Each small business in Jamaica is unique. There are car marts, cook shops, restaurants, boutique hotels, clothing stores, street side vendors and the list goes on. Each small business in Jamaica plays a critical role in fueling the country’s micro-economic framework.
The coronavirus came in like a flood, washing away a lot of what these small businesses have been trying to create. Jamaica isn’t alone. Small businesses globally have started to feel the economic pinch of the coronavirus.
No one expected it. That doesn’t change the fact that it’s here. How are we going to lessen the negative economic impact and emerge stronger?
That’s the question some of the small business owners previously featured in this digital magazine have asked. I spoke with one of these entrepreneurs last week who, with a concerned look on her face, expressed that sales had declined and she wasn’t sure what she would do if they slid even further. Her staff depends on her. Furthermore, this business is her livelihood. She, therefore, has no choice but to make things work.
Can you relate?
There is no clear answer to the growing economic strain of coronavirus quarantines. However, I’ve compiled a list of five possible solutions I hope you’ll find useful. I hope these solutions empower you even more to make things work.
1. Tap Into the Government’s $25 Billion Stimulus Package
A little more than a week has passed since Dr. Nigel Clarke presented the 2020-2021 budget. I discussed in this article strategies that you can use to leverage one of the key economic incentives he presented. Hopefully, this sweet deal for small businesses in Jamaica will remain after the coronavirus crisis passes.
The focus now is on reviving the economy. Therefore, the government has implemented a $25 billion stimulus package. Some elements of this package specifically target small business owners in Jamaica:
- Discussions are being held with commercial banks to provide business in affected sectors with temporary cashflow support through the deferral of principal payments, new lines of credit and other measures. We are in discussions with commercial
- A soft loan fund to assist highly affected businesses.
- A Covid Allocation of Resources for Employees (CARE) programme specifically designed to help small businesses in the worst affected sectors to keep paying workers
Details about small business owners in Jamaica can access this crucial stimulus package have not yet been provided. Keep listening to the news for updates.
2. Create a Financial Disaster Preparedness Plan
Experience is often the best teacher. The corona virus has taught us an important lesson – always have a financial risk management strategy for your business. We tend to focus on financial risk for investments, but how are you preparing your business for unexpected crises?
Sure, no one anticipated COVID-19 and the impact it would have on the world. Nevertheless, a business should always have a financial plan that it can deploy during times of crisis. Here are some tips that you can use to create such a plan for your small business:
Always have cash reserves
We are often told not to leave money sitting in a bank when it could be used for investments that can generate more cash. However, this doesn’t mean that you should leave barely any cash in your business account. Cash is your most liquid asset; leave enough in the bank to cover your business’ expenses for at least three months.
Understand the risks unique to your business
Business risk becomes more complex as the business grows. Work with your team to identify the risks your business would be exposed you in different types of crises. There are a lot of questions that you should ask. Remember though that these questions should be adjust to suit the unique nature of your business.
- What investments should your business make to provide a protective cushion from those risks?
- What business processes need to be implemented to handle each crisis?
- How can the business still function if normal operations are thwarted?
- How much inventory should you always keep in stock?
One of the strategies I’ve noticed restaurants implementing during this coronavirus pandemic is free food delivery. Many of these restaurants were not previously offering this service. However, they adjusted to meet the new needs of their clients. Their ability to quickly shift to this new paradigm would have required some forethought and strategic financial prepartion before the coronavirus even became a thing.
Therefore, the key is understanding the risks unique to your business and preparing as best as possible for them. This is probably the most important element of your financial disaster preparedness plan.
Identify Other Potential Funding Sources
Your financial preparedness plan should clearly indicate potential backup sources of funds if your business is in dire need. No this funding source isn’t the government. It isn’t the government’s responsibility to provide a significant bailout each time disaster strikes. Our political leaders try their best to provide as much support as possible but the dollar can only stretch so far and no further.
3. Embrace New Sales Channels
Sales have dropped because small business owners in Jamaica depend heavily on foot traffic. We live in a digital world. Jamaica needs to become more open to ecommerce from both the perspective of the consumer and the business. Invest in eCommerce.
Of course, setting up an eCommerce website comes with its own set of challenges. Nevertheless, embracing the digital world is what will help more Jamaican businesses get ahead on the long term. Here are five quick steps for creating a successful eCommerce website.
4. Remember That Your Customers Are Struggling Too
Job cuts have almost become a natural part of this coronavirus cycle. The travel industry has been the hardest hit. With no source of income, people are worrying less about when they’ll be able to buy the nice things you sell and more about how they’re going to make their rent and car payments.
How can your business help customers through these difficult times? Your customers are more likely to remain loyal to you if you can show how you can add value to them even during times of crisis.
5. Prepare for a Surge in Demand
The coronavirus saga won’t last forever. It’s possible that things will normalize and start improving by either the third or fourth quarter of this year. Plan ahead for better times. Be prepared for post-crisis recovery.
The coronavirus came unexpectedly. That doesn’t mean that your business should fall apart and fail. These five tips can help your small business in Jamaica continue to do well during and after the coronavirus saga ends.