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Advice for Small Businesses
LAST UPDATED: APRIL 24, 2020
You couldn’t receive federal funding… now what?
We have spent the last month helping small businesses access and understand federal funding options. Whether you received funding or not, now is the time to start planning for the future in a wildly uncertain business environment. We have put together resources and our top advice for small businesses. If you have any further questions or would like specific advice from MBA students, please reach out.
Top 10 Pieces of Advice for Small Businesses
- In the case that you weren’t able to get funding or need more, understand other financing options. Some state governments offer aid packages. FinTechs are offering solutions.
- Have a plan for each scenario. Understand what you can and can’t control in a world of uncertainty.
- Be transparent with all your stakeholders. Your suppliers and employees, especially, will respect your transparency. Transparency will increase their willingness to work together with you.
- “Prioritize connection over selling” - Mark Cuban. Despite the inclination to focus on sales as revenues decrease, instead make sure that you build and maintain the relationships that you already have.
- Negotiate your contracts and debt. Be transparent, be polite, and understand your rights in the matter.
- Manage any necessary layoffs with compassion and decisiveness. Set the right tone, be direct and be human.
- Figure out how your customer needs have changed and adapt. People are building new habits, there’s an opportunity to supply them new services.
- Keep your best employees loyal. People are your most valuable asset.
- Leverage your track-record with landlords to negotiate better terms. Try to go month-by-month instead of annual contracts. Know your rights.
- Clearly communicate expectations for remote work and give frequent feedback.
Resources
How Small Businesses Can Survive the Coronavirus Outbreak by Karen Mills.
- In addition to disaster loans, which only apply to businesses in states that have declared emergency status, some state governments are offering aid packages
- Explore private sector programs and fintech solutions. Facebook said it would offer $100 million in grants to small businesses. And fintech companies such as Kabbage and Fundbox, which specialize in loans to small businesses, are also considering ways to support the sector.
- Renegotiate terms of contracts and debt. Owners should ask landlords for more time to pay their rent, for example. They should also ask banks to temporarily defer interest payments on outstanding debt.
- Concerned consumers can buy gift cards from their local businesses.
- Large companies can provide relief simply by paying their bills now. They tend to delay payments to preserve cash. Mills recommends that organizations reject that tactic.
A Way Forward for Small Businesses, by Zoe Cullen, Ed Glaeser, Michael Luca, and Chris Stanton.
- Don’t rush your decisions but do make plans
- What you can (and should) do right now is start making detailed contingency plans. These are overwhelming times, and “save my business” is a daunting task. But “Day 1: Call my landlord, Day 2: Sign up for a loan,” and so on feels more reasonable. Even better is to think through what you will do in 20 days if things look better or worse. Research in social psychology and behavioral economics has documented the ways in which making plans helps people achieve goals. Break your big goal into smaller goals and focus on achieving those.
- Figure out how your customer needs have changed. People are building new habits.
- Do some realistic accounting. Form realistic expectations of your cash flows. Figure out which expenses can be delayed. Stay abreast of other forms of public assistance.
- Keep your best employees loyal. Workers are your most valuable asset. Stay human with people.
How to Manage Coronavirus Layoffs with Compassion, by Rebecca Knight
- When making the decision, first ask “Is downsizing your workforce truly necessary?” As a leader, you need to spark “resourceful, creative thinking about how your organization can save as many jobs as possible.” -Josh Margolis
- Gather information
- If you decide layoffs are necessary, then make sure you are prepared before reaching out to affected employees. They will likely have a lot of questions about timing, severance, and benefits.
- Understand your limitations
- Even if you’ve presided over layoffs in the past, overseeing them in the coronavirus outbreak will be very different: they won’t take place in person. Margolis suggests asking your employee, “Is there a time when I can get 15 minutes of your full attention?”
