Small Business Owners: What to Do During a Temporary Closure

Millions of businesses across the nation were forced to close their doors during the stay at home orders with the COVID-19 pandemic. Was your company one of the many that had to implement a temporary closure? At this point, restrictions are being lifted which means that you might be open again. But some industries are still affected and haven’t been able to open for business yet.

Temporary Closure or Permanent Business Loss?

The problem with a temporary closure is that some businesses can’t carry the overhead costs without money coming from customers. In some cases, these temporary closures could result in permanent closure for companies that were already financially unstable before the pandemic occurred. The closures were the “tipping point” that put businesses over the edge.

Another factor that could affect the long-term sustainability of your company is how much business picks up when you reopen. For example, some companies have opened back up again, but the customers aren’t shopping like they did before. Consumers are being careful with their spending, and many people are choosing to avoid public spaces because they are worried since the virus is still spreading.

At the same time, certain industries are still affected. For example, entertainment venues such as theme parks and movie theaters are still closed in certain parts of the country. In areas where these businesses are allowed to re-open, the businesses are running with a much smaller group of customers each day. Social distancing needs to be maintained at all times, which means that some companies are only running at a 15% capacity. A little money is better than nothing, but when these slow months are on the tail of a few months of temporary closures, it can be hard to sustain the overhead costs that need to be covered.

Your unique business decisions could be the factors that determine whether your business can keep going as the pandemic dies down. With a few specific strategies, you can keep your company strong and weather the storm.

Your Responsibilities During a Temporary Closure

The COVID-19 pandemic resulted in an unexpected temporary closure for millions of businesses. But it’s not the first time when companies have needed to close their doors due to unforeseen circumstances. Even when this pandemic is over, you need to have an emergency plan in place so that you can recover after other situations that might result in temporary closure. Common examples are slow seasons, natural disasters, or national emergencies.

During this temporary closure and any other closures that might happen in the future, here are a few responsibilities that you need to maintain as a business owner:

  • Employee Notifications and Communication: Updating your employees is key during a time of closure. You need to keep your staff in the loop and let them know what is going on in the business. If you are closing the doors temporarily, you might still have the option to offer work-from-home opportunities, depending on your industry. Share the options with employees who could potentially continue working. Otherwise, do your best to give as much notice as possible to employees so that they can look into COBRA benefits and unemployment as needed. Even though it is hard to have these conversations, it is important that you take care of your staff by sharing details about the situation. Remember that your response to the temporary closure could influence their decision regarding whether or not they decide to come back to the company again when you reopen in the future. You can schedule virtual meetings, hold phone calls, send text messages, or keep employees updated through email communication.
  • Customer Notices: At the same time, your customers need to know whether your company is open for business. If you need to shut down temporarily, then you might send a newsletter notification regarding your current circumstances and potential plans for the future. Post notifications on the storefront, website, and social media profiles. At the same time, it is just as important to share details about when your business is open again. Or, if your company falls into the “essential” category during this pandemic, then it is smart to let customers know that you are still open. Many businesses have adjusted daily hours, which is another important detail to share with your customers.
  • Talk to Vendors: Do you have suppliers or vendors that regularly offer products or services to keep your company running? If you need to temporarily stop the replenishing of inventory, then it is essential to contact your vendors as soon as possible. Ideally, you can use what is left of your inventory without the need to restock the shelves during a temporary closure.
  • Coordinate with Banks and Lenders: How will your cash flow affect your ability to keep up with bills and loan payments? It’s likely that a temporary closure will result in low cash flow, which means that you might need to explore your options for financing. During the COVID-19 pandemic, many options have been offered for small businesses, such as the Paycheck Protection Program. Talk to your bank to explore the best possibilities for your business needs during this time.
  • Maintaining Accounting Records: Just because your business is closed, doesn’t mean that you don’t have to worry about keeping up with bookkeeping and accounting. It’s important that you continue tracking transactions as they come through, especially if the funding is related to the Paycheck Protection Plan. Loans through PPP could potentially be forgiven, but you must have detailed documentation to show that the money was used according to the restrictions of the loan terms. Additionally, maintain records about other information related to the temporary closure, such as when the business closed, which employees were furloughed, which employees were paid while the business was closed, and strategies used when the doors opened again.

How to Bring Your Business Back After a Temporary Closure

Opening back up isn’t as simple as unlocking the doors and resuming regular business practices. Your company needs to determine what the “new normal” looks like to ensure the safety of customers and employees. It’s likely that you will need to implement strict cleaning and health policies to avoid the risk of having COVID-19 spread in your business place. One positive COVID-19 test among employees or customers in the business space could result in another closure – and thousands or tens of thousands of dollars in professional sanitation services.

Consider how your employees interact with customers. Also, look at the ways your staff interacts with each other. What are systems that can be implemented to maintain social distancing and limit contact between people? Some businesses are restructuring the layout of the store or business space to make it easy to keep distance between people. Others are limiting the number of people in the office.

You might also consider implementing a quick health check for employees and customers. For example, some businesses are choosing to do a temperature check at the beginning of every shift, as well as a symptoms questionnaire to identify potential risk.

Also, look at the ways your policies are influencing employees in coming to work. The best practice right now is to encourage people to stay home if they have any symptoms, or if they have been exposed to someone else with COVID-19. Employees might be tempted to come to work if they are worried about losing their paychecks and/or jobs. Have a good policy in place that makes it safe (and encouraged) to stay home when there is a possibility of infection.

The overall goal of these tips is to minimize the likelihood that you will have COVID-19 spreading through your workplace. If you are proactive, there is a way to find the balance in keeping the business running while also managing risk at the same time.

It’s a Great Time for Innovation

The businesses that are thriving through the pandemic are those who are looking at possibilities to innovate. More than ever, it is important to anticipate the needs of your customers and find ways that you can provide the products and services that they desire. Customers still have money to spend – you just need to find solutions to close the gap and maintain a safe environment where people can access the things that are needed.

Depending on your industry, there might be ways that you can adjust business practices to optimize your systems after a temporary closure. For example, restaurants and retail providers are offering curbside pickup options if customers aren’t coming into the stores. Other examples are limits on the number of people allowed in the stores, switching to online ordering solutions, or even providing teleconsultations for services that can be done over the phone or through video conferencing.

Having the right support team can also help you get through a temporary closure. If you need accounting or bookkeeping support, then our experienced staff is here to offer services for your business. Even before the COVID-19 pandemic, we’ve provided outsourced accounting solutions that can be completed without face-to-face interactions. For more information about these services for your business, call Easier Accounting at (888) 620-0770.

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