Coronavirus decimated those we rely most upon.
With small businesses, and in particular, restaurants facing a drastic drop-off in revenue, this is not only uncertain times, but also incredibly nerve-racking as well. To help empathize with the situation, we thought we’d break down a few of the key considerations we’ve been telling our restaurant and small business clients on what they should be doing with what’s currently available. Here are some of the highlights:
Reconcile your bookkeeping.
A first step many small businesses and restaurants should consider for COVID-19 is reconciling their books. Not only will this help give a more accurate picture of where your business is, but what type of recommendations can be made to help you recover faster. Some possibilities include potentially looking at what functions of your business are essential versus what can be cut out, as well as how to provide funds for your staff in these trying times. You can’t know how you’ll move forward if you don’t know where you’re at, which is why running through your books now is a must for your first step.
Improve the lives of your staff however you can.
Not every business landed cleanly from COVID-19. While some were able to take care of their staff with paid time off and other benefits, others were left with laying people off at hopes they got unemployment benefits, as well as waiting on an answer. That’s not to say that some owners haven’t been gracious in taking care of their staff or those they laid-off, but real financial solutions surrounding employment are a long-term issue that deserves a solid answer. Now with a more clear path to the types of programs available, there’s quite a bit that people can do to help their staff. In the following section, we’ve listed a few of our favorites.
Look into available relief packages.
The biggest consideration for your staff should the Paycheck Protection Program or PPP loan. What we like about the PPP program is that as long as you use the loan for payroll services, you’re eligible for it being forgiven after the two months of interest. The loan takes a monthly average of your revenue, then multiplies that average by 2.5x. Check out and see the SBA’s form on how to apply here, as it can help save both you and your employees a lot of headaches in the long run in trying to come up with funds.
Outside of the PPP program, there’s also Economic Injury Disaster Loans, which provides up to $10,000 for businesses experiencing a loss of revenue, as well as the SBA Express Bridge Loan, which is available to those who have an SBA Express relationship with a lender. Finally, the SBA offers other forms of assistance as well such as Debt Relief, depending on your relationship with a lender.
Although no one can anticipate another Coronavirus sweeping through and causing as much global catastrophe as this, it’s important to still plan for the next disaster.
Brainstorm additional revenue streams.
Beyond what’s available to make up income, the other consideration for those affected by COVID-19 is what type of additional revenue streams they can anticipate by altering their business model. For example, many restaurants have converted to a ‘to-go’, contactless model, which for some has been more successful than dining-in. Furthermore, other companies have adapted their model to be much more DIY (such as offering cooking kits), giving another stream of revenue that has a different path in terms of price point and frequency. Start working on a few projections for what this might look like for you, as well as what type of foundational income it might be providing for the next couple of months.
Be realistic on saving for the next disaster.
Although no one can anticipate another Coronavirus sweeping through and causing as much global catastrophe as this, it’s important to still plan for the next disaster. One thing many of us learned from this incident is how short our runway was, as well as how much more we needed to ensure everyone was good. While there still are going to be some unfortunate side effects to downturns, it’s better to be much more prepared for what’s anticipated, and to have the proper plan in place accordingly, ensuring that everyone gets a fair shake in the end.
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