & Bradstreet is committed to helping small businesses in their efforts to survive. As a former small business owner, I’m riding out this storm with my friends and family who have their own businesses. But also, as a former small business owner, for all my worry and concern, I’m an eternal optimist. During the 2008 financial crisis I had two small businesses in Detroit, Michigan that both survived, and I believe that many small business owners will come through this global crisis with a deeper understanding of their customers, the technology available, and their business overall.

In this article, I’d like to focus on what things could look like a few months or even a year from now, when we’ve weathered the storm, picked up the pieces, and are wondering what to do next. I want to talk about what we can do to prepare by proactively taking steps now.

Evaluate Your Business Relationships

Lenders – Take a look at your debt vs. income, your terms and conditions, and your relationship to your lender overall. Is this a relationship that makes sense for your business, or is there another institution that might help your business achieve its goals more effectively?

Customers – If your customers’ current needs aren’t apparent, reach out or send a survey (depending on your business and customer base) to get insight into what problems your business can help them solve.

Vendors – If your supply chain was disrupted during the pandemic, you’ve already had to look for alternate vendors, suppliers, or service providers. Now is the time to use the information you have from that experience and make a tiered list of what your business needs to be operational.

  • Tier 1 should be what you absolutely need in times of crisis. Given recent events, this list should come together relatively quickly. Can you create a list of additional suppliers or service providers so that you can pivot quickly if necessary? If your contracts are large enough, you might want to consider diversifying your supplier base for these needs so that if one of your vendors can’t deliver in the future, you can still keep your business running. You may have already taken steps in this direction, but if you were not able to during the crisis, you can prepare for the future by doing this now.
  • Tier 2 should include “nice to haves” that keep your customers engaged. Depending on your business, this list might include 24-hour customer service, five days a week or amenities in locations where you serve customers. You might want to create a list of alternative vendors or service providers for this group as well.
  • Tier 3 is nice-to-haves that make it easier for your team to do business. An example here could be a project management software that helps your team work together but isn’t lynchpin to your operation. For this tier, you have the option of creating an alternative vendor list, but more important, this list can be used in your cash flow evaluation and emergency planning when deciding what you can cut and how quickly. You might also consider where a service or product falls on the list when you renegotiate your contracts with vendors or service providers – does the cancellation policy or out clause allow you to be nimble in times of crisis?

Community – Most likely, your entire community will be working to get back on its feet. Look for where your business can give back or show appreciation for customers, partners, and friends that supported your business during the pandemic. You might also be able to find other businesses you can form an alliance with that either are offering services you need to get back on your feet or need the same services you do.

Overall – In your market, which other businesses are open and which are not? Some regions might still be on lockdown, or some might have been up and running for a while. The latter businesses might offer some interesting learnings as far as what works and what doesn’t when restarting.

Evaluate Your Cash Flow

“Cash in, cash out” might seem simple, but a lot of companies struggle with getting an accurate picture of their cash flow. Look at your payroll, rent, and overhead costs and the debt that your company is carrying. Knowing what a typical year looks like and having experienced disruption, how do you want to manage your cash flow moving forward? What can you realistically change and what do you need to learn how to work around? Mentioned above, examining your relationship with your bank is one example – what terms and conditions is your bank offering you? What are the rates on your credit cards?

Investigate New Technologies

You may already be leveraging new-to-your-business technologies as a result of pivoting during the pandemic. Once the storm has passed, consider looking at how technology can further help your business. Are there new point-of-sale systems that could help you be nimbler in the future? Are there plug-ins or widgets you could add to your site to help your visitors find what they’re looking for quickly and efficiently? Business innovation is moving at an incredible rate and finding the right solution might seem overwhelming. You can use the evaluations you’ve done already to pinpoint where a change or improvement might help your business and look for that solution specifically. For example, there may be fintech that could help your company improve cash flow.

Create an Emergency Plan

While your business needs an emergency plan in case of evacuation, fire, flood, or another immediate disaster, you also need a plan in case you have to cease operations for a period of time.

  • What operational costs will you need to continue to make good on?
  • Where can you find immediate cost savings?
  • Are there ways you can pivot production or delivery so you can continue to fulfill your promises to your customers and partners?

I’m a huge advocate of checklists – pilots have checklists that they know by heart and go through before they take off – and putting a checklist together before an emergency can help you deal with both the immediate and the long-term challenges more quickly and effectively.

And finally, I would advocate that you stay flexible. Opportunities can come from the most unlikely places, and you may find that recent events push you to explore new product sets, new ways of working with customers, and new technologies. Being open to change and nimble will help you see solutions you might not have considered otherwise.

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