April 01, 2020
Written by: Atul Oka, Senior Director of Strategy and Business Development, DUKE Heights BIA
The survival of any business in the current environment relies on its ability to adapt and ride out this period of low economic activity. In order to do this, businesses will first need to evaluate the impact of social distancing and supply chain disruptions to their ability to drive sales and generate income.
If your business is deemed to be non-essential, has a physical presence and supplies product or services to your clients over the counter, or face to face, you will have seen a significant drop to your sales over the last few weeks. You are unsure what the future holds, and how you go about planning for something that seems vague and does not have an analogue in our generation, which can be used to help plan our response. There is information overload, reduced income, forced closures, kids at home, employees to pay, rental overheads, and a skyrocketing infection rate. All of which add to the uncertainty facing you and many of your neighbours.
The best way to deal with all of this and find a path forward, is to look at each aspect one at a time and try to find solutions or mitigation strategies for each, which when combined gives us direction.
At the moment, the main issue facing businesses is the drop in income while carrying the same level of expenses, so let’s first focus on these.
If you have employees, you may be grappling with what to do. Refer to our other piece also in this newsletter titled “Employers and Layoff during COVID-19 Crisis”. This may provide you with some clarity and ideas. Pay special attention to the 75% small business wage subsidy announced recently by the federal government.
If you are a property owner, and have a mortgage, you will be able to take advantage of the six-month mortgage deferral program currently offered at 6 major banks. Speak to your bank representative first, to see how this will impact your loan, the accumulated interest, and your credit rating so you can make an educated decision. If you however rent your premises, you should have an open discussion with your landlord to see if there is a compromise that can be reached. There are many business groups and associations currently highlighting this challenge to various levels of government, with the hope of additional support however it may be prudent to be proactive and start discussion with your landlord so you both may be able to plan.
A range of recently announced economic relief programs including the Business Credit Availability Program (BCAP), interest free loans, loan guarantees, tax and utility deferrals, and reduced electricity rates, when taken together should provide some additional breathing room for businesses.
The drop in economic activity now becomes the most pressing concern. Businesses are taking a variety of different approaches which you may find useful for your business.
Many businesses banded together to start offering delivery services. Speak to your neighbours and see if you are able to jointly initiate a delivery service of your own. Many food delivery companies such as Uber eats have also started offering free delivery to support the food and restaurant business sector. It may worthwhile investigating leveraging existing or creating your own delivery service.
Another way to improve sales is to take your business online. Many services such as law, and accounting can be done remotely with the aid of a few online tools. Physical products can be sold through channels such as Amazon, ebay, Kijiji, and perhaps your own e-commerce site. The BIA is working with a few partners to help businesses who do not have an online presence create a website and assist in transitioning to e-commerce. Please keep an eye on our website www.dukeheights.ca and look out for more communication from us in this regard.
If you have any ideas that can help other businesses or how the BIA can assist, please contact us at firstname.lastname@example.org.