7 Smart Moves to Lockdown-Proof Your Business
When the pandemic first hit, many businesses did their best to wait out the initial few weeks. However, many state governments would intermittently lockdown and reopen various sectors of the economy. This made it hard for businesses to stay open, but due to the consistent reopening and shutting down, it became hard even to adapt properly. Many businesses couldn’t keep up and unfortunately shut their doors for good. Although some governments are expressing more optimism about opening the economies, things are still uncertain. If you want to stay afloat regardless of what happens in terms of near-future lockdowns, you’ll have to be proactive.
Here are some smart moves you can make to lockdown-proof your business.
1. Get a Line of Credit
A line of credit lets you borrow funds up to a dollar amount specified by the lender. You then pay back the amount borrowed plus interest at your convenience, as long as you cover minimum payment every billing period. Now, in good times, credit lines are often used to bolster cash flows and take advantage of opportunities. For example, a company might use a credit line to buy extra inventory while it’s at a discount to boost profit margins. But given the economic circumstances, it’s best to be prudent with your line of credit.
Avoid using it to stretch beyond your budget. Instead, keep it sitting in reserve in case lockdowns occur. Instead, rely on your saving before drawing from your credit line. Only when savings aren’t sufficient should you draw on your credit line. That way, you’ll minimize your interest expenses and maximize the amount of money you can borrow. As a bonus, maintaining this credit line will bolster your business’ credit score, helping you secure better interest rates and terms on future debt.
Similarly, you should consider getting a business credit card. Use it on your regular business expenses. You’ll earn some easy cash back, essentially scoring you a small discount on every purchase.
2. Refinance debt
In lockdowns and economic downturns, holding onto every dollar (within reason) is essential. One way to do so in the current environment — where interest rates are at record lows — is to refinance your debts. In doing so, you have an opportunity to save tens or even hundreds of thousands of dollars on interest payments over the loans’ lives. Additionally, you may be able to secure lower monthly payments — increasing cash flows and tightening up on expenses. Some debt candidates for refinancing include the following:
- Mortgages on properties
- Vehicle loans
- Equipment loans
You may also be able to negotiate for lower interest rates on business credit cards or credit lines. Although not refinancing, the result is the same: lower interest rates.
3. Establish or Improve Your Online Presence
The world of commerce has been moving online for many years. Ecommerce sales are expected to reach $4.9 trillion in 2021, partially thanks to social distancing and lockdown measures in response to the pandemic. After all, many prefer the convenience and safety of shopping online. So if you don’t have an online presence — or if you haven’t refreshed yours in a while — now is the time.
Once you create the online storefront, you can run various online ad campaigns, from Facebook ads to Google ads and more. Alongside that, consider content creation. Writing helpful, engaging content is a long game, but it will help your site rank higher in the search engines (thanks to SEO) and build trust with customers. Building an email list is also an excellent move. Email is quite inexpensive yet can have incredible ROI. Build a large enough email list of loyal buyers, implement some email automation, and you’ll have a healthy income stream that requires little work. Now, service-based businesses in the professions (accounting, financial advising, etc.) can adapt to the online world, too. They can do all the same things — updating their websites, optimizing for SEO, creating content, and running marketing campaigns.
But what about the services themselves?
Easy: you can hold your regular meetings with clients online via video conferencing and live chat. Additionally, you can create information products — such as eBooks — for additional revenue streams. These streams help you scale despite the pandemic due to their passive nature.
And if your business requires in-person contact?
Well, you may as well spend your extra time starting or updating your website so that it’s optimized for when things open up. As a bonus, any business with an online presence should see excellent numbers when things return to relative normalcy. You’ll have a healthy online income stream, and your physical sales will hopefully return to their normal levels.
4. Maximize the Safety of Your Physical Location(s)
Most state governments have released guidance and rules on safety procedures to follow for having customers at your place of business. However, consider going above and beyond these. Implement as strict of safety and cleanliness policies as you can afford, within reason. Make your safety policies and procedures known on your website and in-store. Doing so will make your customers feel more comfortable about returning to your location. Plus, it demonstrates your care for customers and their well-being. That’ll boost customer satisfaction.
5. Do Some Downsizing
If you’re able to do business online, you may be able to downsize your physical locations, even just temporarily
You can save money on rent or mortgage by doing this. Plus, now’s the time to take inventory of the physical items you have in your possession and see what you do and don’t need. You can sell whatever you don’t need and make a few extra dollars.
6. Apply for CARES Act Aid
If you’re struggling to stay afloat at the moment, you should seek aid from the CARES act. You have a few options. The most well-known is the Paycheck Protection Program (PPP). The PPP provides low-interest loans you can use on qualifying business expenses such as payroll, interest on mortgages, rent, utilities, and similar items. If you spend at least 60% of the proceeds on payroll and the rest on qualifying business expenses, your loans become eligible for loan forgiveness.
Additionally, you can look into Economic Injury Disaster Recovery (EIDL) loans. These help you cover operating expenses you usually could have covered absent a pandemic. EIDL loans overlap somewhat with PPP loans, but some terms and expenses differ. Many small business accounting solutions like Quickbooks have libraries of articles on pandemic relief options and how to qualify and apply. They also direct you to the appropriate websites to make things easier.
7. Spend Downtime to Learn and Grow Professionally
If your area has a curfew or your business has closed for now, use some downtime to level up your skills and knowledge. Take courses and read books on relevant topics. Research industry trends and hunt for new tools you could use in your business. Consider hiring a business coach as well if you have the funds. They can help you figure out your next move and plan for the long-term.Using your extra free time in this manner will help you speed ahead of the competition when things return to normal.
Survive and thrive during and after lockdowns. Running a business has always been hard work. Throwing a pandemic and lockdowns in the mix can truly test even the toughest of entrepreneurs, But by following these tips, you can hopefully create a buffer against hard times and even thrive as things return to normal.