Small Businesses Prepare for a Second Lockdown

What Small Businesses Can Do to Prepare for a Second Lockdown

Small businesses were crippled when the first lockdown occurred last spring, and many have not recovered.

Sadly, it’s time for those same small businesses to prepare for a second lockdown.

According to a November CNBC report, “America’s coronavirus crisis continues to worsen. The U.S. seven-day average of daily new Covid infections surpassed 150,000 for the first time on Monday […] As cases and hospitalizations climb, more mayors and governors are tightening restrictions on businesses and residents in an effort to slow the spread.”

Moreover, Joe Biden has suggested he will follow the advice of scientists on whether the country should prepare for a second lockdown. CNBC reports, “Dr. Michael Osterholm, a coronavirus advisor to President-elect Joe Biden, said a nationwide lockdown would help bring the virus under control in the U.S.”

Therefore, as much as we would like to believe it won’t happen, there is a real possibility that small businesses will be forced to close their doors to the public once again.

A second lockdown could prove catastrophic if small businesses are not prepared.

The Yelp Local Economic Impact Report for September 2020 found, “As of August 31, 163,735 total U.S. businesses on Yelp have closed since the beginning of the pandemic (observed as March 1) […] In the wake of COVID-19 cases increasing and local restrictions continuing to change in many states we’re seeing both permanent and temporary closures rise across the nation, with 60% of those closed businesses not reopening (97,966 permanently closed).”

If your small business is one that has survived the first lockdown, you have already proven you’re resilient.

The good news is we can take what we learned from the first shutdown to prepare for a second lockdown.

For example, the U.S. Chamber of Commerce Small Business Coronavirus Impact Poll found that while “65% of businesses are concerned about having to close their business, or stay closed, if there is a second wave of COVID-19 […] the majority of small businesses report actively preparing for resurgence of coronavirus.”

The key to surviving this go-round is to actively prepare. Don’t let it surprise you –  anticipate it is coming.

Review the following list of ways small businesses can prepare for a second lockdown and start making changes ahead of time.

Review Cash Flow 

Review Cash Flow 

Start by reviewing your cash flow. 

Take a careful look at how much money is coming in and how much money is going out.

Then, make cuts as needed. 

Business.com reports, “Many small businesses found they only had enough cash on hand to float two weeks of expenses during the first company shutdown.

In hindsight, we know the shutdown lasted much longer than two weeks, which resulted in major cash flow issues for small businesses.

Consider every cost. For example, if you are spending money to produce a product that is not bringing in money during the pandemic, it’s time to cut these costs.

Identify your most profitable products and services and eliminate the products and services with a lower profit margin.  

Tighten Your Budget

Tighten Your Budget

Similarly, small business owners must tighten their budgets. 

Scrutinize every cost and see where you can save money. 

Have a clear idea of how much money you need to cover expenses.

Get creative. For instance, consider changing your hours and only staying open during the busiest times of day if it helps you save on your utility bills and operations costs.

See if you can renegotiate contracts.

Look for lower-cost suppliers.

Stock only essentials.

Trim the fat.

[Related Read: 8 Steps to Quickly Build Emergency Savings]

Update Your Pandemic Plan or Put One in Place

Pandemic Plan

Before a second lockdown happens, update your pandemic plan or put one in place.

Small businesses should have a contingency plan for covering expenses and protecting employees if the doors are closed again due to the pandemic.

A small business pandemic plan should detail clear policies for how they plan to handle the situation, including everything from contingencies to their commitments to their employees.

Your pandemic plan should cover the following:

  • A communication plan
  • A budget
  • The level of care you the business will provide employees
  • Workplace continuity (such as remote work options)
  • Address possible supply and demand shortages and business continuity issues
  • Workplace safety

The Center for Disease Control and Prevention (CDC) has created a helpful webpage, Prepare your Small Business and Employees for the Effects of COVID-19, to guide you through creating a pandemic plan. 

[Related Read: How to Personally Prepare for a Second Lockdown]

Get Creative

Get Creative

If your small business survived the first lockdown, you likely got creative. 

Innovation is what saved many small businesses. Check out these statistics from SHRM.

  • 43% of small businesses have started rethinking the way they do business since the coronavirus pandemic began.
  • 32% have found a new way of delivering existing services.
  • 22% have asked employees to learn new skills to support changes in the business.

Don’t stop now. Continue to embrace creative ways to sell your products and services to customers even during a shutdown.

While it may not business as usual, you can find unique ways to make a profit.

Restaurants switched to offering takeout and delivery services.

Brick and mortar stores offered curbside pickup.

Bookstores turned to internet sales.

Gym classes went virtual.

Event planners wowed people stuck at home with concerts that were live streamed.

Take the creativity you used in the spring to the next level as you prepare for a second shutdown.

Make Sure Your IT Infrastructure is Solid 

IT Infrastructure

The internet is key to surviving as a small business during a lockdown.

Therefore, it is critical to make sure your IT infrastructure is solid now before you are told to close up shop. 

Harvard Business School reports, “The coronavirus pandemic forced many analog companies to embrace digital technology, such as contactless payment tools and online booking software.”

Take advantage of technology that is designed to help small businesses survive during a lockdown, such as Square and Shopify.

“Square is best known for its credit card reader that plugs into mobile phones, but it now offers tools for website-building and invoicing. When the pandemic started, the company added new options to its software such as curbside pickup and contactless delivery.”

Another technology tool small businesses used during the first shutdown was Shopify. 

Shopify offers pre-built websites where small businesses can sell their products. The Washington Post reports, “It had a 53 percent increase in people creating new online stores in April compared to March.”

Get Supplies Before They Run Out

virtual office supplies

Since you know it is coming, go ahead and get your virtual office set up.

Make sure you have everything you need to work virtually, such as a router with faster internet, a scanner, and wireless headphones. 

Not only do you want to make sure you have the essentials to make remote work possible, but you also need to get them because they will sell out. 

During the spring, there was a run on home office supplies.

First Coast News reports, “COVID-19 is causing another shortage — home office supplies and furniture. In fact, the company Profitero reports the word ‘desk’ was the second-most searched item on Amazon during July and August behind ‘face masks.’”

Additionally, it is still difficult to find dual packs of ink cartridges since the printing industry supply and demand chain was crippled by the virus. 

According to the World Economic Forum, “COVID-19 and related responses are delivering an extraordinary shock both on supply and demand sides to the global economy – by shuttering production and cutting consumption.”

If a part of the manufacturing of a product takes place in another country that is already in a second lockdown (such as printer ink), it means we will experience supply and demand issues in America as factories close and travel is restricted.

[Related Read: Get More Done: How to Set Up an Efficient Home Office]

Communicate with Customers 

Communicate with Customers

Prepare for a second lockdown with a plan for communicating with customers. 

Use the power of the internet (such as social media and email) to continue updating customers when your doors are closed. 

For instance, Harvard Business School found small businesses are finding social media and email a better means for communicating with customers and clients more than their websites. 

Small businesses rely on their customer’s business. Keep them informed about your plans and what changes are taking place. 

Provide clear expectations, such as informing customers if there are supply and demand issues or shipping delays. 

Ultimately, even if your small business does not have to close its doors for an extended period, it is wise to prepare for a second lockdown. 

You never know when a disaster will occur and having a plan in place will help you overcome unforeseen challenges.


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