Business Tips for Surviving the COVID-19 Crisis

by / 0 Comments / 127 View / August 8, 2022

These are difficult times for a small business, for all businesses. Usual ways of gaining and conducting business have been upended. What should we be doing now, and what can we learn from this experience to apply in our business going forward?

Following is a checklist of items based on my working with many small businesses during this crisis.

Have a Good Business Foundation in Place

These steps are not the frontline items of making a product, performing a service, contracting a new customer, attending a tradeshow — activities that can generate revenue. Thus, the items listed below are often considered lower in importance, a nice-to-have rather than a must-have, and are consequently pushed off to a later date.

The current COVID-19 crisis demonstrates that these measures are important to have in place, and those businesses without them have additional hurdles and challenges.

1. Know your supply chain/vendors/contractors/customers

You can control the items within your company but are often affected by other’s actions. Will your customers pay their bills on time? Is your business dependent upon a few customers (i.e., customer concentration)?

Will you receive supplies, parts, and other inputs needed to make your business function? Are you dependent on the performance of just a few suppliers? How readily available are service providers if they are sick and unable to perform?

Some of these questions did not have to wait for COVID-19 to be impactful, as those with supplies from China were impacted for much of the last year as a result of the trade war.

2. Have a banking relationship and know your banker

The COVID-19 economic stimulus packages are being implemented via the banking system, and banks, which are overloaded with applications, are giving first preference to their current customers. Companies with a good working relationship with their small-business loan officer appear to have more communications about the process requirements and status of their applications.

If your bank is not treating you as you think appropriate, then look for another banking relationship when times improve.

3. Have in place a line of credit (LOC)

In these times, “cash is king.” It is a best practice to have an LOC that can be drawn if needed. It is your safety net to get through these times, to take advantage of opportunities to provide product/service to your customers, or to grow your business.

The best time to get an LOC is when you do not need it. Whatever level of LOC you might have now, look to increase it. Often, there is no cost for an LOC until you use it.

4. Have in place a cash-flow forecasting process

Again, in these times, cash is king. Forecast your cash flow — monies expected to be received and monies you will be spending. Know if you can make payroll, pay yourself, and pay some toward your key vendor invoices.

This financial modeling can be a simple Excel spreadsheet or something more sophisticated. Depending upon your sales and payment cycles, this could be a monthly forecast for the next six months or a weekly forecast for the next three months. You need to know your cash-in-the-bank and net-working-capital positions every day.

5. Have relationships with an accounting and law firm

Most small businesses have these relationships, but are they active? You need to rely on your accountant and lawyer to help you interpret the regulations for obtaining disaster loans as well as actions you might need to take, like suspending rent payments, not paying vendor invoices, leaning on customers who are not paying your invoices, etc.

Understand That the Future is Uncertain

Fully appreciate that there are many things you do not know and that are impossible to know for sure. Reach out to advisers and others who might have operated in similar situations, and get their advice.

One source of such advice is having a SCORE mentor. Go to to find a mentor and to find much information about starting and operating a small business.

Don’t believe that everything will be OK without taking action. This is a high-risk, “bet the ranch” approach. While you do not need to make rash decisions, you should be taking actions to help ensure that your business can survive the crisis and be strong when the crisis is over. At that time, it will not necessarily be business as usual.

For many companies, personnel cost is the largest area of expense and the most within your control to impact. These are very difficult decisions. Have in mind various scenarios of what you would do in a crisis.

Most experienced entrepreneurs make well-thought-out but quick and deep personnel-cut decisions. Their approach is to make deep cuts immediately and thus hopefully make the cuts just once.

Decide what is important to your business. Is it keeping the full team together and thus all taking a temporary pay cut? Or are some positions not truly needed, so some staff is let go and those retained do not have as much of a compensation cut?

Know what is important to your team. In a few companies I am working with, the founder/CEO has talked with each employee one-on-one and found out that maintaining health benefits is more important for the next two to three months than maintaining salary. Thus, salaries were cut 40%, but health benefits were retained.

Communication with your team is critical during these times — both one-on-one and in groups to get their input and to share plans. Some companies are holding weekly “town meetings” via video conferencing.

Focus on Having Sufficient Cash

I am sure you started the year with plans for growing your business, undertaking new projects, offering new products or services, having a key management or customer conference, hiring key positions, or maybe even retiring from your business, etc.

Now most of these plans are on hold. In a crisis, it is all about getting through it. Now is time to change your focus, change the metrics you follow, and concentrate on having sufficient cash to weather the storm.

Be a Leader

Leadership is about having a plan and taking action — thinking about the issues, having a coherent strategy, and reaching out to others for advice.

Leadership is also about how you act: Be steady in a crisis. It is not being Chicken Little and telling everyone the sky is falling. Nor is it being a Pollyanna and saying that everything will be OK, and no action is required. Your team, and your customers, are looking to you.

Communication is key, both one-on-one and in groups. These communications are an opportunity to really listen and for you to share in a transparent manner your plans, actions, and, of course, the results.

This current crisis, with its mandated social distancing and working from home, adds complexities to effective communication. As the company leader, this is your job to work through the communication challenges, both with your team and with your customers.

As we do not know how long the COVID-19 crisis will last or what the business/economic conditions will be post-crisis, it is not too late to act now to improve your company’s position and financial health. Learn from this experience to make changes in your business operations. Be the leader your employees and customers are looking for.

Hal Shelton is an angel investor, certified SCORE mentor, and author of an Amazon bestselling book, The Secrets to Writing a Successful Business Plan. Visit to read more of his articles about small business or to purchase his book.

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