At a time when many of us are asking, “When will this be over?” it is comforting and encouraging to see how others are navigating this period from a professional and personal standpoint. Hiscox recently reached out to three of our customers to find out how they are adapting, what business as usual looks like right now, and even how their personal lives have been impacted. 

Many small businesses are struggling due to economic challenges imposed by the pandemic. In fact, research shows [1] small businesses owned by Black, Indigenous, and People of Color (aka BIPOC owners) have been hit harder than others.

The National Bureau of Economic Research reports that between February and April 2020, the number of Black-owned businesses declined by 41%, Latinx-owned businesses fell by 32% and Asian-owned businesses dropped by 25%.

Meanwhile, small businesses declined 21%. This is concerning, especially since small businesses create 1.5 million jobs annually and account for 64% of new jobs created in the U.S., according to the Small Business Administration.

Put business interests first.

With recession looming large, businesses — even those with healthy cash flow — face uncertainty in their operations. In such times, it is natural to feel conflicted between helping your business or your employees. Ideally, you do both. But when the future is uncertain and cash flow is tight, many entrepreneurs have to decide: Should you spend your last penny on keeping your employees happy, or on keeping your business afloat?

Keep Your Business Moving

A crisis can slow a business down, but it doesn’t have to completely halt operations. O’Brien shares the importance of having a business continuity plan (BCP) to keep your company moving forward. A BCP is a roadmap that allows a business to advance in the wake of a disaster, ensuring that products and services get delivered without interruption. 

Communication Is Everything

While it’s always vital for employees to be able to connect and communicate with one another, this is even more critical during a disaster. Employees are an organization’s lifeblood, so the goal is to have a plan that will reach everyone with frequent updates to allay uncertainty and fear. And because natural disasters can often disable certain forms of communication, an effective plan is one that incorporates both new and traditional technologies — be it web postings, texts, phone calls, social media updates, or even printed flyers.

Prepare an assessment of the internal and external environment.

What did the external and internal environment look like for your company today?  What do you believe the world will look like for each of the next five quarters? For companies burning cash, such as startups, how much cash do you have? What’s your monthly cash burn at your new low revenue level? How many months of cash do you have?  Cut costs to stay alive for 24 months.

Iterate the assessment with your investors/board.

Whatever assessment you develop, you need to get feedback from your board. While you’re seeing just your own company, hopefully, they’re getting data from multiple companies across a wider set of industries. If you’re a startup, you’ll also get a sense of how much of a nuclear winter the funding scene is for your market/company.

Collaborate with upstream and downstream providers.

It’s worth reiterating the two ways average customers cut down on expenses. First, they chuck out any expense that they can live without. Movies, take-out, and multiple streaming subscriptions may all fall under this category. Secondly, they reduce the money on things they absolutely need. Groceries and fuel are good examples of this.

Innovate with pricing offers.

This is one of the most effective ways to retain your customers in a downturn. Pricing innovation must focus on two specific objectives: making your offering more affordable to the customer, and improving your own cash flow. 

We have always emphasized the importance of having a good website for your company because it can act as your best tool for marketing and sales. A poorly designed website can repulse people from your business and can cause you to lose customers before you even have them. Get in touch with HyperEffects to work on creating, enhancing, and making the website of your company more user-friendly.