Navigating Uncertain Times: How to Pivot Your Small Business for the Pandemic
These business pivot tips from industry experts will help businesses survive during and after the coronavirus pandemic.
Air Date: October 13, 2020
Moderator: Jeanette Mulvey, Editor-in-Chief at CO—, U.S. Chamber of Commerce
Featured Guests: Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce, Kelsey Brugger, Reporter, E&E News
The coronavirus pandemic has impacted businesses all over the world, but small businesses in particular have had to adapt quickly to the many massive changes this year to stay afloat. While a vaccine has been approved and businesses are starting to look forward to a post-pandemic return to work, businesses are still far from normalcy and must continue to pivot for the uncertain future.
To help small businesses through these unprecedented times, CO— hosted a panel of legal and economic experts to discuss how small businesses can continue to operate and even flourish during the ongoing pandemic. Here are three ways small business owners can pivot to keep their companies running.
While Waiting for Additional PPP Loans and a Fourth Stimulus, EIDL Loans are Still Available
While the second batch of PPP loans and the fourth stimulus package are still under negotiations between House Democrats, Senate Republicans and the current administration, Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, believes the PPP program will reopen and small businesses will be able to apply for a second loan in the near future.
However, for businesses that need a more immediate or urgent financial boost, Bradley recommends the EIDL loan program, which is still open.
“The main difference between EIDL and PPP is EIDL operates like a normal loan — you [have] to pay it back,” said Bradley. The [great benefit of the] PPP program … is that, while it was a loan, if you use the proceeds from the loan for certain qualifying expenses, namely, retaining your employees, you could have the loan forgiven.”
Many business owners are starting to apply for PPP loan forgiveness during this time, especially those who received these loans early in the process. To accommodate businesses who acquired loans of $50,000 or less, the Treasury and SBA have announced a simplified PPP loan forgiveness process.
Be Transparent When Negotiating With Creditors and Landlords
One of the biggest hardships small businesses are facing is the inability to pay back creditors and landlords. Lenore Horton, a partner at FisherBroyles LLP, said it is best to be transparent about your COVID-related financial struggles while negotiating a more reasonable repayment plan.
Horton has helped clients draft letters and craft communications to their creditors to explain what the business is doing to generate new revenues and how they're looking to pivot. That way, the creditors have insight into how the business is working to pay them back.
“Radio silence is probably not going to be a confidence-building measure for those you owe money right now,” she said. “Being proactive and having a degree of transparency is important.”
You’ll Have to Pivot Your Business to Stay Alive and Relevant
In such unprecedented times, the best thing a small business can do is pivot their offerings and diversify their income stream. For example, Manny Cosme, president and CEO of CFO Services Group, spoke about how one event space business he worked with began doing live remote events rather than in-person gatherings, while another leveraged their workforce and resources to offer events-based cleaning services. They retrained their staff and pivoted from doing events to sanitation and cleaning.
Cosme said there are three ways to look at how you can diversify your revenue stream: what you sell, who you sell it to and how you deliver it.
“The more you can diversify along those three channels … the more diversified you'll be,” he said. “As you start to change one channel, all of a sudden you have a new revenue stream that you developed — and so it actually exponentially grows.”