COVID-19 cases are on the rise thanks to the Delta variant, and there’s a growing concern among small businesses in the area that another potential lockdown — similar to the ones we had back in 2020 — are an increasing possibility. Could this really happen? That depends on whom you ask.
Maura Shenker, director of Temple University’s Small Business Development Center, believes that another lockdown is unlikely. “I don’t think we’ll see shutdowns in the Philadelphia region, given the high percentage of vaccinations and new mandatory vaccine and testing requirements going into effect,” she said “It’s more likely that we’ll see travel restrictions around ‘hot spots’ where COVID is surging.”
Most of the experts I’ve spoken to agree with Shenker. But not everyone.
Kevin Williams, a partner at Black Squirrel Collective, a Philadelphia-based community investment organization that provides training, consulting, and access to capital for small to medium businesses, believes not only that are things getting worse, but also that a lockdown is “very likely.”
His opinion is supported by a new poll of 5,200 small business owners nationwide surveyed by networking platform Alignable in July that found that 47% of those surveyed are “most concerned” about government re-closures. That number is even larger in New Jersey, where 65% of business owners fear potential lockdowns.
“The delta variant seems to be trending upwards to a level equal to the Alpha variant,” Williams says. “During this time, businesses are finding ways to be innovative, but it seems like there may be some restrictions placed on the businesses by the government that will make it hard for some to manage. Some of the shutdowns will be due to businesses not taking this situation seriously and being unprepared.”
Regardless of whether you agree with Williams’ perspective on another potential lockdown — or even restrictions — he’s right that businesses, particularly small businesses, still need to be prepared. How?
Having paperwork in the office is not very helpful if all of your employees are working from home. Which is why it’s important now to digitize and store this information online. Use the digital invoicing capabilities of your accounting software and create secure folders with an online service such as Dropbox, Google Drive, or Microsoft One Drive so that you can scan and upload to the cloud key agreements with the bank, shareholders, landlord, employees, and customers as well as any corporate documents like minutes, stock certificates, and articles of incorporation.
“Small businesses need to keep their financial records in good order and up to date,” said Shenker. “All of the COVID relief programs [municipal, state, and federal] rely heavily on proof of lost revenue, payroll, expenses, etc. Having this information readily available means faster and more accurate applications for assistance when needed.”
Good businesses have also learned the importance of having a disaster plan. It’s not just about the delta variant. It’s about hurricanes, floods, power outages, and any other natural or man-made event that could cause the temporary closure of your business. A good disaster plan includes communication instructions and role assignments for employees; procedures for communicating with customers, vendors, and partners; storage and usage instructions for equipment (including photos); instructions for accessing data systems; and establishing a backup and restore process for data.
Having a good disaster plan also means ensuring you have adequate insurance coverage. Williams said now’s the time to increase it.
“It’s common for businesses to try to minimize their coverage in order to increase their margins,” he said. “Unfortunately, many were not able to be compensated during the pandemic, or they had a deductible they could not absorb with their cash on hand.”
Sarah Catherine Mailloux, a digital program manager who also works at Temple’s Small Business Development Center, is advising her clients to double down on their online presence.
“You need to have a business website, and if that is not in your budget or technical expertise, at least have a committed social media channel or show up on Google My Business,” she said. “It is not enough to just be online. You should be engaging with your clients, updating your information, and responding to their inquiries.”
Of course, it’s critical to conserve cash and tighten overhead, particularly in advance of any significant disruption that may occur. Surviving a significant disruption to your businesses caused by a lockdown — no matter how temporary — will be all about cash availability. Now is the time to squirrel away any extra savings that you have and also talk to your banks if possible to formalize credit and financing arrangements in case immediate access to capital is needed.
Make sure you’re aware of all the loan and grant programs offered by the federal and state governments. Take a hard look at overhead expenses and consider cutting anything that’s unnecessary for the next few months. Keeping a close eye on key metrics — cash, receivables, sales, employee hours — will also be important to ensure that no money is being unnecessarily spent.
“It’s important to seek help as early as possible,” Shenker said. “Philadelphia has many resources for entrepreneurs and small business owners, many available at no cost. The Small Business Development Centers offer one-on-one consulting and, because they are funded by the SBA, often have the most up-to-date information about government relief programs.”
Finally, you should be reaching out to others. When lockdowns happened in 2020, what steps did other business owners in your industry take? Are they as concerned about another lockdown and, if so, what else are they doing to prepare now?
The best way to get these answers is to ask others in similar businesses, and the best way to do that is to join organizations that have like-minded business owners as members. That means getting more involved with industry associations or a local chamber of commerce. It may mean joining a Facebook or LinkedIn group with other members that are discussing these issues. Or creating a small network of respected business owners and discussing ideas with them.
“Many would like to think it is the government’s responsibility to keep every business [small and large] afloat, but that isn’t realistic,” said Williams. “Businesses will have to rely on some traditional business practices to survive and some innovative ideas to keep customers. Very few industries are pandemic proof and none of those industries insulate small businesses.”