Small Businesses and Phase 2 of COVID

covid small business loan phase 2
 

The COVID shutdown heavily impacted the economy, especially small local businesses.  This week on our Insta Live we discussed Businesses and Phase 2 of COVID with our guest speakers Gina from GBoyd Boutique and Jenna from Early Bird and Worm. We shared the financial and mental challenges business owners face during COVID, and how Phase 2 changed their business. We also discussed whether there are enough COVID small business loan and resources for small businesses, and the advice these ladies have for other small business owners. If you want the full conversation, you can watch the video here or check our Youtube summary above.

Financial challenges of COVID:

  • Businesses are not only fighting to survive, they are also fighting the fear factor of COVID on customers’ health. To overcome this, businesses need to have safety guidelines. Although this is enforced to businesses, it can be very difficult to get access to supplies as there is an excess demand for them.
  • Some businesses have seasonality in sales, and COVID hitting spring and summer hit many businesses. Our guest Gina’s store lost 33% of annual sales from shutting down during her peak season. Unfortunately, this sometimes causes business owners like her to let go of enforcing security guidelines such as forcing customers to wear face masks. With the reopening of Phase 2, businesses are more focused on making up their lost revenues than to lose customers because of safety precautions. Owners are trying to avoid conflicts with customers who might not want to wear a mask to shop.
  • Some products are hard to sanitize to not ruin its quality. Thus, business owners prefer to help customers sanitize themselves before touching any items by putting hand sanitizers in the entry.

 

Are there enough resources available for a small business?

The government is helping many businesses and individuals by introducing a number of financial support programs. However, our guest Gina said the process to apply for some of these programs have been very tedious. She shared how spent 8 hours going over her bills with her bookkeeper to apply. Our second guest Jenna also confirmed that she qualified for only one program but missed on other programs due to eligibility. Overall, The process is very slow with a large number of businesses applying.

 

How do business owners deal with all this stress?

Aside from these financial challenges, mental challenges can be a major threat. Constantly changing COVID guidelines, suppliers expecting payments, and searching for a COVID small business loan have a constantly changing impact on businesses. Trying to survive this economic turbulence while adapting to these changes and expectations can cause great mental health risks. In addition to all this, the pressure to support staff so they can continue paying their bills while keeping them safe is also very mentally challenging.

Throughout all of the uncertainty, sole proprietors are under continual stress. For sole proprietors, the responsibilities can feel impossible to manage with no partner or larger team to share the burden with. Also, for business owners who are parents, there is the added ambiguity of whether kids will go back to school or not. As a working mom, Jenna shared how being a working parent is already difficult, and even more challenging during COVID. Last week, we had a detailed discussion about Working Moms during COVID, if you want to learn about the challenges working parents face, you can click here.

 

How to manage the process to get back on your feet:

Jenna said she applied for CERB and a COVID small business loan for herself. For her staff, she lowered their hours for them to receive CERB while maintaining the needed level of staff. She also applied and got rent relief from the Canada Emergency Commercial Rent Assistance (CECRA), which is a fund provided to businesses to help pay rent during COVID. However, as mentioned above, both our guests had very little funding available to them because of the size of their small business.

 

Why you need a plan

In addition, business owners need to develop a business plan on how to get back up and achieve their goals. It’s very easy to forget planning during this rapidly changing environment. Business owners also need to think long term and decide if they have a viable business that will grow and recover even after COVID is over.  The current struggles for funding are very hard to manage. Thus, business owners need to decide if it is worth it continue or if they need to pivot.

 

What advice can we give to small business owners?

  • Know your strength and weaknesses to seek help on things you can’t overcome yourself. If you don’t know accounting, you can get overwhelmed by the forms to fill while being unsure about your eligibility. So, don’t stress yourself on your weakness and call your accountant! This allows you to make sure you are maximizing your funding.  Also, an accountant can guide you to apply for grants and any COVID small business loan from organizations familiar with your industry.  They can also help you to apply for regular loans with banks.
  • To deal with seasonality and loss of major sources of revenue, businesses can shift their product lines to new opportunities. Gina who sells shoes is thinking of focusing on boots in fall to make up for her peak spring sales loss.
  • Be aware of how your business can have added indirect costs related to COVID guidelines on top of direct expenses. Even though many businesses turn to online sales to compensate for expenses, some products are hard to sell online. People who buy products that need to be tried on might prefer to wait until stores open. This is definitely the case for businesses like Gina that sell shoes.  Those types of businesses should have realistic expectations of their forecasted sales. Even if customers buy these products online, there can be multiple shipments between the customer and seller if the products don’t fit, stretching the sales process and adding shipping costs.
  • For some entrepreneurs, it might be hard to ask for help and to show vulnerability. However, you can never know how supportive your community is without asking! Some customers are very willing and seeking opportunities to support the businesses they love. Thus, it is important for business owners to get out of their shell, risk being vulnerable, and ask for help.
  • To get over this challenging time, it’s important to break tasks down instead of looking at bigger chunks. This allows you to calmly look at tasks to accomplish.
  • There are new resources available for businesses to hire students from the government. This allows businesses to hire great talent in an affordable way. To learn more about how to hire a student, you can check here.

The most important insight was how COVID is very tough and business owners need to support each other. Jenna shared how she puts aside some of her revenues to give back to the community. As a business owner with kids, she empathizes with others that might be in the same situation, if not worse. Giving back allows her to stay positive and to be grateful for what she has.

 

We hope you enjoyed reading our blog about ‘Small Business and Phase 2 of COVID’. You can find more relevant content about the latest financial news and our live chats on our News Blog. To learn more about our discussion, you can check our comprehensive short summary video (hyperlink of Youtube video) on our Youtube channel and the full live chat here. Stay tuned to learn more tips on a new topic each week on our Instagram Live at 5 on Instagram! To check last week’s blog article about ‘Vacations During COVID’, click here.

 

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