The pandemic has forced many businesses to close or drastically adapt their business models to survive. Here's how to plan for the future of your business during the COVID-19 pandemic and beyond.
In the midst of a crisis – whether it's a global pandemic like COVID-19 or any other disaster – it can be easy to develop shortsightedness. Naturally, you want to focus on your business's immediate survival, and when those are the stakes, it can be hard to plan for a future that won't exist unless you rise to the occasion.
However, recovery planning is equal parts short-term and long term. To implement a successful recovery plan, you have to think about what things will look like after the crisis abates and prepare to maneuver your business to be well positioned for success when that time comes.
Still, that is often easier said than done. How can you best plan for the future of your business when things are changing daily?
How to stabilize your business during a crisis
The most important thing to do during a crisis is to stabilize your business, at least for the short to midterm. In the current situation, where the novel coronavirus continues its global spread and keeps businesses shuttered, that means cutting costs and tightly controlling cash flow to ensure you have enough liquid capital on hand to survive.
"Right out of the gate we reforecasted the next 90 days so we can survive the short-term," said Jason Westhoff, president of Cousins Subs. "This model forecasts cash by day [and] allows us to see what our total cash would look like on our worst day."
For some businesses, a pivot toward remote work, deliveries and e-commerce has kept operations running in a limited manner. In those cases, some cash is likely still coming in the front door (figuratively, at least.) Of course, many businesses have shut down completely, which means there is no new revenue coming in.
Cash flow is often one of the most important indicators of how well a business is positioned to survive a short-term crisis. To that end, the U.S. federal government adopted the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion stimulus package that provides a multitude of programs to help small businesses weather the crisis.
"As an entrepreneur for the past 30 years, what I know for sure is that however long or short this season lasts, we will come out of this," said John Rotche, founder and CEO of Franworth. "In fact, entrepreneurs and small businesses are integral to driving recovery and should leverage the following three opportunities currently available …"
Easier access to capital: "We're already seeing business loans with lower interest rates being made available through SBA Disaster Recovery loans and the CARES Act," Rotche said.
Increased access to real estate: "The leasing market has been tight for a long time, and we expect to see it loosen up significantly," he said.
- Increased availability to a labor force: "[M]illions of people are expected to file for unemployment and who will be eager to get back to work," Rotche added.
While times are tough, small businesses that can successfully stabilize in the short-term can transition their thinking toward a mid to long-term recovery plan.
What is recovery planning?
Recovery planning involves looking not just at the current moment and determining how to best navigate an ongoing crisis but also looking ahead to what the future holds and considering how your business will be best positioned for future success. In other words, recovery planning has to be about how your business can not only survive but also thrive.
"It's fair to feel the need to have blinders on and just focus on survival during these next few weeks and months," said Abhi Lokesh, CEO and co-founder of Fracture. "However, the truth is that, in time, this pandemic will pass, and the post-COVID-19 landscape will look very different from the past … [small businesses] need to be prepared to exist in that 'new normal' environment."
"Recovery planning is based on the principle that SMBs can't just think about how to survive in the short term but how to thrive in the long term," Lokesh added.
Some questions entrepreneurs can ask themselves to prepare for the long term include the following:
How will consumers' needs change after COVID-19? Are your customers' needs likely to change as a result of COVID-19? If so, what might they ask of your business that they haven't in the past?
Do your products or services relate to those evolving needs? Consider whether your business's products and services relate to the changing needs of your customers. If you think you are still suited to serve them well, prepare to double-down on your existing business model. If you think your products and services will no longer be suitable, envision how you should tweak them.
- What will the competitive landscape look like after COVID-19? Many businesses will not survive the economic downturn associated with the coronavirus pandemic. Consider whether your competitors are among them, and what that means for your industry as a whole and your market specifically. Will there be opportunities to expand your customer base? Could you potentially acquire a rival company?
Answering these forward-looking questions at a time when no one is precisely certain what the future holds can be a challenge. However, considering them today can help you more readily pivot your business tomorrow to suit the moment. It isn't necessarily vital that you anticipate the future with 100% accuracy, rather that you plan to adapt to the future and consider several different scenarios of what that might look like.
