Family businesses are the fabric of our economy and, to many, represent the American dream. But the COVID-19 pandemic has left millions of family businesses reeling. Business owners are wondering how to keep their businesses afloat financially and practically. They are looking for ways to stay relevant, keep employees close and maintain relationships with customers, vendors and others who are integral to their business. These are uncertain times. Heidi A. Nadel from Holland & Knight shares five tips for family businesses to create a path forward and provide some certainty for themselves and their employees.
1. Health is Wealth – Keep Yourself and Your Employees Safe and Healthy
We are all making sacrifices to stay home, social distance and change the way we live and work during the pandemic. Businesses are taking huge financial hits to follow stay-at-home orders. It may be tempting to make exceptions or to return to “normal” business. But for family businesses, the risk of even one key employee becoming too sick to participate in the business could be devastating.
2. Protect Yourself and Your Employees
Stay the course. Maintain and follow written policies for remote work, true social distancing for employees that must appear in person, rotating work schedules, separated work spaces, limited or no contact interactions, cleaning and sick leave. If you are unsure of what is and is not allowed for businesses right now, check out Holland & Knight’s state-by-state summary of guidelines, which is updated frequently and includes links to all executive orders, mandates and proclamations.
Reinvent Your Business
Whatever your business is, does, buys or sells, now is the time to innovate and maximise your online presence and offerings. Take the time to update your website and social media presence. Actively engage your employees, customers, vendors and others on social media, email or text. Ask them what they need, and then provide it to them – safely.
This may mean shifting your product line to meet the needs of right now. It may mean offering new services or providing the same services in different ways. Or it may be moving ordering online and working with no-contact delivery services.
Restaurants shifted to take-out and delivery. Gyms shifted to online and on-demand classes. Cosmetic and beverage companies started making hand sanitiser. Your business needs to find its own niche in this new market.
3. Stronger Together – Connect and Collaborate with Your Customers and Community
You are not alone. Your customers, suppliers, vendors, referral sources and others key to your business are also struggling. Reach out to them on a human level to check in, and keep in touch with them. This is not the time for slick sales communications, but it is a chance to find ways to collaborate, build trust and organically develop your brand.
What you do now and how you participate in your community will become part of the identity of your business going forward. People will remember if your business stepped up in this crisis, even in some small way. Consider whether there is something your business can offer to customers or the community that speaks to your values and also helps them in a meaningful way.
4. Get Financial Relief to Stay Afloat
Even if you quickly adapted your business to online or limited-contact operations, you may still need to find financial relief to weather the pandemic. If you are one of the many millions of business owners in the United States who are worried about the future or if you are already struggling financially, there are places to find help.
Negotiate commercial leases. Whether you are the owner or tenant, you can negotiate leases to extend notice periods and terms, space out payments, work out alternative payment arrangements based on future sales or to use the space during the crisis that may generate income to carry both sides forward.
Negotiate with vendors/suppliers. Your business may not need all of the supplies or goods that it usually needs. But remember the people you buy from or who provide services to you are in the same boat as you are, and you will need them again. Work on mutually beneficial agreements with your vendors and suppliers to carry you and them through these difficult times.
Seek credit relief. Ask your credit card company or lender to waive service fees, allow you to spread out payments or other forms of disaster relief. Some credit card companies and banks have announced they are providing help for small businesses. Check with your lenders to find out if they are offering special services or assistance.
Take advantage of federal and state loans and grants for small businesses. At the federal level, the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) offer financial assistance to many small businesses. Read more about the small business loan programs. Although the first rounds of this federal funding were quickly exhausted, speak to your bank about whether you can apply now to be considered for future relief. Local COVID-19 relief for businesses varies across states, cities and counties. Reach out to your local chamber of commerce to learn more about the programs available locally. Holland & Knight’s COVID-19 Response Team is another resource with updated information to help businesses address issues related to COVID-19.
Look for private business grants. It may require some research to find them, but some larger private companies are also creating small business relief funds or offering business grants.
5. Emerge as a Leader
This crisis will be over some day, but the way we do business is likely to be changed forever. Position your business to succeed now and to excel later. As the country re-opens in the coming weeks and months, take what has worked during this time and adapt it. Discard the rest.
Assess your management team and approach. Who stepped up and showed leadership and creative problem-solving in the face of extraordinarily difficult times? Did management effectively interact with employees and other stakeholders? What did not work?
Update your business plan. Did you create a new product, innovate a new way of providing a service or form new business relationships that you can carry forward? Did your business go digital overnight or make big changes that seemed impossible before all this? How can you carry the momentum forward?
Keep your employees engaged and close. Explore all alternatives to job loss and layoffs. Consider whether job share, reduced hours, voluntary leave, state work share programs and other options would help your business stay above water without alienating employees. Check in with your employees. Reassure them. Loyalty and respect are two-way streets. The way you treat your employees during the pandemic will be remembered long after it is over.
Get your governance in order. Review your formal business structure to make sure it is the most advantageous set-up possible. Evaluate or create leadership succession plans, exit strategies for any retiring family members, owner buy-out agreements and contracts with key employees.
Whatever you do, don’t panic. As in any crisis situation, preparation and planning are key to putting your family business in the best position to survive the pandemic. If you do the work now, with a little help and a little luck, your business will come out on the other side of this stronger and more resilient.
This article first appeared by Heidi A. Nadel on the Holland & Knight Shareholder Rights Blog and has been republished with their permission. Find out more here