We’re several months into the COVID-19 outbreak, and this pandemic has impacted small businesses more than anyone thought possible.
Social distancing restrictions imposed by the government are forcing shops and restaurants to close their doors until the situation clears up. Other industries are struggling too.
The COVID-19 outbreak is causing marketing challenges and economic uncertainty across the nation, and small business owners are struggling to find their way amidst the crisis.
Many small businesses don’t have the liquid assets or capital to survive beyond a few months without making a profit, and a large portion of these businesses are closed until further notice.
Being forced to close their doors prevents these businesses from getting new customers and turning a profit. As a result, many businesses are cutting or suspending their marketing effort, which turns into a double edged sword for the business owner. Because without marketing, it’s difficult to attract new clients or communicate changes to your product or service offering on a massive scale.
Many small businesses can’t afford to keep their marketing campaigns afloat, but they can’t afford not to either.
Dan Gower of Buddy Gardner Advertising explains this challenge from a marketer’s perspective, “The biggest challenge for me is that brands are cutting down on their marketing budgets. It makes sense, since most businesses are feeling the pinch right now. Many companies are experiencing business continuity issues and trying to find ways they can protect their own employees from layoffs,which hurts B2B companies.”
Not generating profit for months has caused many business owners to consider whether they will ever get the opportunity to reopen their doors. Small-business owners hope that the outbreak will end before they run out of money, and the worst part is that many programs designed to support small businesses are disorganized and not living up to the promises they were hoping to deliver.
To sum up the biggest issue on business owner’s minds: economic uncertainty.
Many small-business owners are turning to alternative methods for staying afloat, including: tapping into personal savings or retirement funds, obtaining loans from family and friends, and invoice factoring, just to stay above water.
Here’s how invoice factoring small business works: the business owner sells accounts receivable (invoices) at a discounted rate and the company that buys the account must collect. This allows business owners to free up working capital, because they don’t have to wait on invoices to be paid. The end result is that the business stays running without interruption.
Chartercapitalusa.com explains further, “If you don’t qualify for traditional business loan, you face a major cash flow gap between billing your customer and getting paid. Invoice Factoring is especially important for small businesses, so you can invest in needed equipment, pay vendors, or meet any needed business expense like payroll.”
Economic uncertainty isn’t going to be a problem that’s solved overnight, and business owners around the globe have a long road ahead, before the uncertainty subsides.
Is There Hope for Small Business Owners?
Although the COVID-19 outbreak is causing problems for businesses around the nation, some surveys indicate that things are beginning to look up.
Scott Cianciulli of the Plunkett Group offers this, “Highlights from The Harris Poll administered survey reveal that despite the current economic environment and the difficult decisions being made, SMB optimism was surprisingly resilient. In fact, nearly 80% of polled companies have made strategic investments to keep their businesses operational through the pandemic.”
Small-business owners who aren’t able to thrive in their usual ways are finding resourceful ways to adapt to the changing regulations and needs of consumers. For example, some brewing companies are making hand sanitizer instead of beer.
Consider what ways you can alter your business to meet the needs of your target audience, and your likelihood of thriving beyond the crisis increases exponentially.