COVID-19: Small businesses need to prepare, not panic
It’s been a rough start to the year for small business. It’s tough enough making a business work in good times, but when you’re getting hit by repeated uncontrollable external forces, things can start feeling pretty grim. First came the rail blockades, affecting one in four businesses, with an average cost of $ 60,000 for those hit hardest. While a resolution seems to be coming to that crisis, the light at the end of that tunnel is the rapidly approaching train of COVID-19.
Clearly, there’s a tremendous amount of uncertainty for everybody with the World Health Organization just having declared a pandemic. However, for those who run smaller businesses, this outbreak poses many additional issues. Owners of small firms are usually too busy running their day- to- day operations to fully prepare for the hit, and they have fewer buffers than larger businesses to weather any kind of longterm disruption. Already, many small businesses are starting to feel the direct effects of the outbreak on supply chains, customer traffic, international pricing and investments.
The global trade impact of the epidemic resulted in export losses of $ 50 billion in February and most forecasts show we should brace for worse the longer it lasts. On the ground, this hits hardest at the local level. One CFIB member told me that their supply of speciality garments from China is reduced to a trickle and they will run out of stock soon. The retail and hospitality sector is already suffering significant declines as people are staying away from restaurants and malls.
The next shoe to drop for small business owners is the impact on employees. And staffing is already a significant challenge.
CFIB is receiving many calls from employers concerned about occupational health and safety issues related to COVID- 19. These issues need careful management, so we are providing assistance to our members and recommending that all small business owners begin preparation now. While these external forces are beyond the reach of any individual, there are things you can control and measures you can take to lead your business through the crisis.
❚ ❚ Communicate clearly and effectively with your employees. Your staff will be exposed to conflicting information and may be anxious or confused. Make sure to communicate any new policies quickly and in a balanced fashion. One simple step is to provide an information hub where employees can find all the information they need.
❚ ❚ Make sure travel policies are clear, and employees know what authorizations are needed and when the policy will be reviewed. This is a good time for businesses to consider which functions can be done remotely, including from an employee’s home. It is often in moments like these that business owners rethink processes, finding creative ideas that improve the business long after a crisis is over.
❚ ❚ Tell sick employees to stay home. Businesses that do not offer paid sick leave may wish to make an exception in this case.
❚ ❚ Check your insurance policies. Re- read key business contracts to understand cancellation clauses. Interruptions from COVID-19 may allow suppliers to cancel contracts without penalties. Your business interruption insurance may also not apply.
These are a few measures small business owners can implement. However, we are also asking the federal and provincial governments to step up and do what they can to relieve the burden being shouldered by the private sector.
CFIB was pleased by the federal announcement that employees who must stay home can now access Employment Insurance without a one- week waiting period. Expanding the work- share program is a very good idea to help businesses experiencing a drop in demand for their products and services. Many businesses in tourism or those serving the Asian- Canadian community have seen a dramatic drop in sales. Allowing business owners to reduce hours will help them protect jobs.
To further help businesses weather the storm, governments should consider a number of actions: providing relief from penalties and interest for late remittances of sales tax and Workers’ Compensation for businesses in distress; pressing pause on routine audits; and putting planned increases in CPP/QPP premiums on hold.
As uncertainty can be the worst enemy of the economy, governments have a responsibility to provide reassurance that they will respond to the needs of small business in light of an economic downturn caused by the arrival of COVID-19.
While it is important for businesses to do proper contingency planning, it is even more important that all of us keep our heads and avoid pressing the panic button. With some luck and careful planning, let’s hope that by later this year COVID-19 is simply a bad memory. But the creativity and lessons learned along the way may be of great business value for the long term.
Tell sick employees to stay home.