Reopening Your Small Business: A California Guide

As the curve of the coronavirus cases in California is flattening, focus has shifted from how to contain the deadly virus to how the 2nd largest city in the U.S. might reach a new normal.

We’ve compiled information you need to know for a successful – and healthy – return to business in California.

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When will California reopen?

Gov. Gavin Newsom issued a stay-at-home order on March 19 that had no set end date. But the state is gradually reopening on a county-by-county basis.

On May 4 the state announced some retailers -- clothing stores, florists, and bookshops — will be allowed to reopen with curbside pickup and physical distancing. Associated manufacturing and supply chain for those retail businesses will also be able to get back to work.

Newsom said May 20 that more than half of the state’s 58 counties are moving further into ‘phase two’ of the state’s four-pronged approach to reopening.

The governor said 33 counties have begun to move forward. These counties have reached criteria which includes no more than 5% increase in hospitalizations over a week-long period and fewer than 25 coronavirus cases per 100,000 residents.

Detailed information can be found on the official California website.

What are California's reopening stages?

It’s reported that California plans to reopen its economy in four phases:

  • Stage 1: Everyone is either staying at home or a member of the essential workforce
  • Stage 2: Reopening lower risk workplaces, including:
    • Non-essential manufacturing (toys, furniture, clothing, etc.)
    • Schools
    • Childcare facilities
    • Retail businesses for curbside pick-up
    • Offices where working remotely isn't possible, but can be modified to make the environment safer for employees
  • Stage 3: Reopening higher risk workplaces, which require close proximity to other people, including:
    • Hair salons
    • Nail salons
    • Gyms
    • Movie theaters
    • Sporting events without live audiences
    • In-person religious services (churches and weddings)
  • Stage 4: Ending the stay-at-home order, which would allow for the reopening of:
    • Concert venues
    • Convention centers
    • Sporting events with live audiences

These stages include guidelines of the use of masks when out in public. Up-to-date face covering guidance is available on the California Department of Public Health website.

Employers reopening priorities

Reopening your small business probably won’t be as easy as switching on the lights and welcoming employees back to the office.

HR experts expect employers and employees to experience a new environment, perhaps long term, rather than business as usual once the pandemic lessens.

Not only will small business owners need to consider measures to ensure the health and safety of their returning workforces—phased-in returns to the workplace and physical distancing, for instance—they also may encounter greater employee demand for flexible hours, remote-work arrangements, and generous paid sick leave as part of the new normal. If you’ve been in California during the shut-down, you’ve likely noticed the dramatic drop in traffic and cleaner air. This may encourage some business owners to change their business operations. Additionally, Many business owners are finding that productivity by employees has increased

What to consider when deciding to reopen

Employers should stay on top of the news so they will be prepared and compliant when allowed to reopen. If you’re operating a small business in California, here are details to consider.

Regional considerations

There are 58 counties in California that may have slightly different guidelines put in place. Regional variances allow some areas to move even more quickly into later stages of operation modification.

Certification of the following:

  • No greater than 5% increase in COVID-19 hospitalizations over a 7-day period
  • Less than 8% of residents test positive for coronavirus over a 7-day period

An ability to resume "normal" operations include:

  • The severity and volume of COVID-19 cases within their locale.
  • Whether the business has a physical location.
  • The ability to enforce proper social distancing (at least six feet between individuals) within the business location.
  • The level of contact with customers and other employees (e.g., beauty salons and gyms with direct physical contact vs. retail stores and restaurants with indirect contact).

Actions to take when reopening your California business

Here are steps to consider when opening your business in California:

1. Re-think your budget

Budgeting takes into consideration what you spend and what you earn. If your income has lessened because of the coronavirus business shutdown, you simply can’t continue to budget your money the same way. Determine where you can cut back or even eliminate expenses. If you’re able to operate effectively remotely, giving up a rent payment can offer financial relief.

2. Explore outside funding

Look into SBA 7(a) loans, grants, and state, regional or city emergency relief opportunities.

3. Negotiate with vendors and suppliers

There are vendors and suppliers who might be easier to negotiate with if your cash flow is impacted. It’s a good idea to tackle the low-hanging fruit first before you spend time and energy on businesses that might make negotiations difficult.

More flexible:

  • Manufacturers
  • Direct service providers
  • Corporations or large companies
  • Financial institutions (banks, credit unions, etc.)
  • Large contracts

Less flexible:

  • Distributors
  • Small Businesses
  • Private landlords
  • Small contracts

For a complete guide on negotiations in light of the pandemic, visit the SmartBiz Small Business Blog: How To Negotiate With Lenders and Suppliers During COVID-19.

4. Put office safety measures in place

Create your Injury and Illness Prevention Program.  The IIPP is a basic written workplace safety program.  Every employer in the State of California is required by law to develop and implement an effective IIPP.  Cal/OSHA has created an e-tool to assist employers create theirs.  That e-tool can be found here.

Cal/OSHA provides a Consultation Service to employers through on-site visits, telephone support, publications, eTools, and educational outreach.

You should also put testing for symptoms of the virus in place. Testing should be administered in the least invasive way possible, like utilizing temperature guns or forehead temperatures. If a medical professional or person with medical training is available, have them administer the temperatures. If somebody with medical training is not available or onsite, the company should consider whether managers within the organization may be trained to administer and read whatever testing mechanism the company uses. Finally, testing should be administered based on legitimate and nondiscriminatory business needs.

Cal/OSHA is always adding and updating workplace safety publications to their website as well to help employers as well.  Everything from construction safety, to ergonomics and bloodborne pathogens is covered at the Cal/OSHA Publications page.

5. Continue customer communication

Whatever you decide to do during the coronavirus crisis, don't stop communicating with customers. Share via email, social media messaging, and other channels how you are staying in operation and what your plans are if you have to temporarily close. Share with customers what you are doing during the quarantine. Let people know as soon as you plan to open again. Your customers want to support you, and communication can help them keep your business in mind.

6. Keep open communication with employees

This is a very stressful time for American workers. Being in the dark about their employment status can cause additional distress. Be sure to be open and honest with your employees about the current business situation and your plans for opening up. Let them know the steps you are taking to keep your business going after the pandemic.

7. Establish anonymous reporting

To maintain a safe work environment for on-site employees and customers, companies should create an anonymous complaint channel for employees and customers to report unsafe practices or violations of protocol during this COVID-19 period.

Final thoughts

The facts, laws, and regulations regarding COVID-19 in California are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.