- Set the right tone
- Your aim is to “treat people with dignity, fairness, and respect”
- Be direct and human
- Your message should be “clear, concise, and unequivocal.” Express gratitude for their hard work and dedication. Then offer a short and simple explanation about the economic conditions that led to the layoff.
- Offer assistance, but don’t overpromise
- Recognize that this person may need time to process the news and may have questions for you later.
- Be transparent
- Hold an “Ask me anything” session so that rumors don’t take over
- Focus on your wellbeing
Advice from Mark Cuban
- Accept the reality and quickly take action. You can’t be paralyzed by anger, anxiety, and fear.
- Transparent communication with everyone and anyone who you owe money too
- Be brutally honest with everyone.
- Prioritize connection over selling. Instead of pushing sales, build the relationships you already have. Check in on your accounts without the expectation of closing deals.
- Become an expert in small-business loans. Don’t expect your bank to hold your hand.
The Matrix for Covid-19, by Sequoia
- Things are changing rapidly, adaptability will determine who survives.
- There are things you can control and things you can’t control (macro factors). Have a plan for all scenarios!
Tips for Navigating with Landlord, BrickUnderground
- Best strategy is keeping it polite, trying to go month by month, and leveraging track record.
- Know your rights. While this will vary state-by-state, it’s important to know what a tenant can and can’t do with regard to kicking you out/not renewing your lease.
- Keep it polite. Be transparent about your situation. You want to approach the landlord is a way that they can see where you are coming from.
- Try going month-to-month.
- Leverage your track record. If you have always paid your rent on time, your landlord will be more likely to accept a lower payment.
- Tweak the lease terms. It’s possible you can get some credit or reduction based on amenities being disrupted.
The Ultimate Guide to Remote Work, by Zapier
- Advice for the remote manager
- Care about your team members and show that to your team
- Help team members grow in their careers and learn new skills
- Clearly communicate expectations
- Give regular feedback so people know how they’re doing
- Encourage creative problem-solving
- Set your team up to do the work that matters
- Protect your team’s priorities and work time.
Check out Fundera’s assessment of the best places to go for small business advice.
LAST UPDATED: APRIL 24, 2020
You couldn’t receive federal funding… now what?
We have spent the last month helping small businesses access and understand federal funding options. Whether you received funding or not, now is the time to start planning for the future in a wildly uncertain business environment. We have put together resources and our top advice for small businesses. If you have any further questions or would like specific advice from MBA students, please reach out.
Top 10 Pieces of Advice for Small Businesses
- In the case that you weren’t able to get funding or need more, understand other financing options. Some state governments offer aid packages. FinTechs are offering solutions.
- Have a plan for each scenario. Understand what you can and can’t control in a world of uncertainty.
- Be transparent with all your stakeholders. Your suppliers and employees, especially, will respect your transparency. Transparency will increase their willingness to work together with you.
- “Prioritize connection over selling” - Mark Cuban. Despite the inclination to focus on sales as revenues decrease, instead make sure that you build and maintain the relationships that you already have.
- Negotiate your contracts and debt. Be transparent, be polite, and understand your rights in the matter.
- Manage any necessary layoffs with compassion and decisiveness. Set the right tone, be direct and be human.
- Figure out how your customer needs have changed and adapt. People are building new habits, there’s an opportunity to supply them new services.
- Keep your best employees loyal. People are your most valuable asset.
- Leverage your track-record with landlords to negotiate better terms. Try to go month-by-month instead of annual contracts. Know your rights.
- Clearly communicate expectations for remote work and give frequent feedback.
How Small Businesses Can Survive the Coronavirus Outbreak by Karen Mills.
- In addition to disaster loans, which only apply to businesses in states that have declared emergency status, some state governments are offering aid packages
- Explore private sector programs and fintech solutions. Facebook said it would offer $100 million in grants to small businesses. And fintech companies such as Kabbage and Fundbox, which specialize in loans to small businesses, are also considering ways to support the sector.
- Renegotiate terms of contracts and debt. Owners should ask landlords for more time to pay their rent, for example. They should also ask banks to temporarily defer interest payments on outstanding debt.