"Small businesses must remain forward-thinking and forward-looking amidst any crisis," said Lil Roberts, founder and CEO of Xendoo and a business.com community member. "Implementing a daily planning meeting is critical for key stakeholders to review the new information that is coming out and adapt."
"Adaptability is key in a time of crisis," Roberts added. "Consistent communication and transparency with their teams and customers will also help them come through stronger than they were before."
5 steps you can take today to plan for your business's post-coronavirus future
Wendy O'Donovan Phillips, CEO of Big Buzz Inc., suggested following a simple five-step plan to be sure you are ready when the coronavirus pandemic finally recedes:
Run surveys to gather customer data. To appropriately plan for the future of your business, you have to know what your customers are thinking. Running surveys and focus groups is a good way to hear from your customers firsthand about what's on their minds. "Avoid making assumptions about their needs and fear, and get right at the heart of the matter by gathering voice-of-the-customer data," said Phillips.
Maintain a service-first mindset. At this moment in time, sales and revenue are important, but it's more important to be available to serve your customers and community. By keeping a service-first mindset, you can be ready to provide what your customers really need, rather than relying on your old business model which might no longer be as relevant.
"Think in terms of what customers need now as opposed to what they historically needed from your company," Phillips said. "The insights customers share on surveys from step one will inform your marketing and sales communications plans."
Take it one conversation at a time. If you are able, focusing on personalized communications with your employees and customers is a highly effective way to reassure them and build a closer relationship during a difficult time.
"Resist the urge to send mass emails or communications. Start at the top with company executives calling the most loyal customers," said Phillips. "Work on down, having salespeople and marketers make one-on-one calls to customers as well. The opening line on these calls is, 'I wanted to check in on you. How are you doing in this moment?'"
Revisit your SWOT analysis. A SWOT analysis helps you focus on your strengths, weaknesses, opportunities and threats to your business. It is likely that virtually all these things have changed since the coronavirus pandemic began, so it's useful to revisit it.
"Your clients and community have different needs now than they did even a month ago, and will have different needs in another month," Phillips said. "This approach, focusing on opportunities, will help you more readily hit your revenue and profit projections."
Refocus your strategic planning model. You should have a living, breathing document that can guide your strategy but changes with the dynamic real-world situation you are facing. Share this document with other members of your organization and meet regularly to discuss how it might need to change.
"[Create] a one-page document shared once weekly with the entire team to show: the vision; [the] revised revenue goal; objectives, or destinations, that the team [should] reach to get to the production goal; and strategies, or actions, that the team can take to achieve each objective," Phillips said.
Available resources to help your business prepare for a long-term recovery
Below are some available resources that can help your business endure the short-term impacts of the coronavirus so you can better look to the future:
Economic Injury Disaster Loans: The SBA's Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million in the context of a qualified emergency. Under the CARES Act, the federal government approved a loan advance program that would quickly deliver up to $10,000 in economic relief to small businesses hampered by COVID-19.
Paycheck Protection Program: The Paycheck Protection Program is a nearly $350 billion program created by the CARES Act that provides low-interest, forgivable SBA loans to approved borrowers. If small businesses use the funding to retain their workforce or rehire their workforce to pre COVID-19 levels, the loans are potentially forgivable in full.
Express Bridge Loans: For small businesses that have an existing relationship with an SBA express lender, the CARES Act created an Express Bridge Loan Pilot Program that enables lenders to deliver up to $25,000 to borrowers quickly. These loans are designed to fill immediate needs while waiting for EIDL loans.
- SBA Debt Relief: Finally, the CARES Act also included debt relief provisions. The SBA would automatically pay the principal, interest, and fees of existing 7(a) loans, 504 loans, and microloans for six months. Additionally, the SBA would do the same for new loans issued before September 27, 2020. Additionally, the SBA would provide automatic deferments on existing 7(a), 504 and microloans through December 31, 2020.
For more resources, visit business.com's COVID-19 resources page, where we have compiled "how to" guides and expert advice to help you manage your business during these difficult times. Visit our community to connect with other business owners and professionals for mutual support and advice.