Podcasts

CT Expert Insights: Navigating through the COVID-19 Crisis, with Barbara Weltman

The COVID-19 crisis has left us in an unprecedented time. Small businesses face not only an economic downturn but also severe restrictions—many being asked to close their doors entirely for the foreseeable future. How can a small business make it through?

Barbara Weltman, President of Big Ideas for Small Business Inc., lends her advice on this topic, revealing the tactics being used by many small businesses to stay afloat. This includes some creative strategies including what business owners can do now to prepare for the future, advantageous loans, and more. Tune in to learn about navigating your business through the COVID-19 crisis.

 

TRANSCRIPT

Greg Corombos: Hi, I'm Greg Corombos. So our guest this week on Expert Insights is Barbara Weltman. She's the President of Big Ideas for Small Business Incorporated. And for the next few minutes, we want to get her insights and advice for small business owners as they navigate really an unprecedented stretch here, given all the restrictions as a result of the Coronavirus and, Barbara, thanks very much for being with us.

Barbara Weltman: Well, it's my pleasure.

GC: What are you hearing from small businesses right now—feedback that either doesn't surprise you, but it's very common or things that do surprise you?

BW: Well, the range goes from good to bad. So there's an awful lot of bad. Unfortunately, so many small businesses have had to shut down or really lay off an awful lot of people and that's so unfortunate. But on the other side, a lot of small businesses have been adapting in some very interesting ways. And, for example, many local restaurants have been switching from eating-in to take out, and so they've been able to keep a lot of at least their kitchen staff busy even if they can't keep their waitstaff occupied. And so they've been able to stay in business and offer a service to customers.

Similarly, a lot of retailers and especially e-tailers have been pre-selling. Meaning that they haven't been able to connect directly necessarily with customers, but they've been able to sell gift cards that will be redeemed. So they're bringing in revenue now, but they'll be redeemed when this period of social distancing is lifted. There's a lot going on here. And it's not all bad, but, unfortunately, things at the moment are not great. The one thing to point out—and this is very timely— is Congress has enacted the CARES Act, which contains a lot of incentives for individuals and businesses that hopefully will provide a cushion to get over the really bad period and help us get back to business as usual, in the not too distant future.

GC: So direct aid is on the way here in short term as a result of the CARES Act. One of the other things that folks are talking about, Barbara, is Disaster Assistance via loans being offered to small businesses. If you're a small business owner, how do you know if that's something you ought to pursue?

BW: Well, there are a lot of loan programs to look into. So first of all, the SBA has a direct loan program for economic injury disaster loan, where you can borrow directly through the SBA, you apply directly to them. And it's a low-interest rate option and that's one of the things that's available.

Another, which is part of the CARES Act, is the expansion of the seven-day loan program called the Paycheck Protection Act. These are loans through SBA certified lenders but there's not going to be any credit checks, any fees, any personal guarantees, any collateral required, and interest deferred for six months. And if you retain employees on the payroll or rehire them within a certain period, there's loan forgiveness. So even the borrowing may be wiped out to a certain extent. And usually, when your debt is forgiven, it's taxable, but this is going to be tax-free. So that's a real opportunity.

And another thing is many states are offering their own loan programs. For example, I'm in Florida and they're offering loans up to $50,000 for small businesses. This loan program was set up weeks ago already, so check on one available in your area as well. So the bottom line is there are a lot of borrowing opportunities, and you just have to determine which you qualify for and which is going to be the best for your situation.

GC: As you mentioned, Barbara, lots of assistance opportunities coming here in the short term. You were bullish a moment ago about the businesses that are still able to do something—sell gift cards, do take out instead of dine-in, and that sort of thing. Some businesses have been specifically ordered to close though I'm thinking of hair salons and a lot of states or spas or other businesses where social distancing is not practical because of the work that's done.

So if you literally can't be open, can't even sell gift cards, is the aid something that's going to carry you through? Or is there some other steps you need to take in order to make sure you stay as solvent as possible?

