As a business owner, confronting a situation as unique as COVID-19 is a challenge, to say the least. It’s important to stay up to date with the latest information from reliable news sources such as the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) so you can make informed decisions for your company.
As we navigate through this time of uncertainty, making a plan for what will come next is vital to the well-being of your employees, the longevity of your business and how your community (and potential customers) perceive your company. There are three important levels of how communities are responding to COVID-19 and our suggestions on how to weather the storm.
Level 1 – Fewer Service Calls and Cancelled Appointments
The first level to be prepared for is an initial drop off in the number of calls that your company is getting. In this first few weeks as local governments initiate shelter-in-place orders and people traverse potentially unstable financial situations, you will probably see a reduced number of calls as well as canceled appointments. This means your cash flow will more than likely be affected. This may be a time to consider introducing reduced working hours or temporary or mandatory layoffs for your employees.
Alternating or Reduced Hours
Alternating the days or hours your employee’s work is an effective way to reduce the amount of hours employees are working while still offering your full scope of services. Some companies have reduced their employee’s working hours to 20-30 hours per week to adjust for the decline in work and revenue.
Elective Layoffs and Mandatory Terminations
Whether you have an employee that lives with someone that is in the high-risk category or they themselves have a compromised immune system, you may have employees request an elective layoff so they can stay home for the safety of themselves or their loved ones. Some states are now allowing people affected by COVID-19 to receive immediate unemployment benefits. It may be financially beneficial or medically necessary for them to be temporarily laid off and receive state-funded unemployment for the time being. As a business owner, you can care for your employees by checking if your local state government will allow you to apply for unemployment benefits on behalf of your employees.
Now may also be a strategic time to consider laying off employees with poor performance or negative attitudes. This will give them the opportunity to look for a job that brings them joy while having immediate access to government assistance during their search for something new.
Level 2 – Elective Services Reduced and Schools Closed
You can gauge if your community has entered Level 2 if elective services like bars, movie theaters or other similar businesses have closed or public grade schools have announced they will not be returning for the remainder of the school year. If you haven’t already done so, mandatory layoffs may be critical now, depending on how your business is doing. If you have healthy employees that took voluntary layoffs and are receiving unemployment benefits, you can allow them to volunteer to run service calls for you. In the case of service technicians or sales representatives, you should bank their commission for any sales they make and pay them when they return to work. They can not be paid while they are receiving unemployment benefits.
If you have employees that are sick and have used up all their Paid Time Off, we recommend that you lay them off temporarily and assist them in applying for unemployment if your local state government allows.
Level 3 – Shelter-In-Place
If your municipality has instated a shelter-in-place notice, offer your employees temporary layoffs. These layoffs can have a set timeline, such as 2, 4 or 6 weeks to give your staff confidence and predictability of when they’ll be able to return to work. You should check with your local state government to see if immediate unemployment benefits are available to your employees. If you have managers working from home, ask them to help you manage the labor hours being worked so that you’re only paying for the labor that you need.
Small Business SBA Loans
The federal government is working to reach a financial solution for small businesses during this unpredictable time. It may be strategic to apply for an SBA loan to protect your companies cash flow while weathering the storm. If you don’t use it, you can return it to the government but, if you need it, it’ll be there. We recommend that you calculate your operating expenses, not including the cost of goods, for three to six months and apply for that amount. Governers are deciding which counties will qualify for these loans so if your county isn’t listed on your local government website, contact your governer’s office to let them know how your business is being affected by COVID-19.
For more information about SBA loans during the COVID-19 pandemic, visit the federal government website here and for other COVID-19 Tips, visit our blogs Marketing and Advertising Advice During COVID-19 and How To Protect The Health Of Your Employees From COVID-19.
