What a difference a week makes.
Last Saturday my wife and I attended a Broadway show in New York City and had dinner at a popular Italian restaurant in Times Square, taking the commuter train to and from our home in Connecticut. We were planning a vacation in Florida this week.
Today all of Broadway is shut down, as well as the NCAA and NBA playoffs, the PGA tour and just about any activity involving large gatherings of people. People are afraid to travel on public transportation. We canceled our vacation, flight, hotel reservations and car rental.
In less than a week, everyone in America has turned as reclusive and paranoid as Adrian Monk.
Make no mistake: The negative impact of the novel coronavirus on the American economy will be huge, and America's small businesses will bear the brunt of it, especially those that depend on the following for their livelihood:
— People assembling in one place (restaurants, bars, gyms, theaters).
— People traveling on airplanes (airport concessions, limousine services).
— People going on vacation (travel agents, tanning salons, body waxing).
— Large-scale events (vendors and concessionaires at sporting events and rock concerts).
— Physical touching of other people (spas, hair stylists).
No one (myself included) knows how long this will last, but here are some suggestions to help small businesses weather the storm.
Stay Alive Until June. During the next couple of months, people will be hunkered down, but that can't last forever. We may not be out of danger by June, but two things are probable:
— The risk of infection will be lower then, both because of people's self-quarantining and predictions that the virus will be less transmittable during the warm summer months (see the NPR article "Can Coronavirus Be Crushed By Warmer Weather?"), encouraging more people to get outdoors and patronize local businesses.
— Having caught up on testing by then, we will know much more than we do today about how the disease runs its course, and should be in a much better position to predict a return to normal economic activity.
Do Everything You Can to Maintain Cash Flow. You may not be making a profit for a while, but if revenue dries up completely, you die fast and hard. Do everything you can to keep money coming in the door.
If you are a restaurant or bar, start doing home delivery. Don't wait for orders from the self-quarantined to come in via UberEats. Get your wait staff (or that 20-something in your basement) in their cars to deliver all orders. Do an email blast to your regulars. Get on your social media and offer free delivery, volume discounts or a free roll of toilet paper (hey, you probably have a stockpile of these, and no one will be using them) as incentives.
If you are an event organizer or tour operator and people are canceling, keep refunds at a minimum by offering customers credit for the same or a similar trip within the next year at no additional cost.
If you run a grocery store, let your customers know via email when high-demand merchandise will be restocked, and offer them home delivery on a first-come, first-served basis.
If you are a professional speaker, offer your best programs as webinars.
If you are a spa or other luxury service, sell gift cards without an expiration date.
If you sell clothing or other merchandise at retail, promote the hell out of your Amazon page, website and other online venues. Source as much product as you can domestically or from countries not affected by travel bans.
If you are smart enough to have a cash reserve or an untapped line of credit, now is the time to use it, but only sparingly and as a last resource.
Negotiate Your Fixed Costs. Does your lease have a force majeure clause excusing rent payments in the event of war, labor strikes, terrorist activity or other acts of God? If so, now is the time to take advantage of it, even if it doesn't specifically refer to epidemics or infectious disease. If not, talk to your landlord anyway and see if he or she will grant a six-month rent reduction or deferral. If you are a franchisee, call your franchisor and request a temporary reduction or abatement of royalties and advertising fund payments.
Pull together some hard data demonstrating how much business you are losing each week and month because of the epidemic and mandated shutdowns. That will help you get the relief you need, especially if other tenants and franchisees are making the same requests.
While firing employees outright is not a good idea — it will make it tougher to get back on track once the government sends the "all clear" signal — put as many people on part-time status as possible; reduce your hours; and consider temporary pay reductions for all employees.
Embrace the "R" Word. In tough economic times, whatever the cause, it's the ruthless business owners — those willing to do everything short of breaking the law — who are most likely to survive. If you need a refresher on what it means to be ruthless in business, check out my YouTube video "The Three Personality Traits All Aspiring Entrepreneurs Must Develop."
Good luck to all my readers during these difficult times.
Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our webpage at www.creators.com.
Photo credit: Free-Photos at Pixabay