Your small business and COVID-19 questions, answered
NEW YORK (Reuters) – Small businesses are among the hardest hit as the coronavirus pandemic continues to cause economic uncertainty in communities across the United States.
FILE PHOTO: A deli is seen closed, due to the outbreak of the coronavirus disease (COVID-19) in the Brooklyn borough of New York City, U.S., March 26, 2020. REUTERS/Stephen Yang/File Photo
As some state economies begin to reopen, we invited a group of small business experts to return for a follow-up discussion as part of our #AskReuters Twitter chat series.
Below are edited highlights.
Why and how have small businesses been impacted by this pandemic?
“Many small businesses have been disproportionately impacted because they do not have the cash reserves and borrowing power to sustain their operations and their business models are not always designed to generate monthly recurring revenues.”
— Bob Chalfin, lecturer in management at The Wharton School of the University of Pennsylvania
Many small businesses are still waiting for federal aid. Any tips on cutting through red tape and staying afloat?
“I’m hearing that Paycheck Protection Program (PPP) loan processing time has improved considerably recently, so there may be hope. Also consider local and state funding; many cities are offering cash grants and other support for local businesses.”
— Janet Alvarez, executive editor of Wise Bread
In addition to federal aid programs, what more can policymakers, financial institutions and even consumers do to respond to the needs of small businesses?
“If there was ever a time for rules to be broken, suspended, and rethought by lenders, landlords and credit agencies now is the time. See what all of those above can do to help.”
— Michael Sherrod, entrepreneur-in-residence at Texas Christian University Neeley School of Business
When it comes to aid and loans, there is some confusion about what needs to be paid back and when. How should small businesses approach their repayment plans?
“Carefully! Keep a close eye on your working capital ups and downs (and seasonality) as you plan out cash flow. Don’t be afraid to ask your bank to slow down your repayment schedule if you can demonstrate need – but being on top of your numbers is key to make that ask!”
— Tom Schryver, lecturer at the Johnson Graduate School of Management of Cornell University
What are the biggest mistakes you have seen small businesses make since the crisis hit?
“The biggest mistake I have seen is panic based on rumors. The situation is changing so fast that rumors abound. Stay informed, check rumors out with your network.”
— Tom Sullivan, vice president for small business policy at U.S. Chamber of Commerce
What are some of the smartest moves you have seen small businesses make in the midst of the pandemic?
“Some of the smarter small business owners rapidly adapted to messaging, such as by reaching out via social media or cold calling customers, letting them they are still open, for example, for take out home delivery.”
— Kashif A. Ahmed, founder and president of American Private Wealth, LLC
For many small businesses, reopening will be akin to opening for the first time. What advice do you have to plan – and pay – for reopening?
“Reopen in stages. Lay out a schedule to ramp up. Business is likely to be slow at first. Better to run out of product than to have too much early on. Coordinate with vendors & suppliers to have the product you need at each stage. Focus on cash flow.”
— Carl Peterson, vice president of small firm interests at the American Institute of CPAs
As the economy starts to reopen, what are the key changes small businesses will need to make to succeed?
“Understand your customers and adjust to meet their needs, including providing a safe environment for staff and patrons. Focus on customer satisfaction and quality – volume may be down, but there’s an opportunity to make each transaction more profitable.”
— Mark West, national vice president for business solutions at Principal
When it comes to small business, what are you optimistic about right now?
“Ingenuity and hard work are defining characteristics of small business owners. If we give them the tools to rebuild — a New Deal for small business — they will create jobs and economic activity on our Main Streets and lead the country out of the Great Lockdown.”
— Jacob Haar, managing partner of Community Investment Management
Editing by Lauren Young and Richard Chang