Small businesses have experienced quite a difficult stretch during the coronavirus pandemic. As cities and local governments lift the most extreme restrictions, many are hopeful that there are brighter times ahead. However, savvy small business owners focused on making the best of this time are finding new ways to earn income during COVID-19.
According to the U.S. Chamber of Commerce, nearly one quarter of small businesses shut down temporarily as of early April. Some that don’t rely on in-person interaction have adapted by working from home. Others, with less luck, have tabled business for the time being, with the hope of resuming business as usual later.
While you may not face the same challenges as a business across the street or the country, there are a few strategies you can follow to keep earning income during COVID-19.
Whether business is booming or you’re steering through choppy waters, cash flow management is crucial. Cash flow management during the coronavirus pandemic is a different story.
If your business is temporarily, partially or fully closed, you’re likely experiencing a cash flow shortage. You may not be able to stabilize your cash flow, but there are a few steps that can push you in the right direction.
Start by evaluating your expenses, and cutting out the ones that aren’t useful, or simply don’t make sense at the moment. Cut out functions like advertising, which will generate leads you may not be able to convert given the conditions.
If you have rent, mortgage, or other debt payments, inquire about deferring them. Many companies are open to making arrangements. Even if it won’t fully solve your problem, every bit helps.
As time goes by and your business slowly ramps up, be sure to bring back employees on an as-needed basis. Payroll tends to account for a significant amount of cash flow issues, and strategizing about how to spend this money can go a long way. Tightly managing payroll costs will help you earn income during COVID-19 without overbearing expenses.
It likely won’t account for the entirety of your cash flow deficit, but government funding can prove quite beneficial for earning income during COVID-19.
The Paycheck Protection Program, also known as the PPP loan, is a 100% forgivable government funding program that gives you the cash you need to keep employees working while waiting on delayed income. This incentive helps you make payroll, while also retaining your roster of employees to prevent job losses.
Provided you follow the loan forgiveness guidelines, which primarily ensure that this money is put toward payroll (with only a 25% allotment for other operating costs), this is 100% forgivable.
The PPP loan is the most popular coronavirus incentive, but far from the only one.
The New York Forward Loan Fund (NYFLF) is another option for NY-based businesses. Unlike the PPP loan, which is designed to help small businesses keep cash flow steady while shut down, the NYFLF aims to help small businesses reopen.
This funding can be put toward any expenses involved in reopening, such as inventory, marketing, and compliance with new changes. It’s not forgivable, but cash on hand could be just what you need to keep earning income during COVID-19.
Business lines of credit are essential in a pinch. If you have an existing line of credit, then now’s the time to draw it.
Having an open line of credit is one of the best strategies for recovering from cash flow dips. With a business line of credit, you can put cash toward all the expenses you have on hand, including payroll, operating expenses, and more.
If you don’t have an existing line of credit, be sure to apply for one once things turn around. You’ll only pay interest on the amount you draw, and more funding will become available as you pay it down.
Reopening can mean a lot of different things, depending on your industry and location.
For restaurants, it might mean outside dining only, until coronavirus numbers drop to a certain point. In retail, it might mean increasing store capacity. Office managers may have to drastically change floor plans to reduce contact and germ transmissions, including shields, more space, and other precautions.
Before risking infections or fines, get ahead of the curve by implementing these precautions now.
It can be a hefty expense, but preventing future transmissions in your workplace is an investment in your team’s safety, and not to mention, customer loyalty.
By decreasing the chances for virus transmissions, you’re proactively preventing future shutdowns.
Aside from your primary business model, how else can you earn income during the coronavirus shutdown?
During the winter, many landscaping companies turn to snow removal to keep things steady. There’s no reason you can’t apply the same principle here to drive cash flow.
Based on the resources and skills at your disposal, try searching for creative ways to earn additional income. Consider what your customers want (and need) most, and take it from there.
For example, adding hot items—like gloves, hand sanitizer and masks—to your shelves might be the boost you need. Pivoting from a dine-in restaurant model to family dinner packages can also be quite lucrative, and easy to market.
Pay-per-click advertising might be off the table due to high costs, but what about other organic (unpaid) channels? Marketing during the coronavirus requires a different outlook and set of tactics than normal times.
Posting on social media is a simple and easy way to market your business and keep earning income during COVID-19.
You can spread the word about new products and/or services, updated hours, cleaning policies, and more.
Also, be sure to update your website with any relevant information that your customers might find helpful, compelling, or reassuring. Chances are, before customers visit your physical storefront, they’ll investigate your business online. Posting the information they need puts you one major step ahead of competitors.
There’s every reason to be confident about what the future holds in a post-pandemic world. Nonetheless, it’s crucial to remember that, while numbers have gone down, they could spike again.
If they do, you’ll already be way ahead of the curve, with a stronger understanding of preventative tactics and how to adapt.
When it’s possible, start setting aside cash to use in the event that a second wave of infections occurs. Even a little bit of extra cash on hand can go a long way in helping you earn income during COVID-19.
You don’t have to manage your business while tracking income and expenses during COVID-19. WIth National’s bookkeeping service, you can manage your business with confidence that your records are up-to-date.
Utilizing a cloud-based platform, our team of bookkeeping experts will record, manage and analyze your business’s expenses. Based on the numbers, we can help you generate reports and find insights about where your business should go.
Get started by applying now!
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Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!