Disaster Preparedness Economy Operations

COVID-19: Practical actions small business owners can take now

A restaurant owner converts to takeout but let go of most of his staff. An event planning company suddenly has no work for the next six months, and neither do the caterers she hires. A small manufacturer can’t find key parts needed to fill even its pending orders.

The coronavirus outbreak is already devastating small businesses.

Because so many small businesses lack the cash reserves and credit that’s typically available to larger companies, they are the most vulnerable to disasters like the coronavirus pandemic. A very recent survey (March 16-17) by Goldman Sachs of 1,500 U.S. small businesses found that 96% are already feeling an impact and 51% say they won’t be able to continue operating more than three months due to economic strain.

By some estimates, between 170,000 and 200,000 small companies failed during the Great Recession. Some experts say the economic toll on small business could be higher amid COVID-19.

South Florida, unfortunately, is particularly vulnerable.

A study by JPMorgan Chase found that 51.9% of Miami metro area businesses have a cash buffer of less than 14 days of typical cash outflows — more than the national average –and just 31.5% have more than 21 days.

Small business is a huge player in Miami-Dade’s economy. According to the “Small Business. Big Impact” report authored by Florida SBDC at FIU, in 2018 53.3 percent of Miami-Dade’s workforce is employed by 82,293 small businesses around the county.


Small businesses have one big advantage over their corporate brethren: They can be nimble. They may be able to adjust their business models, incorporate an additional revenue stream, move business online more quickly, or start or join a creative community approach to surviving and thriving.

What are some practical steps  small businesses can take now? Here is some advice for small business owners and CEOs of SMBs. Not all will apply to your business and its challenges, but many likely will.

  • Make sure your employees know how important they are and that the company is very concerned with their health. Implement procedures to reduce the likelihood of infection, including work from home arrangements.
  • Communicate early and often with your employees,  your customers, and your suppliers/vendors about your status and any changes that will impact them. Don’t forget to ask your employees and customers what they need from you. Listen.
  • Monitor your business’ cash flow on a daily basis. Prepare a 13-week cash flow, forecasting anticipated cash income and your needs in the next quarter as well as fully reviewing fixed and variable expenses. Consider accelerating collections, delaying payables, and defensively drawing from your line of credit, if available. Delay capital expenditures and longer-term strategic projects until after the crisis subsides.
  • Check with your suppliers, identify contracts implicated (force majeure event), and determine key financial risks including a landlord, bank and vendors.
  • Review your insurance policies. Many insurance plans don’t cover pandemics or disease, but it’s worth a review of your policy or a call to your agent to be prepared. Understand whether you carry business interruption insurance or other relevant coverage. Keep detailed records on the scope of your business interruption as well as other damages.
  • Be aware of vendor limitations and proactively line up alternative vendors for critical supplies.
  • Consider asking your vendors to increase the time on your payment terms. If you don’t have terms at all, start by asking for 30-net. If you have that, ask for 60 days.
  • Create or review HR policies to make sure they fit any potential outbreak disruption. This includes PTO time, sick leave and work from home opportunities. Consider modifying policies as needed.
  • Assess your ability to support alternative work arrangements including working from home, staggered shifts, and reduced hours. Have patience, especially with new work from home employees and situations. Remember, they are likely also home with their children. Flexibility is key. Can they work early in the morning and late at night instead of the traditional 9-5?
  • Continue to invest in marketing in a strategic way, but focus your messaging to align with the times. In times like these, people want to help small business, so consider emphasizing the shop small/shop local message.
  • Now is the time for innovation and creative thinking. Keep the lines of communications open. Listen to your employees and empower them to solve issues and bring solutions to you.
  • Consider ways to partner with other small businesses that bring you both mutual benefits. For example, a large sit-down restaurant needs to layoff most of its staff because it was ordered to close; a grocery chain needs to staff up to meet demand during the crisis. This partnership already happened between Versailles and Sedano’s.

BRIDGE LOANS: The state of Florida has activated the Florida Small Business Emergency Bridge Loan Program, which offers short-term (up to one year), interest-free loans for up to $50,000. These are aimed at helping bridge the gap between the time the economic impact occurred and when a business secures other financial resources, including payment of insurance claims or longer-term Small Business Administration (SBA) loans. READ MORE HERE. 

SBA LOANS: The Small Business Administration activated its disaster loan program for Florida small businesses and is providing low-interest loans to small businesses impacted by the coronavirus. The loans, up to $2 million with a 3.75% rate (2.75% for non-profits) for up to 30 years, are now available to Florida businesses. The SBA website to apply is s disasterloan.sba.gov/ela.  READ MORE ABOUT THEM HERE.

WEBINAR: On March 26, Florida SBDC at FIU is hosting a 30-minute webinar titled “SBA Disaster Assistance & COVID-19”.  This webinar will discuss the SBA Economic Injury Disaster Loan program and provide a walkthrough on the online application process.  Register here:  go.fiu.edu/assistance

RESOURCES: Florida SBDC at FIU has compiled a comprehensive list of resources to help you navigate these black swan days. CHECK OUT AN UPDATED LIST HERE.

Let us know what strategies are working for you. Email me at ndahlbergbiz@gmail.com if you have a strategy or advice to share. We’re all in this together.

Please send GrowBiz topic suggestions and feedback to GrowBiz@FIU.EDU.

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