Small businesses have been among the most negatively impacted sectors in the United States during the global health crisis. As of May of 2021, 34% of small businesses in the U.S. were still closed due to the pandemic –– all the more alarming when you consider that 99.9% of all U.S. businesses qualify as “small.” Though vaccine rollouts have made it safer for customers to engage with businesses, the sector still has a long way to go when it comes to recovery.
To protect themselves financially amidst unexpected circumstances both now and in the future, businesses need to formulate thorough plans and strategies for dealing with emergencies. Building emergency funds, investing in digital tools, strengthening employee connections, and researching federal assistance options are some of the ways businesses can stay prepared for times of crisis. Below, we’ll look deeper into some of these strategies.
Offer Work-From-Home Options
Offering work-from-home options will give your business many benefits, especially during difficult times. Amidst a global crisis, wherein finances are turbulent, running your business remotely can make operating costs, including payroll, more manageable. Moving to a partially digital workspace helps businesses save on the cost of rent, utilities, cleaning services, supplies, and food. It also allows businesses to hire top talent, regardless of location. Finally, work-from-home setups improve employee satisfaction as well, helping those employees to better manage the stressors brought on by the crisis –– which in turn improves employee output and productivity.
Invest in Digital Tools
Building off the above point, any business that aims to offer work-from-home options needs to invest in the right digital tools. Even businesses that maintain in-person operations can benefit from having a greater presence in the digital sphere. After all, the pandemic has forced many consumers to rely on the internet for information on which products and services to buy. Using solutions such as digital marketing, social media, and email marketing will put your business on the radar of consumers even when crises prevent you from having an in-store presence. Similarly, a website (or app) optimized for mobile users will allow a wider range of consumers to access information about your brand and offerings.
Build an Emergency Fund
A lack of cash on hand could prevent your business from staying afloat during times of crisis. It’s thus important for businesses to build emergency funds that will allow them to operate when cash flow is tight. An emergency fund can prevent you from dipping into personal funds or relying on expensive credit lines.
Establishing such a fund is easier said than done, but experts recommend setting aside upwards of three months’ worth of operating expenses if you’re able to. Emergency funds can also be placed in money market accounts, which hold large amounts of cash and grow savings faster than regular bank accounts. If your business lacks the capital to open a money market account however, it’s best to open a business account at a bank to keep your funds liquid.
Research Federal Assistance Options
The U.S. government offers many assistance programs for small businesses in times of crisis. These include a paycheck protection program, which can give businesses the financing they need to continue paying their employees, as well as small business tax credit programs, which reduce tax costs in times of crisis. Small businesses may also be able to seek help from financial institutions under the Emergency Capital Investment Program, which supplies institutions with the capital needed to provide loans, grants, and forbearance for small businesses.
The pandemic has made it difficult for many businesses to stay afloat, and unfortunately it’s not behind us yet. Crucially however, cost-saving strategies like the ones discussed here can help businesses survive and thrive amidst the turbulence. Connect with Welcome Wagon and read more on how we can help your business in times of crisis!