- Concerned consumers can buy gift cards from their local businesses.
- Large companies can provide relief simply by paying their bills now. They tend to delay payments to preserve cash. Mills recommends that organizations reject that tactic.
A Way Forward for Small Businesses, by Zoe Cullen, Ed Glaeser, Michael Luca, and Chris Stanton.
- Don’t rush your decisions but do make plans
- What you can (and should) do right now is start making detailed contingency plans. These are overwhelming times, and “save my business” is a daunting task. But “Day 1: Call my landlord, Day 2: Sign up for a loan,” and so on feels more reasonable. Even better is to think through what you will do in 20 days if things look better or worse. Research in social psychology and behavioral economics has documented the ways in which making plans helps people achieve goals. Break your big goal into smaller goals and focus on achieving those.
- Figure out how your customer needs have changed. People are building new habits.
- Do some realistic accounting. Form realistic expectations of your cash flows. Figure out which expenses can be delayed. Stay abreast of other forms of public assistance.
- Keep your best employees loyal. Workers are your most valuable asset. Stay human with people.
How to Manage Coronavirus Layoffs with Compassion, by Rebecca Knight
- When making the decision, first ask “Is downsizing your workforce truly necessary?” As a leader, you need to spark “resourceful, creative thinking about how your organization can save as many jobs as possible.” -Josh Margolis
- Gather information
- If you decide layoffs are necessary, then make sure you are prepared before reaching out to affected employees. They will likely have a lot of questions about timing, severance, and benefits.
- Understand your limitations
- Even if you’ve presided over layoffs in the past, overseeing them in the coronavirus outbreak will be very different: they won’t take place in person. Margolis suggests asking your employee, “Is there a time when I can get 15 minutes of your full attention?”
- Set the right tone
- Your aim is to “treat people with dignity, fairness, and respect”
- Be direct and human
- Your message should be “clear, concise, and unequivocal.” Express gratitude for their hard work and dedication. Then offer a short and simple explanation about the economic conditions that led to the layoff.
- Offer assistance, but don’t overpromise
- Recognize that this person may need time to process the news and may have questions for you later.
- Be transparent
- Hold an “Ask me anything” session so that rumors don’t take over
- Focus on your wellbeing
Advice from Mark Cuban
- Accept the reality and quickly take action. You can’t be paralyzed by anger, anxiety, and fear.
- Transparent communication with everyone and anyone who you owe money too
- Be brutally honest with everyone.
- Prioritize connection over selling. Instead of pushing sales, build the relationships you already have. Check in on your accounts without the expectation of closing deals.
- Become an expert in small-business loans. Don’t expect your bank to hold your hand.
The Matrix for Covid-19, by Sequoia
- Things are changing rapidly, adaptability will determine who survives.
- There are things you can control and things you can’t control (macro factors). Have a plan for all scenarios!
Tips for Navigating with Landlord, BrickUnderground
- Best strategy is keeping it polite, trying to go month by month, and leveraging track record.
- Know your rights. While this will vary state-by-state, it’s important to know what a tenant can and can’t do with regard to kicking you out/not renewing your lease.
- Keep it polite. Be transparent about your situation. You want to approach the landlord is a way that they can see where you are coming from.
- Try going month-to-month.
- Leverage your track record. If you have always paid your rent on time, your landlord will be more likely to accept a lower payment.
- Tweak the lease terms. It’s possible you can get some credit or reduction based on amenities being disrupted.
The Ultimate Guide to Remote Work, by Zapier
- Advice for the remote manager
- Care about your team members and show that to your team
- Help team members grow in their careers and learn new skills
- Clearly communicate expectations
- Give regular feedback so people know how they’re doing
- Encourage creative problem-solving
- Set your team up to do the work that matters
- Protect your team’s priorities and work time.
Check out Fundera’s assessment of the best places to go for small business advice.