BW: Well, first of all, a lot of these businesses do have websites through which they can sell gift cards, so that would be something to think about. But obviously not all of small businesses do have their websites or the capability to sell through the websites. But hopefully, these loan programs will be helpful to the small businesses that have been forced to close. Of course, my concern is how quickly these programs can get up and running and get the cash to the businesses that need them.

GC: You mentioned that the CARES Act will certainly help for the next few months. The problem though is we just don't know how long this is going to last. Some people think it might be early summer, other people are saying it could be months and months, six months or even more. So what's the right way to be thinking as a business owner right now about the short term and the long term, regardless of what the Feds do?

BW: As you point out, Greg, nobody knows when we're going to see light at the end of the tunnel. In other words, it's possible that the virus could continue but within the interim, there could be treatments available and/or vaccines that could alleviate the problem. So we just don't know. And we've been through many calamities before. We've been through the Great Recession when many businesses were forced to close entirely. But people with an entrepreneurial spirit are likely to start up again, perhaps maybe not the same type of business.

But I think that this is a great time for business owners who are not busy running their business to be thinking about strategic planning and working on their business and thinking about ways, going forward, how they can be better prepared for a possible future disaster, how they can get their finances in better order so that they could withstand at least for the short term, some setbacks, and to figure out how to better deal with employees.

For example, just something so minor—as, let’s say, let's say you're a small business right now. You're still operating even with reduced staff, but you're still operating. Well, maybe you want to make sure that all of your staff are getting paid by direct deposit so that they don't have to go out and go to the bank. The banks may not even be open for all hours and whatever. So you want to think about ways that you can operate under whatever circumstances arrive.

We've seen that business travel has come to a complete halt but businesses have been able to connect with customers and prospects and vendors through online conferencing, Zoom, GoToMeeting, etc. And going forward, this might be a better way to operate. We see that there's less of a need for business travel and we can save money and simplify our business lives and keep our employees happier. So I think there are lessons to be learned here. And I think that for business owners who are not busy with their businesses now, this is what you should be doing.

GC: A couple of other questions before we run out of time here, Barbara. First of all, I don't want to accentuate the negative too much. We hear enough of that. But what are the biggest mistakes you can make right now? What do you want to avoid right now?

BW: Well, I think that you want to avoid, to the extent possible, laying off your employees. It's tempting for your bottom line to furlough employees because it's costly to keep them on. But you have to recognize that it's more costly to bring them back if you need them in the near future. There are recruiting costs, there are retraining costs and such. So you don't want to have to do that. Plus, there are a lot of incentives in the new law that will help you keep employees on the payroll. For example, there's a new employment retention credit. So you can keep them on the payroll even though they're not working and get a tax credit for it against certain employment taxes. Again, that loan forgiveness of that paychecks protection program from the SBA—that depends on keeping or rehiring employees. I think that's an important thing to keep in mind right now. Your employees are your greatest assets. You’ve got to treat them as such and help them get through this crisis, too.

GC: Very good thoughts on employees. You talked about customers a little bit earlier, Barbara, but what recommendations do you have for small business owners? How much they should stay in touch with customers if they're not able to conduct their normal business with them right now? Frequency? What should the message be? What are your recommendations there?

BW: Well, I don't know about you, Greg, but I've been bombarded with emails from so many businesses that I work with saying, you know: we're here, we’re thinking of you, we miss you, we'll be back. You have to decide what’s enough and what's too much. But certainly, I think it is a great idea to reach out and, and let customers know that you are there and that you want to do business with them as soon as you can.

GC: Good thoughts all the way around. Barbara, thank you very much for your time today. We appreciate it.

BW: It's a pleasure, Greg, as always.

GC: Thank you. Barbara. Weltman is the president of Big Ideas for Small Business Incorporated. I'm Greg Corombos. For more information on this topic, please call CT at 844-787-7782.

 

 

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