March 24, 2020 | UHCL Staff
Many small businesses are struggling due to COVID-19 concerns and are feeling a sharp financial strain after having to close their doors to uphold social distancing practices recommended by Centers for Disease Control and Prevention. University of Houston-Clear Lake’s Associate Professor of Management Troy Voelker says a small-business owner could mitigate a potentially devastating financial setback by considering some suggestions.
First, Voelker said to stay up to date with any bailouts or assistance coming from federal, state or local government agencies.
“These come along quickly and the landscape will evolve very fast over the next few months,” he said. “Demand for assistance will be very high, so submitting your requests early and thoroughly must be a high priority. I would recommend that researching this topic be the first thing a small-business owner does in the morning, and the last thing he or she does at night. It’s changing that quickly.”
Voelker also recommended that business owners maintain close contact with their supply chain and clearly communicate what is going on. “At the beginning of March, before all the shutdowns happened locally, small businesses were already reporting interruptions in their supply chains, especially those with China connections,” he said. “Those interruptions will only become more significant over time, so it’s important to continue communicating with vendors.”
Despite the difficulties, Voelker said, it’s possible to find ways to continue developing revenue. “For some businesses this is as simple as moving your consumer interactions to an online or pickup model, while other businesses might find they have ways of deriving revenue they never considered before,” he said. “In some cases, the business might need to identify other non-traditional opportunities for creating revenue. There will be a reduction in consumption over the next few months, so diversifying your revenue streams is a good way to respond to uncertainty.”
Layoffs have become a reality, with many hourly workers in service industries finding themselves stuck at home due to social distancing recommendations. Voelker said it’s important for a business owner to make sure his employees do not feel forgotten.
“Maintain contact with your employees as much as you can,” he said. “Even if you’re able to move to an online model, keeping up human connections while at a distance is just good business practice and an important part of life. Most of us are used to spending a lot of our time at work and the people we socialize with during the week are our coworkers, so separating from that is more stressful than many of us realize.”
This is a good time to address parts of the business that owners have been neglecting or haven’t had time for. “Don’t focus on the negativity of the circumstances,” Voelker said. “Use this time to figure out how to connect with future customers and work on things you haven’t had time for.”
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