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- How to Rebuild During the Coronavirus Pandemic 2021
The COVID-19 outbreak has caused financial havoc around the globe, leaving many U.S. small-business owners struggling to survive or rebuild. Check out our Impact of COVID-19 on Small Business infographic with important – and depressing – statistics about the pandemic.
While the short-term outlook varies by industry, consider what recovery for you will look like once the economy begins to return to “normal” – or the new normal. If you’re not sure what your strategy should include while rebuilding, strategies to help with getting your business back on track are outlined here.
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Redefine business plan
Your initial business plan may have been an effective road-map pre-pandemic, but while rebuilding, you might have to make edits.
Consider how you can pivot to the new economic normal. An important element of your business plan is the industry analysis. You’re not the only one being affected. Research what other in your space are doing to survive or attract new customers. Look into trends and determine if product or service changes could help your business.
Clearly lay out your brand’s strengths and weaknesses. What was working before? What didn’t work? How can you adjust?
If you don’t have a business plan, the SmartBiz Blog is here to help: How to Write a Business Plan Without Going to Business School.
Re-calculate profits and losses
Calculating the profit and loss of your business help you make decisions.
Additionally, a P&L statement is important because it is required by the IRS and may be required by lenders.. It’s the record of a business’ operation that is used to assess taxes on profits earned. Review our article to learn the process: Business Profit And Loss: Tips To Prepare Your Statement.
Consider workforce reductions
Short-term and long-term workforce reduction to save on business costs and may be necessary due to the economic and operational impacts of the COVID-19 emergency. Although no likes to lose a job or have hours decreased, business owners often have to make tough decisions.
Here are routes you can go:
Temporary layoff policy
A temporary layoff may be required because of events resulting in a temporary lack of funds or work.
Voluntary temporary layoffs during COVID-19
Temporary layoff programs, allow employees who are willing to take a furlough or temporarily reduce their hours to do so.
Furloughs and temporary full-time reduction
Answers to frequently asked questions about furloughs and temporary FTE reduction.
Suspension of non-essential hiring
This applies to recruitments for regular and limited term classified non-union, contract covered, and professional staff, temporary staff positions, regardless of funding source and work location.
Take advantage of the calendar
You should have a solid marketing and social media strategy outlined for 2021. But you may be missing some good opportunities. Be sure to have high-profile shopping days like Black Friday on your calendar but don’t forget to explore the more obscure days and weeks like Love Your Dog Day or Coffee Appreciation Day.
We’ve put together a comprehensive list of calendar observations 2021. Here are some strategies to get your creative juices flowing.
If your cash flow has been relatively steady, you could qualify for an SBA 7(a) or Bank Term loan. Here’s basic information if you’re exploring these types of funds.
The 7(a) Loan Program
If you qualify, the Small Business Administration’s low-cost loan programs can be your best option. SBA 7(a) loans have low rates, long terms and very low payments to fuel stability, growth and savings.
An SBA 7(a) loan can be used for a variety of purposes including:
- Working Capital – Purchase equipment, add marketing programs, for operating expenses, or to hire additional staff. For additional information, read What is Working Capital in Small Business.
- Debt Consolidation Loans – To get up and running, a bakery owner might have relied on expensive debt. An SBA 7(a) loan can be used to refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards. Learn more here: Refinance Your Business Debt by Learning More About Refinancing.
- Commercial Real Estate – Refinance an existing commercial real estate mortgage or purchase a new space for your center. Learn more here: Commercial Real Estate Loans.
For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz Small Business Blog and review our comprehensive article: What is an SBA Loan?
Bank Term loans
SmartBiz currently offers term loans through its bank partners for working capital, debt refinance, and new equipment purchase:
- $30,000 to $500,000 loan amounts
- 2 – 5 year repayment terms
- Fixed interest rate *
- Monthly repayments
- No pre-payment penalties
*Interest rate depends on loan term and the applicant's credit and financial profile.
Learn more about Bank Term loans available through the SmartBiz bank network: Bank Term Loans.
Typically, these loans offer up to $500,000, a monthly or bimonthly payment schedule. It typically takes two to three weeks to get funding with a medium-term loan. Medium-term loans are available both from banks and alternative online lenders. It’s important to demonstrate good credit and cash flow.
SBA resources during the coronavirus pandemic
If your small business is desperate for some cash to stay afloat, consider these SBA coronavirus loans:
- The Paycheck Protection Program (PPP): These loans offered in early 2020 and into 2021 help small businesses retain employees and cover approved expenses throughout and after the COVID-19 crisis. PPP loans may be partially forgivable. Be sure to apply before the May 31, 2021 deadline. Start an application now as the program will end if funds are depleted.
- Economic Injury and Disaster Loan (EIDL) and Loan Advance: EIDLs are low-interest loans up to $2 million that help small businesses pay for expenses that could have been satisfied had the disaster not occurred.
- Emergency Economic Injury Grant (EEIG): Under the EIDL program, companies that qualify may apply for an emergency cash advance for up to $10,000. Money from this advance used on payroll-related expenses will be converted into a grant, meaning you won’t have to repay it.
- SBA Disaster Relief: This program provides relief to borrowers who already have non-disaster SBA 7(a) loans by covering all loan payments for the next 6 months (including principal, interest, and fees). Businesses that take out new loans before September 25, 2020, can also claim this benefit.
- SBA Express Bridge Loans: Small businesses affected by COVID-19 that already have a relationship with an SBA Express Lender qualify for an SBA Express Bridge Loan. These loans are up to $25,000 and have maximum terms of 7 years. You can use this immediate financing while you wait on your EIDL.
With a solid plan in place and creative strategies, you can emerge from 2021 ready to rebuild. For additional information during the coronavirus pandemic, visit the SmartBiz Small Business Blog. We have articles about funding, employee management, rebuilding your business, and crisis communication.